Indian equities extended their winning streak for a fourth consecutive session on June 17, with the Sensex closing up 347.14 points or 0.45% at 77,155.62 and the Nifty gaining 96.55 points or 0.40% at 24,085.70. The positive momentum was driven by a framework for an Iran-US deal and a significant drop in oil prices below $80 per barrel, as reported by The Economic Times. Foreign Institutional Investors (FIIs) turned net buyers on June 17, purchasing equities worth over ₹100 crore, while Domestic Institutional Investors (DIIs) remained net buyers and extended their support to the market by purchasing equities worth ₹1,561 crore during the session. As per The Economic Times, FIIs were net sellers of shares worth ₹749.18 crore on June 16, while DIIs were the net buyers of shares worth ₹0.06 crore.
Polycab India gained up to 4% after Jefferies raised its target price to ₹10,920 and reiterated its Buy rating, citing market share gains, data centre opportunities, a healthy order pipeline, diversified revenue streams and strong earnings growth expectations despite the stock's sharp rally this year. Vedanta Iron and Steel shares are on a strong rally, hitting the upper circuit for a third day following an investment by Premji Invest. In contrast, Vedanta Aluminium shares hit the 5% lower circuit for a third straight session, extending their post-listing decline to 14% since debuting at ₹522 per share on Monday. The stock has shed over ₹29,000 crore in market value, with its market capitalisation falling from more than ₹2 lakh crore to around ₹1.75 lakh crore. Vedanta Power shares rebounded after two days of declines following their stock market debut post the Vedanta demerger, crossing its listing price amid investor interest.
Foreign Portfolio Investors (FPIs) were net sellers of shares worth ₹63,450 crore in the first fortnight of June, with heavy selling concentrated in specific sectors. According to Business Standard, IT stocks recorded net selling of ₹6,733 crore, while fast-moving consumer goods (FMCG) stocks saw net selling of ₹5,063 crore. The selling in the oil and gas sector was attributed to volatility in oil prices, with auto stocks affected by concerns that elevated crude prices could dampen consumer sentiment and moderate vehicle demand. Market experts noted that with crude prices correcting, these sectors may ease, creating room for investors to revisit them. Information technology stocks have remained under pressure due to fears of artificial intelligence disruption, over uncertainties about traditional outsourcing models and future earnings visibility. FMCG stocks have been affected by concerns over the monsoon, as rural demand is a significant driver of FMCG sales, with delay in monsoon progress and widening rainfall deficit raising worries about farm incomes and discretionary spending in rural India.
Asian markets opened with a cautious bias on Wednesday amid easing tension in the Middle East, while traders await the US Fed's interest rate decision. According to The Economic Times, Kospi dropped 1.02% at the open, while Japan's Nikkei 225 slipped 0.20% and Hong Kong Hang Seng index futures were last at 24,510, higher than the index's prior close of 24,493.95. The US Dollar Index (DXY) was trading 0.07% lower at 99.50, while the rupee appreciated 0.17% to close at 94.56 to the dollar on June 16. US equities faced pressure with the Dow Jones Industrial Average advancing 328.64 points or 0.64% for a record close of 51,999.67, while the S&P 500 fell 0.57% to 7,511.35 and the Nasdaq Composite pulled back 1.15% to 26,376.34.
The GIFT Nifty traded higher around 24,092.50 in early deals, indicating a strong start for the benchmark indices. Despite heavy FPI selling, financial services stocks had the highest FPI allocation at 30.27 per cent, followed by automobile stocks at 7.52 per cent and capital goods stocks at 7.47 per cent. Analysts anticipate continued market resilience, supported by tapering FII outflows and a strengthening rupee, despite concerns over monsoon deficits. Dr. VK Vijayakumar from Geojit Investments noted that Brent crude has declined steeply by around 16% in the last 5 days to about $79, removing the major macro concern of a rising BoP deficit in India. He added that the sharp correction in Brent crude to $79 and expectations surrounding massive capital flows to India via the FCNR B deposit route can lead to further rupee appreciation, which may dissuade FIIs from selling and turn them into buyers.
