Sensex, Nifty today: Why stock market jumped despite FPI outflow concerns

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Benchmark indices Sensex and Nifty resumed the recent upward journey after the F&O expiry-induced selloff in the previous session. The gains were led by Reliance Industries Ltd (RIL), Bharti Airtel Ltd, Larsen & Toubro Ltd (L&T) and ICICI Bank Ltd. Stocks gained as investors judged the recent fall as unwarranted.

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While most Asian markets fell today, Chinese stocks rose on hopes the US was considering less strict export restrictions on Beijing than feared earlier. Domestic stocks also gained, with the BSE Sensex rising 712.17 points, or 0.90 per cent, to 79,755.91. Nifty stood at 24,132, up 217.85 points or 0.91 per cent. India VIX eased 1.62 per cent to 14.96. This is a day after FPIs sold a whopping Rs 11,756.25 crore worth domestic equities in the previous session.

“The markets find themselves at a tricky crossroads, and the current data doesn’t inspire an overly strong directional view. Expect Nifty to oscillate within a broad range of 23,450 to 25,000—a widespread that reflects the heightened volatility in play,” said Nuvama Institutional Equities.

If Nifty fails to regain upward momentum, it may confirm a lower-top formation, signaling a potential resumption of the downtrend, Sameet Chavan of Angel One had warned earlier today.

“On the upside, resistance is seen near the 20-DEMA in the 24,050–24,150 zone, while a sustained move above 24,400 is essential to revive bullish sentiment. Midcap resilience provided some relief, but the banking sector’s performance remains critical as it has led the recent recovery. Traders should closely monitor these key levels and adjust strategies accordingly,” he said.

Bharti Airtel surged 3.82 per cent to Rs 1,620. Sun Pharma advanced 2.87 per cent to Rs 1,784 while Mahindra & Mahindra added 2.32 per cent to Rs 2,963 apiece. Larsen & Toubro, RIL, JSW Steel and UltraTech Cement gained up to 2 per cent.

For investors, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said the ‘Buy on dips’ strategy may not yield short-term gains in this market. “But this strategy can be applied by investors with a medium to long-term time horizon. Largecaps in financials, IT, capital goods and telecom are ideal for accumulation from a medium to long-term perspective,” he said.

The day saw NSE including 45 new stocks to the F&O segment. As Dalal Street enters the first day of December’s F&O series, stock-specific action is set to dominate, said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.

“Notable additions include Indian Bank, Union Bank, LIC, Cyient, KPIT Technologies, Adani Green Energy, DMart, and Zomato,” he said.

On recent FPI outflows, V K Vijayakumar, Chief Investment Strategist atGeojit Financial Services said the inexplicable volatility in FII activity has led to perplexing market action in recent days.

“A few days of buying followed by yesterday’s massive selling of Rs 11,756 crores is difficult to explain. What are the factors contributing to this apparently irrational activity? Is this a one-off? Or, is there more to come? Answers to these questions will be available in the coming days. It is better for investors to wait and watch. Lots of stock specific actions are likely starting today in response to the inclusion of 45 new stocks to the F&O list,” he said.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.