Modi visit to US: Foreign funds pump stock market; big boys take playground
By S Jha
New Delhi, June 30: In four days of trading in the truncated week, coinciding with the conclusion of the US visit of Prime Minister Narendra Modi, Nifty has gained over 500 points, or 2.74 per cent, while Sensex is sitting at peak at 64718, an all-time high for the index.
While the foreign institutional investors (FIIs) had pumped over Rs 12,000 crores yesterday, they backed up their gung-ho spirit on Friday with another Rs 6000 crores in the cash markets. The combined push of the institutional buying, foreign and domestic both, brought over Rs 7000 crores in the cash markets on Friday, helping the indices to go soaring on a trending day in the trading session.
The major takeaways from the Modi visit to the US, concurred by most of the commentators, was technology transfer in critical areas and far more closer cooperation, which may pave the way for steady flow of investment in the country. While the foreign direct investments may take time, the FIIs have jumped the queue to lap the opportunities in the event the China de-coupling brings better tides for the Indian economy.
The FIIs by nature buy into blue chip companies, and small investors may be wondering that their portfolios are without gains while the sensex is at a record high. The answer is simple – the small investors buy into small companies, and the FII-led rise in the stock market has brought the big boys of the stock market into the playground. It’s the index heavyweights which are trending these days.
The auto index, a clear winner for the past 18 months, once more ruled the street. There were reports that the market appetite for the auto sector is growing and there is a prospect of 30 per cent expansion in their markets. Mahindra and Mahindra, Maruti, and Hero Motors led the charge from the auto sector, making smart gains on Friday.
The IT index, the sector has been a favourite with the FIIs for years and also gaining attention on account of the automation and AI play, trended on Friday, with the industry behemoth Infosys leading the show. TEC, Tech Mahindra and HCL technology also joined the show. It must be noted that the small IT companies such as Cyient, Nucleus Software, R Systems, and others have strongly gained in the last few months on the street. However, the midcap IT scrips have lagged behind in the show.
About The Author
