FII buying has been a mainstay of the current rally pushing it to record highs. The selling in the market is now on expected lines as analysts had predicted a consolidation in the market.
“The decline in Nifty by 218 points on Friday was caused by high level of selling by institutions- both FIIs and DIIs sold- particularly in banking stocks. The frontline banking stocks also corrected and consequently Bank Nifty declined by more than 1,000 points. Today the trend in Nifty is likely to be dictated by the leading banking stocks and FII action,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“FIIs have poured in Rs 24,469 crore net in equity so far in 2021 supporting the market. So this space has to be watched closely. Budget expectations will influence the market significantly in the coming days.”
Factors driving markets
Stimulus hopes grow: The US Senate Finance Committee on Friday unanimously approved Janet Yellen’s nomination as Treasury secretary, indicating that she will easily win full Senate approval on Monday. Yellen at her confirmation hearing last week urged lawmakers for large coronavirus relief spending.
Vaccinations pick pace: Global coronavirus cases rose to more than 98 million as countries continued to work on the pace of vaccinations. India said it has vaccinated over 1 million people.
How are bluechips doing
After opening in the green, benchmark indices drifted lower. At 9.49 am, BSE flagship Sensex was down 126 points or 0.26 per cent to 48,752. NSE benchmark Nifty followed and dipped 109 points or 0.76 per cent to 14,262.
“Even though the markets have opened in the green, a stiff resistance awaits the index at 14,550-14,600. We will resume the uptrend only if we can manage to get past that trading zone on the back of healthy volumes. Until then the Nifty seems nervous in the short term time frame with a downward bias. We can go down to 14,000-14,100 levels,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, Grasim Industries was the biggest gainer, up 4.50 per cent. UltraTech Cement, Bajaj Finance, HDFC, UPL, Bajaj Finserv, HDFC Bank and JSW Steel were among other gainers.
Reliance Industries was the top loser in the pack, down 3.04 per cent. Asian Paints, Eicher Motors, Power Grid, Tata Motors, HIndalco, ONGC, HCL Tech, ITC and Nestle India were other losers in the pack.
Broader market indices traded with gains but underperformed their headline peers in the morning trade. Nifty Smallcap added 0.02 per cent while Nifty Midcap climbed 0.05 per cent. Broadest index on NSE, Nifty 500 was up 0.36 per cent.
Shriram Transport Finance, M&M Financials. Chola Finance, Century Ply, JK Lakshmi Cement and DCM Shriram were among major gainers from the space while Sterlite Tech, Century Textiles. FDC, Polycab India, Crompton Greaves and Nippon AMC were under selling pressure.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose slightly to 721.96 and just a short distance away from last week’s record high of 727.31.
The benchmark is up 8.5 per cent so far in January, on track for its fourth straight monthly rise. Japan’s Nikkei rebounded from falls in early trading to be up 0.36 per cent. Chinese shares rose, with the blue-chip CSI300 index up 0.6 per cent.