Mkts up as FII inflows jump, eye good long-term positions

FIIs are eyeing good long-term positions at least for a year or so, and in fact, some are keen cash market players

Markets on Friday concluded the week with consistent recovery, supported by fresh foreign fund inflows and gains in financial sector stocks. Foreign institutional investors bought equities worth Rs 7,457 crore on Friday. Domestic institutions, however, booked profits and sold equities worth Rs 3,202.26 crore.

Key indices Sensex and Nifty surged nearly one per cent on Friday, marking their fifth day of rise on the back of fresh foreign fund inflows and gains in financial sector stocks.

The BSE 30-share Sensex had crossed the 77,000-mark on Friday before closing 557.45 points higher at 76,905.51. The NSE Nifty climbed 159.75 points to 23,350.40. Investors’ wealth jumped by Rs 22.12 lakh crore in the five-day stock rally which saw the BSE Sensex jumping more than four per cent.

“The undercurrent is encouraging. However, non-speculative investors must wait for the reciprocal tariff announcement before deciding on real investment strategies,” a veteran stockbroker-turned investor said. 

“The rally in the market this week was at a time when trade tensions were escalating. More pressures are expected when the reciprocal tariffs kick in on April 2. The main driver of the rally has been FII cash market-buying. The market also witnessed a sharp decline in FII short-positions and increase in long positions in the futures market. It appears that this has given confidence to retail investors who have resumed buying in the broader market segment which is getting reflected in the smart rebound in the mid and smallcap indices. Investors are advised to wait, and watch for the reciprocal tariff announcement on April 2, before deciding on real investment strategies,” Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services told The Free Press Journal.

According to Vinod Nair, Head of Research at Geojit Financial Services, the domestic market has concluded the week with consistent recovery. The anticipated reduction in risk-free rates, coupled with the correction in the dollar index, are facilitating fund flows back to emerging markets.

FIIs, whose selling activity has been waning, are becoming net buyers, driven by dovish signals from the US Fed, which suggest the possibility of two rate cuts this year. This has reignited optimism in the domestic market. Despite global uncertainty from escalating trade tensions, improving domestic macroeconomic indicators, valuation corrections, and anticipated earnings growth are encouraging investors to seek bargains.”