Nifty reclaims 18,000-mark as investors add risk

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The Nifty reclaimed the 18,000 peak on Tuesday, closing above the mark for the first time since April, as stocks rallied for the fourth straight session.

Shrugging off concerns on inflation accelerating higher-than-expected to 7% in August and industrial output in July rising a slower-than-expected 2.4%, investors added risk sending the benchmark gauge up 133.70 points or 0.75% to settle at 18,070.05 points.

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In Asia, the Shanghai Composite Index gained nearly 0.1%, Japan’s Nikkei 225 advanced 0.3% and South Korea’s key Kospi index jumped 2.7%. However, Hong Kong’s benchmark Hang Seng index declined 0.2%.

Foreign portfolio investors (FPI) have been bullish on Indian equities in the past four weeks and continued to be buyers. FPIs invested `2,049.65 crore into domestic equities on Monday, according to data available on BSE. They have shopped for equities worth $8 billion since July, aided by a correction in commodity prices and India’s relatively strong macro fundamentals.India’s relative outperformance vis a vis other emerging markets has gained traction in recent weeks and the outperformance is now highest since the 1999-2000 period, according to Elara Capital. The benchmark 50-share Nifty is trading at a valuation of 19x its 12-month forward P/E as on September 7.

“India’s sustained growth momentum and the relatively benign inflation in the context of continued global disarray on account of tensions in Ukraine and the Taiwan straits, has attracted FPIs back to Indian equities,” said UR Bhat, director, Alphaniti Fintech.India is seen as the favourite among emerging markets because of the relative resilience of the rupee and forex reserves, as also relatively low levels of external debt, current account and fiscal deficits.The country’s weighting in the widely tracked MSCI EM index has shot up to about 14.49% now from 8.1% at the end of October 2020. The number of constituents in the MSCI EM Standard Index is now at 108 stocks versus 87 as of October 2020.Among the Sensex shares, Bajaj Finserve, IndusInd Bank, Bharti Airtel, Titan and Bajaj Finance were the main gainers. HDFC Bank, HDFC, Power Grid, L&T, ITC, Reliance, SBI and Infosys also closed in the positive territory.

TCS was the biggest loser among the Sensex pack, declining 0.37%.

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In the broader market, BSE MidCap advanced 0.32% to 26,252.08 points while BSE SmallCap gained 0.24% to 29,893.97 points.

Among the sectoral indices, FMCG rose 0.77%, Finance went up 0.85%, both Industrials and Metals gained 0.74%, Capital Goods went up 0.69% and Consumer Durables increased 0.66%.

On the other hand, Energy, Oil & Gas and Realty indices closed with losses. Brent crude rose to $95.15 per barrel in London. Gains in global equities also supported the local markets.