MUMBAI: Sensex and Nifty rallied sharply on Thursday even as most Asian markets were deep in the red as investors said that India’s relatively lower valuation compared to its global peers could bring foreign funds back into the domestic market.The gains came despite strong foreign fund selling but aided by some end-of-the-session short covering by speculators who wanted to cut their losses, market players said. A steady rupee and marginal softening of crude prices also helped the rally.
With bulls on Dalal Street in charge of the day’s session, sensex closed 1,534 points or 2.1% up at 74,316 points while Nifty was up 375 points or 1.7% at 22,997 points. In comparison, Kospi in South Korea was down 8%, Nikkei in Japan closed 4.9% down, while Shanghai Composite closed 1.6% down.According to Vinod Nair, head of research, Geojit Investments, Indian markets rallied sharply as concerns over stretched AI valuations and higher US inflation triggered a sell-off across tech-heavy global markets, improving India’s relative appeal and encouraging rotation toward domestic large-cap technology, private financials and defensive heavyweights.“Correcting bond yields, rupee stability and softening crude prices further supported sentiment, while hope of possible reconsideration of equity taxation added to risk appetite.” The near-term sustainability of the rally would now depend on corporate earnings for the July-Sept quarter, and evidence of return of foreign funds, Nair said.During the day’s session, foreign funds emerged net sellers at Rs 5,285 crore, while domestic funds were net buyers at Rs 3,319 crore, BSE data showed. Private banks and IT stocks gained most.
