Sensex rose 156.65 points to 81,206.65 in early trade; Nifty rose 37.70 points to 24,833.45.
Earlier, selling pressure continued in Indian stock markets on Tuesday, following similar trends in Asian markets. Nifty and Sensex showed mixed openings, with the Nifty 50 index registering a marginal gain of 36 points or 0.15 per cent, opening at 24,832.20 points, while the Sensex index opened at 80,826.56 points, registering a fall of 223 .44 points or 0.28 percent.
Experts noted that geopolitical pressure and the continued shift of foreign investment from India to China have added to the selling pressure on Indian stocks.
“The market has weakened in response to negative signals from escalating geopolitical tensions in the Middle East, FPI sell-offs and concerns surrounding election results due to be released today. The most important trigger that made the Nifty falling 5.6 per cent from its peak has been the sustained big rise FPI Sales over the last six trading days,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
In sectoral indices, Nifty Private Bank led the gains with a rise of 0.55 per cent in the opening session, and Nifty Bank also rose 0.5 per cent, while Nifty FMCG, Nifty Media and Nifty Metal faced pressure selling.
Among Nifty 50 stocks, 20 opened higher, 26 fell and 4 remained unchanged.
Foreign portfolio investors (FPIs) have sold shares worth Rs 50,011 crore over the last six trading sessions, which has been more than offset by domestic institutional investors (DIIs) who bought Rs 53,203 crore. Despite this, the market has corrected 5.6 percent due to weak sentiments.
Experts also pointed out that there are enough indicators to suggest that FPIs have been following a ‘sell India, buy China’ strategy. Elevated valuations in India and cheaper valuations of Chinese stocks have triggered this shift in FPI’s strategy.
“The Nifty index closed on Monday at the crucial support level of 24,800, with momentum indicators in oversold territory, which may trigger a temporary bounce. However, a weekly close below 24,800 could lead to further declines, potentially up to 24,000,” said Varun Aggarwal, MD, Benefit Idea.
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