Indian Stock Indices Defy US Market Downturn with Strong Gains

Indian stock indices soared on Monday, overcoming a sharp overnight US market dip. The surge was driven by robust domestic fundamentals and consistent foreign portfolio investments. Key sectors like banking and FMCG bolstered the indices. Investors remain vigilant ahead of the US elections and Fed rate cut decisions.

Indian stock indices soared on Monday, overcoming a sharp overnight dip in the US markets, showcasing the inherent strength of domestic market fundamentals. Continued buying by foreign portfolio investors (FPIs) played a pivotal role in cushioning the indices from a steep fall.

The Sensex closed at 81,559.54 points, up by 375.61 points or 0.46%, while the Nifty ended at 24,936.40 points, gaining 84.25 points or 0.34%. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that two critical factors— the US presidential elections and the Federal Reserve's decision on interest rates—will heavily influence market behavior.

Vijayakumar advised investors to use market weaknesses to accumulate high-quality large-cap stocks, including defensives like pharmaceuticals. The market will scrutinize both retail and wholesale inflation data closely for further cues. Retail inflation in India significantly softened to 3.54% in July. The Reserve Bank of India has incrementally raised the repo rate by a total of 250 basis points since May 2022 to combat inflation. Ajit Mishra, SVP for Research at Religare Broking Ltd., emphasized the need for balanced risk management given the global market dependencies.

(With inputs from agencies.)