Indian Equity Markets Rally Strongly

Stock market today: Nifty50 and BSE Sensex, the Indian equity benchmark indices, rallied strongly in opening trade on India-Pakistan ceasefire and US-China trade deal progress. Both indices rallied over 2% cheered by domestic stability and favourable global news.

While Nifty50 went above 24,600, BSE Sensex crossed 81,300 mark. At 9:31 AM, Nifty50 was trading at 24,605.25, up 597 points or 2.49%. BSE Sensex was at 81,362.37, up 1,908 points or 2.40%.

Market Experts Predict Optimistic New Week

Indian equity markets closed lower in the previous week due to India-Pakistan tensions. However, the declaration of a ceasefire is likely to reduce investor concerns, with market experts predicting an optimistic new week.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited says, "The hallmark of FPI investment in recent days has been the sustained buying by FIIs. FIIs bought equity through the exchanges consecutively for 16 trading days ending 8th May for a cumulative amount of Rs 48533 crores. They sold for Rs 3798 crores on 9th May when the India-Pak conflict got escalated. Now that ceasefire has been declared, FIIs are likely to resume their equity purchases in India.

Global Macros Facilitate Increasing FII Inflows

It is important to understand that FIIs were continuous sellers in India in the first three months of this year. The big selling began in January ( Rs 78027 crores) when the dollar index peaked at 111 in mid January. Thereafter the intensity of selling declined. FIIs turned buyers in April with a buy figure of Rs 4243 crores. Global macros ( declining dollar, slowing US and Chinese economy) and domestic macros ( high GDP growth and declining inflation and interest rates) will facilitate increasing FII inflows into Indian equity, going forward. Debt inflows are declining and likely to remain very low.