Benchmark equity indices surged to yet another record on Wednesday, driven by persistent gains in banking and capital goods shares. Revival in buying by foreign institutional investors further strengthened sentiment on the final day of the derivatives futures & options (F&O) expiry for April series.
Touching new highs for the third straight session, the Sensex advanced 0.5%, or 118.17 points, to end at 22,876.54. The Nifty rose 25.45 points, or 0.37%, to settle at 6,840.80 as rollover activity in the F&O segment remained in line with the previous expiry. The marketwide rollover stood at 72%. However, the Nifty rollover was 59%, slightly lower than the average 65% seen in the past few F&O expiries.
FIIs continued to be net buyers of Indian shares for the fourth consecutive session on Wednesday, taking the cumulative inflows to $5 billion for the current calendar year. Overseas funds net bought $126 million worth of shares in the cash segment, showed provisional data from stock exchanges.
The tally stands at $912 million so far this April with four sessions remaining. Even as their year-to-date purchases touched $5 billion mark, foreign buyers seem to have tempered their expectations somewhat; the five-day moving average of purchases of $200 million plus seen in most of March has dropped to a shade below $50 million.
FIIs, who have been betting heavily on BJP's Narendra Modi to lead the next government at the Centre, have been net buyers based on the outcome of recent opinion polls and driven the markets to record highs.
“Rollover in April series was in line with previous expiry... momentum remains strong,” said Yogesh Radke, head of quantitative research, Edelweiss Capital.
India now features among the top five performing market in the emerging as well as the developed nations. Nifty has gained nearly 9.88% (in dollar terms) since the beginning of the current calendar year behind Indonesia (19.8%), Italy (15.8%), and Thailand (10.8%), Bloomberg data shows.
Market experts said Nifty ended the April expiry on a positive note and the view remains bullish. It is crucial for the Nifty to close the month above 6,835, which directly opens 7,400 levels in the near term.
“The Nifty continues to maintain the positive trend in the near term as long as it maintains the lower band of the channel. The near- term support is at 6,700 and below that 6,640,” said Standard Chartered Securities in its research note.
The trend in broader markets was strong