Selling by FIIs, a reduction in domestic buying are key reasons for the current correction, says an analyst
Selling by FIIs, a reduction in domestic buying are key reasons for the current correction, says an analyst
Equity markets witnessed a rebound on Thursday, backed by gains in banking stocks after three days of decline following global trends.
The S&P BSE Sensex gained 503.27 points, or 0.94%, to 54,252.53 points. The top gainers in the index pack include Tata Steel (5.27%), State Bank of India (3.26%), HDFC Bank (2.96%), Axis Bank (2.82%), Nestle (2.28%) and HDFC (2.28%).
The NSE Nifty-50 index too gained 144.35 points, or 0.90%, to 16,170.15.
“After the heavy sell-off, the market showed signs of exhaustion and could bounce for the short to medium-term,” said Vinod Nair, head of Research, Geojit Financial Services.
“Technically, the broad market is in the oversold territory and fundamentally valuations are just below the three-year average. A key reason for the current correction is selling by FIIs and a reduction in domestic buying. A drop in FII selling will be an important reason for the bounce,” he said.
”For this, the actions to be undertaken by the Fed and the RBI in June will be an important factor. Moreover, we should note that the fiscal measures announced by the Indian government to control inflation is positive for the domestic market,” he added.
