FII inflow continues, Sensex ends above 44,000
Bombay Stock Exchange

FII inflow continues, Sensex ends above 44,000

Mumbai, November 23, 2020

The Indian stock market continued its record run on Monday amid volatility, as the BSE Sensex ended above the 44,000 mark after touching a fresh intra-day high earlier during the day.

Minutes into the trade on Monday, the Sensex hit an all-time high of 44,271.15 points.

The surge in the domestic stock market was led by healthy buying in IT, oil and gas and metal stocks, while banking and finance stocks fell.

Continued inflow of foreign institutional investments (FII) also supported the indices. Net FII inflow during the day stood at Rs 4,738.44 crore. However, DIIs continued to pull out from equities with net outflow of Rs 2,944.05 crore on Monday.

Binod Kumar Modi, Head - Strategy with Reliance Securities said a robust Q2 earnings and improved prospects of strong earnings momentum in subsequent quarters along with continued reforms undertaken by the government to stimulate economic activities attracted foreign funds.

"In our view, domestic equities continued to offer better risk reward propositions to FPIs in the backdrop of corporate earnings recovery, stable government and a number of measures taken by government to revive investment activities in the country. Additionally, weaker dollar index and absence of quality value play at reasonable valuations at their respective markets made FPIs to move emerging markets like India," he said.

The BSE Sensex closed at 44,077.15, higher by 194.90 points or 0.44 per cent from the previous close of 43,882.25.

It had opened at 44,164.17 and touched an intra-day low of 43,747.22 points.

The Nifty50 on the National Stock Exchange closed at 12,926.45, higher by 67.40 points or 0.52 per cent from its previous close.

Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd said that global cues were positive post the news that AstraZeneca's COVID-19 vaccine could be highly effective without any serious side effects, which follows a string of encouraging vaccine results in recent weeks.

"Investors pinned hopes for economic revival on coronavirus vaccines, despite surging cases globally and delays to fresh US stimulus. On the domestic side, markets gained as AstraZeneca vaccine can be stored and transported in the fridge and does not require freezers, like other vaccines, making it an easier option for developing nations including India," he said.

Khemka further said noted that Reliance Industries rallied around three per cent after the Competition Commission of India (CCI) cleared the proposal to buy Future Group's retail assets.

Banks, NBFCs and MFIs gained after an RBI committee recommended wide-ranging changes to India's banking industry, including setting a higher cap for the size of promoters' stakes. However, Nifty Bank and Nifty Financial Sector indices pared gains later.

He said that going ahead, the market is likely to be volatile as sentiments oscillate between fear of rising covid cases globally and optimism over vaccine progress. Investors would also closely watch out the development over the US stimulus talks where the hopes are fading.

"However the overall structure of the market remains positive, as the economic activity continues to improve and covid cases continue to decline domestically, except for few regions," he added.


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