Stock market boom: Rupee strong – Mumbai Samachar
The US firm’s $2 billion investment in Adani’s shares led to a bull run
Nilesh Vaghela
MUMBAI: After a long period of recession, the investors are relieved after a sudden boom in the stock market. As the stock market’s Sensex jumped 1058 points during the session and finally registered a surge of 900 points, investors’ assets totaled Rs. An increase of 3.43 lakh crores has been recorded. While in the foreign exchange market, the rupee has strengthened by 63 paise to 81.97 against the dollar. According to market instruments, the first important reason is the resumption of buying in the Indian stock market by foreign institutional investors (FIIs). According to data received from exchanges, foreign funds in the Indian stock market on Thursday added Rs. 12,770.81 crore was reported. Another immediate reason is the Adani effect. US investment firm GQG Partners’ nearly $2 billion investment in Adani’s shares has boosted sentiment. Following reports that US boutique investment firm GQG Partners Inc has bought $1.87 billion (roughly Rs 15,446 crore) worth of stakes in four Adani group companies.
All Adani stocks rose. Naturally, the benchmark got further support as bank stocks also surged on the back of Adani shares. Apart from this, other reasons include the strengthening of the rupee against the dollar in the foreign exchange market, the decline in US bond yields and the decline in crude oil prices in the international market.
After opening at a high of 59,241.20 points against a previous high of 58,909.35 points at one point, the Sensex surged by 1,058 points during the session to hit a high of 59,967.04 points to end up by 899.62 points or 1.53 per cent. It has also stabilized at 59,808 points.
With this surge, investors’ wealth rose to Rs. A jump of 3.43 lakh crores was recorded. BSE’s market cap is Rs. 263.42 lakh crore was reached. which in the previous session Rs. 259.99 lakh crores. Similarly, NSE’s Nifty index rose by 272.45 points or 1.57 percent to 17,594.35 points.
On the other hand, in the interbank foreign exchange market, the rupee strengthened by 63 paise to 81.97 on a provisional basis.
has reached a one-month high. Forex dealers said that the Indian currency gained strength due to the increase in foreign fund flows along with the improved sentiment in the equity market. Along with this, sentiment was also supported by positive services PMI data.
On the one hand, the country’s growth rate is slowing down, the world economy is reeling from rising inflationary pressures and fears that the Federal Reserve will tighten the whip again, what reason did the stock market find for a jump of almost 1,000? In response to this question, market analysts said that more than one reason had gathered for this.
According to market instruments, the first important reason is the resumption of buying in the Indian stock market by foreign institutional investors (FIIs). According to data received from the exchange, foreign funds in the Indian stock market on Thursday traded Rs. 12,770.81 crore was reported.
Another immediate cause is the Adani effect. US investment firm GQG Partners’ nearly $2 billion investment in Adani’s shares has boosted sentiment. All Adani shares rose after reports that US boutique investment firm GQG Partners Inc has bought $1.87 billion (roughly Rs 15,446 crore) worth of stakes in four Adani group companies.
Naturally, the benchmark got further support as bank stocks also surged on the back of Adani shares. Apart from this, other reasons include the strengthening of the rupee against the dollar in the foreign exchange market, the decline in US bond yields and the decline in crude oil prices in the international market.
While refraining from giving any clear indication about the next move of the market, the experts expressed the view that given the optimism seen in the market, it seems that the market will see a bounce back in the short term. However, there is also concern that global interest rates and higher valuations may increase volatility in the market in the medium term.
Wall Street saw an improvement following comments from Atlanta Federal Reserve President Rafael Bostic. Bostic hinted that the Fed may put interest rate hikes on hold for a while. Indian equity markets followed overnight gains on Wall Street and gains in other Asian stocks. The Dow Jones closed up one percent on Thursday night. A softening was seen in the US Treasury yield.
Adani Group stocks were the top gainers on Dalal Street on Friday with Nifty stock Adani Enterprises closing up 17 percent. Six stocks hit the upper circuit of 5 percent. Bank stocks were the biggest gainers on Dalal Street.
The Nifty Bank index gained more than two percent, while the Nifty PSU Bank index gained 5.4 percent. Chief Investment Strategist of Geojit Financial Services Dr. VK Vijayakumar said the money is to be used mainly to pay down debt, which means banks funding Adani companies will not face any stress.
It is also to be noted that in Thursday’s session too, Adani Port’s shares rose by three percent. The Supreme Court on Thursday constituted a committee of experts headed by retired Justice AM Sapre to probe the Hindenburg-Adani case and asked it to complete the probe in two months. After this news, despite heavy selling pressure in the local stock market, the upper circuit of 5 percent was observed in four companies of the Adani group on Thursday. The stocks of other companies of the group saw a rise of one to five percent.