However, with foreign funds continuing to take money out from the domestic stock market, brokers and analysts are not yet ready to call this up move a reversal trend, mainly because of uncertainties relating to the Russia-Ukraine war. From now on, geopolitical developments and state poll results are expected to dictate the market’s direction. “The recent (market) rebound is in line with global counterparts and it would be too early to call it a reversal. Besides the geopolitical updates, states’ election results will also be in focus,” said Religare Broking VP (research) Ajit Mishra.
On Wednesday, foreign portfolio investors (FPIs) continued to sell heavily in the domestic market with the net selling figure at Rs 4,819 crore. The day’s net sale also took the total outflow for 2022 to over Rs 1 lakh crore, data from BSE and CDSL showed. However, market players pointed out that FPIs were again going long through the derivatives route, showing bullish sentiment.
In the short term, however, rising prices of commodities and inflation were bothering traders. According to Emkay Global Financial Services head (sales trading) S Hariharan, there are risks for the broader markets “on account of flaring commodities prices and attendant assumptions on bond yields, both globally and domestically”. With several of the central bank meetings scheduled in the coming week, Hariharan expects markets to move primarily on macro news.
Since the conflict in Europe started on February 24, stocks of companies dealing in metals, coal, crude oil, etc, have rallied since prices of these commodities have run up due to war-related uncertainties. Market players now expect the companies that use these commodities as raw materials to be impacted due to higher inputs costs.
In Wednesday’s market, Reliance Industries led the rally on reports that the company was planning to export diesel from its refineries to Europe. The stock closed 5.2% higher and accounted for 357 points of the sensex’s 1,223-point rise, BSE data showed. Other top contributors were HDFC Bank, Infosys and Bajaj Finance. The day’s gains added about Rs 4.7 lakh crore to investors’ wealth with the BSE’s market capitalisation now at Rs 251.4 lakh crore, official data showed.