fpi: Indian indices jump 1.2% on FPI buying, short covering

Mumbai: Indian equities flagged off the new financial year on a strong note with the Sensex and Nifty jumping 1.2% on Friday as renewed foreign buying improved sentiment, prompting traders to cut bearish bets. While most Asian bourses remained tentative, Indian markets were driven by strength in power and financial stocks.

The Nifty ended 205.80 points, or 1.18%, up at 17,670.45 while the Sensex closed at 59,276.69, up 708.18 points or 1.21%.

The Stoxx Europe 600 was 0.6% up on Friday as talks between Russia and Ukraine resumed, following meetings during the week. Brent crude futures were up 0.9% to $106 per barrel. In Asia, the Nikkei, South Korea and Taiwan indices ended down 0.4-0.7% while Singapore, China and Hong Kong benchmarks ended 0.2-0.9% up.

Foreign portfolio investors (FPIs) bought shares worth ₹1,909.8 crore while domestic institutional investors sold equities worth nearly ₹184 crore. Friday marked the third day of buying by overseas funds in contrast with recent outflows. They have bought shares worth about ₹7,400 crore after selling around ₹39,400 crore of them between March 1 and March 29. Brokers however said that a chunk of the recent inflows were on account of block deals. So far this year, FPIs have sold Indian shares worth ₹1.05 lakh crore.

Indian Indices Jump 1.2% on FPI Buying, Short Covering

“From an earlier scenario of selling, foreign investors are now buying consistently,” said Sunil Singhania, founder, Abakkus Asset Manager. “On the economy front, GST numbers were strong,” he said, referring to record goods and services tax revenue in March.
Analysts said the Nifty could touch 18,000 in the coming days if foreign institutional flows continue. The index hit a record of 18,604.45 on October 19 last year, while the Sensex logged an all-time high of 62,245.43 on the same day.

Analysts said bank stocks need to perk up for the index to cross 18,000.

“In select banks, there are still short positions which are getting covered in each bout of rise. There are more legs to the rally and the Nifty could see 18,000 in the coming days,” said Sriram Velayudhan, vice president, alternative research at IIFL.

The Nifty and Sensex have gained 12% from their March lows, helping both indices cross key technical resistance levels. Investors are however not confident enough about going all out on equities as concerns over the US Fed monetary tightening loom over the markets. Also, there are uncertainties about the impact of elevated commodity prices on inflation, domestic consumption and corporate earnings.

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