Bullish Momentum Extends in Indian Markets Amid MSCI Rebalancing

The Indian stock market sustained its upward momentum on Tuesday due to strong buying sentiments, marking the third consecutive session of gains. The surge was influenced by MSCI rebalancing and increased foreign investor activity. Key sectors like financial services saw notable activity with prominent banks showing resilience.

The Indian stock markets continued to exhibit a bullish trend on Tuesday, marking the third straight session of robust buying sentiments. The Nifty 50 index opened with a gain of 121.40 points, or 0.5%, at 24,343.30, while the BSE Sensex index rose by 0.38%, adding 305 points to start at 80,415.47 points.

Market experts observed that despite the upward trend, selling pressure lingers as recent Foreign Institutional Investor (FII) activity was largely linked to MSCI rebalancing, which increased HDFC Bank's weightage. Data from the National Stock Exchange (NSE) showed FIIs purchasing equities worth Rs 9,947 crore on Monday, contrasted by Domestic Institutional Investors (DIIs) selling equities worth Rs 6,907 crore. Regular MSCI rebalancing ensures accurate and effective market benchmarks by adjusting index listings.

Chief Investment Strategist at Geojit Financial Services, V K Vijayakumar, expressed skepticism regarding the rally's sustainability due to ongoing earnings concerns and external factors, including U.S. political moves. He emphasized that while bank valuations remain reasonable, FIIs' recent buying activity should not be overly interpreted as long-term interest.

In sectoral performances, Nifty Financial Services led gains with a 0.71% rise. Nifty Bank and Nifty Auto indices also saw positive movements. At the report's filing, 37 Nifty 50 stocks opened with gains, while six declined and seven remained unchanged. Top gainers included Bharti Airtel, Infosys, and ITC, while ONGC, Adani Ports, and L&T were among the decliners.

Axis Securities's Head of Research, Akshay Chinchalkar, noted the significance of recent market moves, highlighting critical support and resistance levels on the Nifty index. In contrast to India, other major Asian markets faced selling pressure on Tuesday following a strong Monday, with indices in Japan, Taiwan, and South Korea experiencing declines, though Hong Kong's market rose modestly by 0.37%.

(With inputs from agencies.)