Today, Nifty boomed past the 13,000 mark for the very first time while Sensex shattered a record and reached 44.422 mark. The boom has been credited to a boost in economic recovery post the COVID-19 slump, also fuelled by quicker COVID-19 vaccine hope and the FIIs turning more cash positive in India.
FII bought in 4,738 crore capital in the cash market on Monday and invested 50,989 crore rupees in November. The cash purchase in November crossed the 50,000 mark making it the highest ever investment. From January to October, FIIs net sold 48,295 crore rupees in the cash market.
Experts had predicted huge cash inflow from FIIs as they set on buying spree earlier. Morgan Stanley Capital Investment (MSCI), a leading provider of research-based indexes and analytics, will manipulate the foreign ownership limits for India stocks in its global indexes from December 1, a move that could see passive inflows of $2.5 billion into the country. While MSCI weight remains a key factor, strong September quarter earnings, progressing macroeconomic factors and a struggling of dollar index also inviting FII inflow into the Indian market may sustain.
Further volatility in the US market is expected and more correction in the dollar index if Joe Biden becomes the President of the US. India has displayed a speedier recovery from the pandemic and the mortality rate in the country remained low and the recovery rates were high, further making it shine among the other countries. Rusmik Oza, Senior VP (Head of Fundamental Research) at Kotak Securities also mentioned that the Indian Economy faltered initially bur is up on its legs and speeding fast without any large stimulus, which has further instilled confidence in foreign investors.
Chandan Taparia, VP – Derivatives & Technical Research, Motilal Oswal Financial Services has estimated the following stocks to benefit the most from the growing FII inflow. They are Kotak Bank, Bajaj Finance, Asian Paints, Nestle India, MRF, Ashok Leyland, Muthoot Finance, ACC, IPCA Labs, L&T Infotech, SBI Card, Cadila, L&T and Britannia as they are expected large amounts to flow in soon.