Sectoral Resilience Boosts Domestic Indices to Higher Levels
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, Market Moves, Market Watch
After experiencing notable declines over the last few weeks, Indian benchmark indices finally gained ground and continued to demonstrate resilience on the sectoral front.
The domestic market sustained its robust performance on the sectoral front, witnessing FIIs transitioning into net buyers after a prolonged period
After experiencing notable declines over the last few weeks, Indian benchmark indices finally gained ground and continued to demonstrate resilience on the sectoral front. Foreign portfolio investors (FPIs) emerged as net buyers thanks to a decline in US Treasury Bond yields and crude oil prices. Having transitioned to net buyers after an extended period, FIIs reported an inflow of ₹1,258.11 crore in the last two weeks, while DIIs sustained market support with an inflow of ₹3,692.77 crore.
The fortnight proved upbeat for the main indices with the BSE Sensex gaining 1.64 per cent and the Nifty 50 surging 1.90 per cent during the period. Investor confidence manifested prominently in the broader indices where BSE SmallCap and BSE Mid-Cap indices demonstrated gains of 3.72 per cent and 3.21 per cent, respectively. All the sectoral indices recorded positive movements, with the exception of BSE Bankex, which reported a marginal decline of 0.49 per cent.
The banking sector felt the impact of the Reserve Bank of India’s decision to raise risk weights. The central bank increased the capital required for banks and NBFCs by 25 percentage points to 125 per cent on retail loans with the intention of strengthening India’s financial stability amid a significant surge in unsecured loan growth. The real estate sector maintained its position as the topperforming sector, with the BSE Realty index posting gains of over 6 per cent in the last fortnight, fuelled by strong demand evident in presales figures.
Additionally, residential property rentals in 13 major Indian cities surged by 22 per cent compared to the previous year, with millennials playing a key role in driving this unprecedented demand. Surprisingly, the information technologysector made its way into the list of top-gaining sectors, driven by heightened optimism stemming from ongoing collaborations between domestic industry leaders and global IT majors to develop AI solutions.
These partnerships serve as a beacon of light for the IT industry amid an otherwise gloomy global outlook. Wipro has also recently revealed a collaborative venture with NVIDIA, aiming to facilitate the adoption of artificial intelligence in the healthcare sector. The primary market exhibited remarkable resilience and notable activity, marked by the successful closure of five mainboard IPOs.
The majority of these IPOs generated substantial investor interest, as reflected in high subscription levels. Notably, Tata Technologies’ IPO stands out with the highest grey market premium, anticipating a listing gain of more than 80 per cent. In recent developments, India’s headline retail inflation rate dropped to 4.87 per cent in October, as reported by the Ministry of Statistics and Programme Implementation. This decline can be attributed to a favourable base effect and the moderation in prices of certain items.
