MUMBAI: Benchmark indices opened at eight-month highs on Wednesday (November 11) as foreign portfolio investors (FPIs) returned as buyers and crude oil prices remained subdued following the Diwali holiday break.
The 30-share BSE Sensex opened 1,142.03 points, or 1.41 per cent, higher at 82,248.68 against Monday's close of 81,106.65. It was trading at 82,186.92, up 1,080.27 points, in early trade. The 50-share NSE Nifty opened at 25,337.80 and was quoted at 25,317.55, up 272.90 points. Both indices were at their highest levels since February 27. They have gained about 10 per cent this month.
Foreign fund inflows have been a major driver of the rally. Foreign institutional investors bought equities worth Rs 7,212.22 crore on Monday (November 09), exchange data showed, taking the net purchases to Rs 53,739 crore between November 02 and 09, covering six trading sessions, according to depository data. This followed net outflows of Rs 34,843 crore in October and Rs 35,861 crore in September.
Domestic institutional investors, however, were net sellers on Monday, offloading equities worth Rs 7,172.53 crore.
Brent crude traded around USD 92.44 a barrel after falling to a two-month low of USD 89.16 on Tuesday (November 10), when US officials played down the prospect of further military action against Iran, easing concerns over potential supply disruptions.
The rupee opened at 93.72 against the US dollar, strengthening from its previous close of 93.93.
InterGlobe Aviation, Mahindra & Mahindra, Eternal, HDFC Bank, Power Grid and Bharti Airtel were among the Sensex gainers, while Titan was the only stock trading in the red in early trade. Sectoral indices were broadly higher, led by PSU banks, automobiles, financials and consumer durables, while pharma stocks lagged.
The rally has also drawn support from corporate earnings, rather than foreign fund flows alone.
"The Nifty-50 has surged by 8.6 per cent in just seven trading days of this month. This surge was triggered mainly by the aggressive FII buying of Rs 53,170 crore so far this month. The dramatic change in the market environment was triggered by positive global clues for India from the weakening of the AI trade. But it is important to note that the real fundamental support to the rally has come from the better-than-expected Q2 results," V K Vijayakumar, chief investment strategist at Geojit Investments, said.
Nifty 50 earnings grew about 24 per cent in the September quarter, marking a 12-quarter high and helping moderate forward valuations, he said.
Markets were closed on Tuesday for Diwali Balipratipada. On Monday, the Sensex ended 107.25 points higher at 81,106.65, while the Nifty gained 58.25 points to close at 25,044.65. (with inputs from media organisations)