THE PACE OF RISE MAY SLOW DOWN, BUT WILL NOT STOP

In the dynamic landscape of the Indian stock market, a sustained bullish trend is captivating investors’ attention, backed by the strategic moves of foreign institutional investors (FIIs).

After a significant reduction in their positions last November, FIIs are now eyeing the robust Indian economy, hesitatingly waiting for an opportune moment amidst the current bullish phase.

Market analysts said that FIIs offloaded shares worth Rs 75 thousand crores throughout 2023 until November.
However, in December, there was a noticeable shift as FIIs re-entered the market by purchasing shares worth Rs 29,700 crores.

This indicates a substantial surplus of Rs 45 thousand crores waiting to be reinvested, coupled with fresh investments on an annual basis. The injection of new funds is anticipated to propel the market further upwards, as historical data attests to the market’s responsiveness to fresh capital.

Readers are encouraged to revisit earlier articles highlighting the pivotal role played by Indian investors, predominantly through Systematic Investment Plans (SIP), in propelling the market to new heights.

Despite a momentary deceleration, the influx of crores of rupees into the market every month from domestic investors underscores the overall bullish sentiment, assuring a positive trajectory.

Reflecting on the recent week, ending on December 15th, the market experienced a consistent upward trend. Contributing factors included institutional investors’ buying spree, a drop in crude oil prices, and indications of future interest rate reductions by the US Federal Bank in 2024.

During the week, FIIs purchased shares worth Rs 18,858.34 crores, counteracted by domestic institutional investors (DIIs) selling shares worth Rs 2,592.35 crores. This propelled both BSE and NSE indices upwards, with midcap and smallcap indices following suit.

Looking ahead, traders anticipate the positive momentum to persist. Sectors such as auto, bank, IT, infrastructure, and pharma, along with select companies like Tata Motors, Reliance Industries, JSW Infra, HPCL, BPCL, and Adani Port, are currently deemed safe investments.

However, traders caution that even reputed stocks may face downturns during periods of market sentiment weakness.

In the current week, investors have the opportunity to explore IPOs from eight companies, including Jaipur’s Motisons Jewellers Limited, listed on the main board. Additionally, seven IPOs are available on the SME platform.

Notably, Denta Water and Infra Solutions Limited have submitted its draft red herring prospectus (DRHP) to SEBI, signaling continued market dynamism.

The views expressed in this article are the author’s personal opinion, and it’s disclosed that the author, as well as family members and acquaintances, may have investments in the mentioned companies

Vimal Kothari Associate Editor, First India News & Senior Journalist