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Hopes of higher fund inflows, healthy Q2 results lift markets
Mumbai, October 27, 2020
Higher foreign fund inflows, along with healthy quarterly results, buoyed the Indian equity indices on Tuesday.
According to analysts, possible fund inflows due to the MSCI rejig kept the sentiments buoyant in India.
The FII, and FPI inflows on the BSE, the NSE and the MSEI in capital market segment stood at Rs 3,514.89 crore.
Globally, shares slipped in Asia due to surging coronavirus cases and waning hopes for US economic stimulus.
Back home, volumes on the NSE were higher than recent averages.
Among sectors, banks, pharma and FMCG gained the most whereas IT and PSU bank indices lost the most.
The Nifty50 on the National Stock Exchange closed at 11,889.40, higher by 121.65 points, or 1.03 per cent, from its previous close.
The Sensex closed at 40,522.10, higher by 376.60 points, or 0.94 per cent, from its previous close of 40,145.50.
"The next band of resistance for the Nifty is 11,942-11,975. Negative advance decline ratio suggests caution in the broader market and possibility that the positive sentiments arising out of MSCI rejig may not last long," said Deepak Jasani, Head of Retail Research at HDFC Securities.
Vinod Nair, Head of Research at Geojit Financial Services, said: "Forecast of higher FII inflows to India, based on MSCI report, by raising investment limits helped the market to strongly outperform despite a weak global market. The sustenance of such a trend is low given increasing concerns over worsening spread of virus in western world which has weakened their markets for further correction."
"Indian market is expected to follow with an increase in volatility in the coming days as we are heading closer to the US election and more economic restrictions due to the devastating rise of Covid cases."
Motilal Oswal Financial Services' Head - Retail Research Siddhartha Khemka said: "On the domestic side, hopes of higher inflows after MSCI said it will implement the new regime on foreign ownership limits in the MSCI Global Indexes containing Indian securities in the November 2020 Semi Annual Index Review, boosted investor sentiment."
"Sharp gains in Kotak Mahindra Bank boosted private banks, after the bank beat earnings estimates and given its high chances of potential inclusion to the MSCI index. Ipca Labs also surged 13 per cent on potential MSCI Index inclusion."