The lack of new bets at higher levels was a major factor in the Indian stock indices remaining largely stable for the second straight day. Some investors may be taking profits now if they have recently accumulated gains.
Benchmark Sensex and Nifty were 10 points higher each this morning. Among the Nifty 50 companies, 30 were in the green and the rest in the red. Hindalco, Ultratech Cements, JSW Steel, Tata Motors, and NTPC were the top gainers among the Nifty 50 companies, whereas ITC, SBI Life, Asian Paints, Axis Bank, and Larsen and Toubro (L&T) were the top losers.
Several analysts have been pointing out that any further rally from the current peak seems unlikely as valuations were higher, and that is what seems to have been happening in the past two-odd sessions. The indices had touched all-time highs early last week.
In the past month, the indices — Sensex and Nifty — have cumulatively gained about 6 percentage points.
“FPI (foreign portfolio investors) flows have slowed down. In the last two days, FPIs have sold stocks worth Rs 2081 crores indicating buying exhaustion. This is a normal response to the rising dollar index which has moved up to 101.4 from the recent low of 99. Even though Nifty is showing signs of resilience, it is unlikely to race to the 20,000 level in the next few days, given the rising dollar and declining FPI inflows,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Overall, foreign portfolio investors (FPIs) have remained net buyers in Indian stock markets for the fifth straight month in July, according to data from the National Securities Depository (NSDL).