Mumbai: Overseas fund managers’ appetite for Indian equities has dimmed of late as a strengthening
dollar, rising oil prices and stretched share valuations have made them wary about near-term prospects. Foreign Portfolio Investors have been sellers in nine out of the 11 previous trading sessions since June 16. Their net outflow in this period was only over Rs 250 crore but that was on account of bulk deal inflows into select stocks on two days. But for these purchases, the FPI sales figures would have been much higher.
“A weakness in the US dollar rate against the rupee could be reflected in changing risk attitudes of investors,” said Mark Mobius, veteran emerging markets investor and founder of Mobius Capital Partners.
The Indian markets posted sharp gains for the second day on Tuesday, with the Sensex reclaiming the 50,000 mark and the Nifty topping 15,000 after more than two months. Automobile and banking stocks rallied amid optimism that the lethal second wave of Covid-19 has peaked. The Sensex ended the session at 50,193 with a gain of 612 points, or 1.2 per cent. This is the first time since April 1 that the Sensex has closed above 50,000. The Nifty, on the other hand, closed at 15,108, gaining 185 points, or 1.2 per cent. The 50-stock index settled above 15,000 for the first time since March 12. In the past two trading sessions, the benchmark indices have soared 3 per cent.
The benchmark Sensex posted its biggest single-day jump in nearly a month on Wednesday, as strong earnings reported by the financial sector helped revive sentiment earlier dampened by the surging number of cases.
While the infection tally continued to climb and Maharashtra extended restrictions on movement by another 15 days, investors chose to look beyond the short-term pain, said analysts.
The Nifty50 ended the session at 14,864, with a gain of 211 points or 1.4 per cent. The benchmark Sensex finished the session at 49,733, with a gain of 790 points, or 1.61 per cent the most since March 30. In the past three sessions, the index has rallied nearly 4 per cent. However, it is still down 5 per cent from its all-time high logged in mid-February.
Analysts say foreigners are cutting their short-term trading bets with the outlook for the economy turning uncertain after the virus spreading rapidly and causing record deaths.