India markets show how tough they are! Nifty, Sensex bounce back despite third day of selling pressure- The Week

India stock market once again proves its mettle, powered by domestic investors. Benchmark indices are back to green, rebounding from Wednesday morning’s opening slide as it entered the third day of selling by foreign investors. Domestic institutional investors and firms continued their mantra of buying the drip, turning the market around.

In early trade, the BSE Sensex rallied by 168.79 points to 80,389.51, while the NSE Nifty climbed 46.2 points to 24,518.30. Banks such as HDFC and Kotak Mahindra, along with Bajaj Finserv, IT services giant TCS and automaker Maruti Suzuki were among the top gainers in morning trade.

Bajaj Finance stock inched up on its earnings after announcing a lacklustre 3 per cent lift in consolidated net profit hitting Rs 4,014 crore for the second quarter ended September 2024. Bajaj Finserv, HDFC Bank, Nestle, Kotak Mahindra Bank, Tata Consultancy Services, and Maruti were among the other big gainers. NTPC, UltraTech, and Mahindra and Mahindra were among the scripts that fell behind.

“The ongoing trend of largecaps outperforming mid and smallcaps is likely to sustain, going forward. FII selling and the countervailing trend of DII buying is likely to continue. This will impart strength to largecap financials, particularly banking stocks like HDFC, ICICI, Axis and Kotak which are fairly valued in this market with elevated valuations,”said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

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According to the NSE, Domestic Institutional Investors (DIIs) bought equities worth Rs 5,869.06 crore on Tuesday, despite foreign investors offloading a massive Rs 3,978.61 crore following global factors. Chinese recovery was further bolstered by Shanghai and Hong Kong trading higher. Among the other Asian markets, Seoul was up, but Tokyo was down. On Tuesday, the BSE benchmark slipped 930.55 points or 1.15 per cent to 80,220.72, while the NSE Nifty fell 309 points or 1.25 per cent to 24,472.10. The Indian rupee was nearly flat at 84.0675 versus the US dollar.

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Banking and market expert Ajay Bagga sees India to represent “the biggest opportunity to deliver growth, at massive scale in the world, for the next two decades.”

“We can’t control global events, though we know the extreme market reactions that follow. Given that recoveries are also very sharp and concentrated into a few days, the bigger risk is that of being out of the markets,”added Bagga, as India’s local investors and organisations went on a buying spree in the past few days, offsetting the offload by foreign investors.