Global Cues, FPIs Buying Equities Drive Market Up

Mumbai: Ahead of the interim Union Budget, Sensex and Nifty-50 rallied more than 1.75 per cent. Also supported by positive global cues from the Asian market, the Sensex gained 1240.90 points or 1.76 per cent to close at 71,941.57 while Nifty-50 closed at 21,737.60 up 385 points or 1.8 per cent.

Market got a big boost from foreign portfolio investors (FPIs) turning net buyers on Monday by Rs.110.01 cr after a big sell off seen so far in January and short covering by domestic institutions ahead of Budget, as they were net buyers of equities worth Rs.3,221.34 cr.

Index heavyweight Reliance Industries closed 6.86 per cent up at Rs.2,896.15 on BSE, its market cap touched a new high of over Rs.19.59 lakh cr. The broader market also rallied in tandem expecting positive announcements in the Budget, the BSE mid-cap index gained 1.68 per cent while BSE small-cap index gained 1.03 per cent.

BSE’s market capitalisation soared above the $4.5 trillion mark as it stood at a new all time high of over Rs.377.20 lakh crore at market close.

Expecting an industry friendly Budget and ahead of third quarter earnings some blue chip stocks rallied led by Larsen & Toubro (3.25 per cent), Tata Motors (3.62 per cent), Adani Enterprises (5.86 per cent), NTPC (3.11 per cent), Adani Ports (4.36 per cent).

HDFC Bank gained 1.42 per cent after LIC got RBI nod to raise stake in the company to 9.99 per cent.

Market is likely to see some volatility ahead due to the US Fed meeting outcome on January 31 night and interim Budget on Feb.1. Volatility index NSE's India VIX rose a hefty 13.09 per cent on Monday to 15.68 indicating market volatility pre and post Budget and US Fed meet outcome.

“Indian equity markets rose sharply on the back of great expectations from the upcoming budget and strong cue from other Asian markets. We believe that the volatility will continue in the coming days as the results season unfolds. The market will also be keenly looking at the upcoming US Fed meet to see any change in Fed’s stance towards inflation expectations and rate cut cues,” said Manish Jain, head - Fund Management, Centrum.