Foreign portfolio investors (FPIs) are in the midst of a relentless selling streak in Indian markets, now hitting their 13th straight session of outflows. On Tuesday alone, FPIs pulled out 13.05 billion rupees ($136.96 million) from local stocks. But domestic institutional investors (DIIs) stepped up, making net purchases worth 24.39 billion rupees. This move by DIIs helped offset the foreign sell-off.
Indian stock indices, the Nifty and Sensex, saw an uptick of around 1.6% on Tuesday. This rise was fueled by a strong showing from information technology stocks. HCLTech's quarterly earnings surpassed market expectations, giving the market a boost. Despite this, the overall outlook remains cautious. Rising oil prices and ongoing foreign outflows continue to dampen investor sentiment.
GIFT Nifty futures pointed to a tepid start for the Nifty 50 on Wednesday morning, with futures trading at 22,764 at 7:50 a.m. IST. This comes after the Nifty 50 closed at 22,721.95 on Tuesday. While there's some improvement in the near-term outlook, concerns persist. Inflationary pressures are mounting due to escalating tensions in the Middle East.
Oil prices have climbed to about $107 a barrel. This rise is driven by supply fears linked to conflicts involving Yemen's Iran-backed Houthis and Saudi Arabia. Yet, the possibility of increased diesel supplies from Russia is offering some relief. Even with these global pressures, other Asian markets experienced modest gains, with AI-related shares bouncing back from previous losses.
Ponmudi R, CEO of Enrich Money, remarked that corporate earnings and strength in the IT sector have lent some support. However, the broader market remains wary due to external risks. The upcoming US inflation data is another concern for investors, potentially swaying market trends.
Stocks to Watch
- Bharat Electronics reported receiving orders worth 5.33 billion rupees since September 17.
- Wipro announced it does not foresee a significant business impact from the US PERM suspension.
- The US drug regulator completed an inspection at Zydus Lifesciences' Ahmedabad plant, issuing five observations.
- Gujarat State Fertilizers and Chemicals' board approved a plan to establish a phosphoric acid and sulphuric acid plant at its Sikka unit.
In the realm of corporate earnings, Tata Elxsi reported a rise in quarterly profits, driven by growth in its transportation and media segments. Anand Rathi Share and Stock Brokers also saw a notable increase in net profit. Meanwhile, Transformers and Rectifiers India reported that its September-quarter profit more than doubled compared to the previous year.
