Indices see modest gains amid choppy trading and FPI uncertainty

Synopsis

Foreign portfolio investors (FPIs) bought shares worth a net ₹931 crore on Wednesday after being marginal buyers worth ₹88 crore the previous day. So far in May, FPIs bought equities worth ₹11,663 crore after purchasing ₹3,416.08 crore in April. Domestic institutional investors (DIIs) bought shares worth ₹316 crore.

Mumbai: India's equity indices eked out gains in choppy trading on Wednesday, as uncertainty over whether foreigners would continue buying stocks here put a lid on upside.

The NSE Nifty gained 0.36%, or 88.55 points, to finish at 24,666.90. The BSE Sensex moved 0.22%, or 182.34 points, higher at 81,330.56.

"Foreign investors sold heavily on Tuesday in the derivatives segment, which led to weakness in the first half of the session (Wednesday), but the markets managed to recover," said Shrikant Chouhan, Head of Research, Kotak Securities.

Chouhan said the amount of bearish bets that Foreign Portfolio Investors built in Nifty futures on Tuesday was significant, resulting in some caution on Wednesday.

Agencies

Foreign portfolio investors (FPIs) bought shares worth a net ₹931 crore on Wednesday after being marginal buyers worth ₹88 crore the previous day. So far in May, FPIs bought equities worth ₹11,663 crore after purchasing ₹3,416.08 crore in April. Domestic institutional investors (DIIs) bought shares worth ₹316 crore.

Other Asian markets posted a stronger performance on easing trade tensions between the US and China. Indonesia and Taiwan gained over 2% while Hong Kong rose 2.3%. South Korea moved 1.2% higher and China advanced 0.9%. Japan declined 0.1%.

“The US-China deal and the recovery of the US markets amid the recovery in the dollar index is likely to restrict the foreign buying, which we saw in the recent sessions,” said Chouhan. At home, the broader markets performed better than the blue chips with the Nifty Mid-cap 150 and the Nifty Small-cap 250 indices advancing 1.3% and 1.4%, respectively. The Nifty Microcap 250 Index gained 1.6%. Out of the 4,125 shares traded on BSE, 2802 advanced, while 1,181 declined.

“The correction has been steeper in the broader markets recently, and this segment didn’t participate in the recent uptrend,” said Pankaj Pandey, head of retail research, ICICI Direct. “The broader market is catching up with the benchmark indices as US-China trade war fears are receding.”

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