Stocks climb to fresh records on foreign inflows

Updated on Dec 29, 2020 06:05 AM IST

Global markets cheered the news of a $2.3 trillion stimulus in the US and the historic Brexit trade deal between the UK and European Union.

A pedestrian wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai.(Bloomberg)
A pedestrian wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai.(Bloomberg)
Livemint, Mumbai | ByNasrin Sultana

Indian markets kicked off the last trading week of 2020 on a positive note on Monday, taking a cue from global triggers.

Global markets cheered the news of a $2.3 trillion stimulus in the US and the historic Brexit trade deal between the UK and European Union.

Advances in the rollout of covid-19 vaccines in India also lifted the sentiments of domestic investors. As a result, both the benchmark indices ended at new record highs on Monday: the BSE Sensex closing at 47,353.75, up 380.21 points or 0.81%, while the Nifty ended at 13,873.20, up 123.95 points or 0.90%.

Global shares rose after US President Donald Trump signed a $2.3 trillion spending package and Britain and the European Union clinched a last-minute Brexit trade deal. Trump, by backing down from his earlier threat to block the bipartisan bill, allowed millions of Americans to continue receiving unemployment benefits and averted a federal government shutdown.

Among other Asia Pacific markets, in Japan, the Nikkei gained 0.74% and the Topix index advanced 0.54%, while South Korea’s Kospi closed fractionally higher.

“The advancement of a rollout of covid-19 vaccines in India too uplifted domestic sentiments, leading to positive momentum across all the sectors. We can expect the momentum to be maintained as investors are focusing more on the positive side of these events and are not worried about the peak valuations and lockdowns triggered by the new strain of virus,” said Vinod Nair, Head of Research at Geojit Financial services.

Preparing to enter 2021, the Indian markets are sitting on all-time high, showing resilience on the back of abundant liquidity, positive developments on the vaccine front and signs of an economic recovery.

Foreign institutional investors have invested $22.56 billion in Indian shares in 2020 so far, the highest since 2012. Last year, FIIs were net buyers of Indian equities worth $14.23 billion.

Domestic institutional investors including mutual funds and banks have been net sellers of Indian shares in 2020, for the first time in six years. This year so far, DIIs were net sellers worth Rs 30,724.26 crore while they bought Rs 42,229 crore worth of shares in the previous year.

In December, FIIs were net buyers of domestic shares worth $6.45 billion while DIIs continued to sell for a third consecutive month, dumping equities worth Rs 33,051.41 crore in that month.

“Liquidity rush boosted by low or zero interest rates abroad is driving stock markets across the globe. Absence of negative triggers is resulting in the current upward momentum being continued,” Deepak Jasani, Head of Retail Research, HDFC Securities said.

(Reuters contributed to the story)

Stocks climb to fresh records

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