Indian stock indices kicked off the Monday session on a positive note following a shortened trading week. The benchmark Sensex and Nifty showed gains of 0.6 percent each, reaching 71,107.46 (up 407 points) and 21,475.90 (up 123 points) at the opening bell.
Investors in the domestic market are anticipating a dynamic week with a focus on Finance Minister Nirmala Sitharaman’s budget proposals and other macro-economic guidance, scheduled to be unveiled on Thursday. Additionally, the outcome of the US Federal Reserve’s inaugural policy meeting for 2024, set for Wednesday, is poised to capture the attention of investors.
Chief Investment Strategist at Geojit Financial Services, VK Vijayakumar, expressed, “Two important events are due this week: the interim Budget and the Fed meeting on rate decision. But these events are unlikely to impact the market in a big way. The Budget will be a vote on account without major announcements capable of impacting the market. Regarding the Fed decision, no rate cut is expected, but the commentary will be keenly watched.”
The stock markets faced a significant downturn on Tuesday, witnessing a drop of over 1,000 points in the Sensex. Factors contributing to this decline included high valuations, foreign portfolio investors withdrawing funds from India, and moderate profit booking.
Foreign portfolio investors (FPIs) turned net sellers in the Indian equity market in January 2024, selling stocks worth Rs 24,734 crore. Contrastingly, in the previous two months, November and December, FPIs were actively accumulating Indian stocks, amassing a total of Rs 66,135 crore.
Vijayakumar provided insights into FPI behavior, stating, “FPIs were sellers in autos and auto ancillary, media and entertainment, and marginally in IT. They bought in oil and gas, power, and selectively in financial services. The rising bond yields in the US are a matter of concern and have triggered the recent bout of selling in the cash market.”