Uptick in purchasing activity by Foreign Institutional Investors

The country’s stock markets continued their upward trajectory this week, marking a sixth consecutive week of record highs. Despite the bullish sentiment, some investors are disappointed as their stocks underperformed. With the Union Budget set for July 23, large investors might book profits, potentially pausing the market’s rapid ascent.

While the long-term outlook for the Indian stock market remains robust, investment decisions should be based on individual company performance, not just index growth. Investors are advised to avoid weaker stocks. Last week’s market gains were significantly influenced by increased purchasing activity from foreign institutional investors (FIIs), which added momentum.

However, the market’s pace is no longer solely dictated by FIIs. Significant sums are being invested monthly through direct investments and systematic investment plans (SIPs).

I have previously highlighted the IT sector’s future prominence, a prediction now proving accurate. A clear indicator is the substantial increase in market value of TCS, the country’s largest IT firm. Investors should approach their activities cautiously, basing decisions on a thorough understanding of circumstances. Securing gains when possible is advisable. In the latest trading session on Friday, the BSE index surged by 622 points, contrary to slight declines over the past two weeks. The BSE index increased by 522.74 points (0.65%) over the week, closing at 80,519.34 points after peaking at 80,893.51 points. The NSE Nifty index rose by 178.30 points (0.73%), closing at 24,502.15 points after a high of 24,592.20 points.

Despite these gains, the midcap and smallcap indices showed little response, indicating potential weakness in these segments. FIIs have shown growing confidence in the Indian stock market, with purchases amounting to Rs 3,843.99 crore last week. DIIs surpassed FIIs with purchases totaling Rs 5,390.67 crore. In the bullion market, gold and silver prices remained stable due to international factors.

Gold prices decreased by Rs 100 per 10 grams, while silver prices increased by Rs 300 per kilogram. In Jaipur, 24-carat gold declined from Rs 75,000 to Rs 74,900 per 10 grams, while silver rose from Rs 94,400 to Rs 94,700 per kilogram. Traders anticipate that gold and silver prices will remain stable this week

Companies viewed favorably include ITC, Castrol, Zomato, Paytm, Suzlon Energy, IRDA, Manipur Finance, Hathway Cable, Indus Tower, and John Cockerill India. However, even robust stocks may not be immune to market declines.

IPO opportunities are on the horizon. Sunstar Limited will offer shares priced between Rs 90 to 95 with a face value of Rs 2 on the main board this week. Additionally, investors can participate in IPOs of eight companies on the MSME platform. SEBI has also received IPO applications from Zinka Logistics Solutions and BMW Ventures, who have submitted their draft herring prospectus and revised draft herring prospectus.

THESE ARE THE PERSONAL VIEWS OF THE AUTHOR