Stock indices ended at fresh record closing highs on Monday, with the Nifty ending above 15,750 for the first time, as daily Covid-19 cases in India hit a two month low, encouraging some states to ease curbs. Gains were however measured after foreign funds turned net sellers for the first time in June. Money managers said the undertone remains optimistic but the 7.6% advance in stock benchmarks since early May has slowed down the momentum.
Domestic institutional investors purchased shares worth ₹984 crore on Monday.
Foreign portfolio investors sold shares worth ₹186.5 crore, having been buyers to the tune of ₹820 crore on average daily so far in June. They have pumped ₹4,117 crore into stocks so far this month.
The consistent drop in infections and rise in recoveries has prompted Maharashtra and Delhi to partially ease restrictions.
There’s a sense of relief in the market that the Covid situation has improved dramatically from the second week of May, said Hemang Jani, head of equity strategy, broking and distribution, Motilal Oswal Securities. The impact of lockdowns on earnings would be much less severe than in the worst-case scenario had restrictions stretched beyond two months, he said. “India has outperformed most markets in the last three or four weeks.”
Holland said equities are likely to do better in the near term as other avenues such as fixed deposits and gold are not offering large returns to investors.