Foreign Institutional Investors (FIIs) who were net sellers before the Budget 2021 were introduced, causing the Sensex to fall in the week before the Budget, while FIIs have now become net buyers. FIIs have poured more than Rs 19,000 crore into the cash segment of the Indian equity market so far in February, due to which the BSE Sensex today crossed the 52,000 mark. The NSE Nifty also crossed the 15,300 marks. The Sensex was trading 1.12% or 577.90 points higher at 52,122.20 in the afternoon. At the same time, the Nifty was up 0.98% or 148.95 points at 15,312.25 points.
Today the Sensex opened at a high of 51,907 points and reached the highest level of 52,177.50 points. The increase in capital expenditure for healthcare and infrastructure in Budget 2021 made India attractive to investors who want to invest in growth. Ranganathan, head of research, LKP Securities, told Moneycontrol that the proposed reforms to protect the interests of investors in the budget have made it possible that FIIs have invested more than Rs 39,000 crore in the equity market in the year 2021. He said that most of the FII investments came in private banks, FMCG, consumer and IT sectors.
India will remain an attractive market
Market experts have hoped that due to the government’s commitment to the privatization of PSUs, the inflow of foreign capital into the Indian market will continue even in the last quarter of this financial year. Let me tell you that in January FIIs had withdrawn Rs 9000 crore from Indian markets. But due to the weakening of the dollar, India has become an attractive market for foreign players. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services told Moneycontrol that foreign investors are confident that India will emerge as the fastest-growing economy in the world after Kovid. Due to this, the flow of foreign capital in India will increase further.
Sectoral rotation happening
VK Vijaykumar told Moneycontrol that there is sectoral rotation happening in the stock market right now. Pharma was the preferred sector of investors in 2020 and the pharma sector performed well, while the banking sector remained an underperformer due to fear of rising NPA. But now in 2021, investors have turned to the banking sector. At the same time, the IT sector still remains the most preferred choice of investors.