Domestic markets are likely to continue the bull momentum on Monday as well. According to analysts, with foreign institutional investors pouring money into Indian stock markets, there is little doubt about the continuity of the rally. With the strong backing of institutional investors, both domestic and foreign, experts believe that benchmarks Sensex to hit 70,000 and Nifty 20,000 soon.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: FPI flows into India are continuing unabated. The decline in the dollar index to below 100 on Friday, the lowest level in one year, favours emerging markets. India is the largest recipient of FPI flows YTD among emerging markets. The selling in China continues and FPIs were sellers in EMs like Thailand and Vietnam also recently.
Nifty futures at Gift City is ruling at 19,630, indicating a gap-up opening of about 50 points, as Nifty futures on Friday closed at 19,598.85.
Ritesh Bhagwati, Vice President, Rockstud Capital India shines as an attractive destination for global investors. The positive movement continued in Indian equities with the benchmark BSE Sensex crossing the 66000 level.
“We believe the broad market rally is on the back of Interest rate stability while locally we have taken a pause and expect a rate cut by 4QFY24, Globally the market is expecting 1 or 2 further 25 bps rate hikes but the directional expectation is Fed would take pause and expect a rate cut in CY24. This has triggered asset allocation globally with flows reversing from developed markets to developing markets so far, we have seen FII investing close to Rs. 1.28 lakh crore calendar year.”
Asia-Pacific stocks in red
Analysts also expect the benchmark Nifty to hit 20000 soon, as fundamental factors favour India. Global markets also sending positive signals. However, most global stocks are ruling weak in early trade on Monday.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said:“The Nifty’s recent surge above the psychological 19500 mark is a significant milestone for the Indian market. With the continued positive catalysts, such as softer inflation readings in the US and expectations of a pause in rate hikes by the Fed, the bulls are likely to remain in control. Looking ahead, there is room for further upside, and we anticipate the Nifty to reach fresh all-time highs around the 20,000 mark in the near term.”
FPIs’ Long-Short ratio at over 70 per cent
According to Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, bulls are in top gear. The Foreign Portfolio Investors (FPIs) Long-Short Ratio crossed 70 per cent as they continued to build long positions in Index futures. The open interest (OI) of Nifty Index Futures saw Long Buildup in the last five of the six trading sessions, he added.
“The Put-Call Ratio (PCR), a sentiment indicator, rose to 1.41 from 0.81 in the last six trading sessions, indicating put writers are in a driving seat,” he further said.
However, there are some words of caution too.
“Declining dollars is a powerful trigger that can sustain the FPI inflows. The concern, however, is the rising valuations which are getting stretched. The valuations in China (PE is 9) is hugely attractive now compared to valuations in India (PE is around 20) and, therefore, the ‘Sell China, Buy India’ policy of FPIs cannot continue for long,” warned Dr Vijayakumar