NEW DELHI: Domestic equity market rallied on Tuesday with the benchmark indices -- NSE Nifty and BSE Sensex -- gaining nearly 1% each.
The rally is attributed to wholesale inflation dropping to a 2-year low in December 2022 and oil refiners edged ahead after the government slashed windfall tax on crude and aviation fuel. The Nifty50 closed at 18,053, up 158 points, whereas the BSE Sensex closed at 60,656, up 563 points.
However, relentless selling by foreign institutional investors (FIIs) continues to remain a concern for the market. Except for Tuesday, FIIs were net sellers for 17 sessions in a row, selling around Rs 24,638 crore between December 23 and January 16.
The selling, however, took a break on Tuesday and FIIs net inflow stood at a meager Rs 211.06 crore, according to the provisional NSE data. V K Vijayakumar, chief investment strategist at Geojit Financial Services, said the dominant trend impacting the near-term texture of the market is the sustained selling by FIIs for the eleventh time this month.
There is selling pressure even in bluechip names such as HDFC Bank, that too, after impressive Q3 results. “The simple logic behind sustained FII selling is that India is the only large market where FIIs are still sitting on good profits after the disastrous 2022 performance in most global markets. FIIs are playing it safe by moving money to cheaper markets where there is valuation comfort,” added Vijayakumar.
As per market experts, money is being moved to markets like China, Hong Kong and South Korea where current valuations are much lower.