Sensex rises 400 points to 77,251 as FII buying offsets mixed global cues
Synopsis
Key Takeaways
Indian equity benchmarks climbed sharply in early trade on Wednesday, 4 November, with the BSE Sensex rising nearly 400 points or 0.5% to 77,251 and the Nifty50 gaining 101.65 points or 0.43% to 23,912.50, even as Asian markets faced pressure from technology stocks over concerns about artificial intelligence spending. The rebound came despite a weak opening — the Sensex had started the session at 76,853.11, down 64.74 points, while the Nifty began at 23,742.25, off 68.60 points.
FII Buying Drives the Mood Shift
Market analysts pointed to a decisive change in sentiment, attributing the turnaround to a sustained reversal in the stance of foreign institutional investors (FIIs). FIIs have been net buyers in five out of the last six trading sessions, purchasing stocks worth ₹18,661 crore during that period. On Tuesday alone, FIIs recorded net purchases of ₹6,836 crore, marking their third straight session of strengthened buying.
'Sustained selling by FIIs had been weighing on the market for the last two years. This is changing now. Buying volume is increasing. Good corporate earnings and attractive valuations in large-caps are providing fundamental support to the rally. Weakening of the AI trade also facilitated the return of FIIs,' market experts said.
In contrast, domestic institutional investors (DIIs) extended their selling streak to a third consecutive session on Tuesday, posting net outflows of ₹3,678 crore.
Sectoral Performance: Healthcare Leads, IT and Realty Lag
Sectoral indices presented a mixed picture in early deals. Nifty Consumer Durables, Nifty Realty, and Nifty IT declined by up to 0.79%, with metal, energy, private bank, and PSU bank indices also trading in negative territory. On the other hand, Nifty 500 Healthcare, the Nifty Healthcare Index, and Nifty Pharma showed resilience, rising up to 0.23%.
Analysts noted the rally is likely to be led by large-cap shares with potential to attract significant FII flows, and could sustain on short-covering, with leading financial stocks seen as having more room to move higher.
Technical Outlook: Momentum Intact but Resistance Looms
From a technical standpoint, the Nifty50 continued to hold above its 50-day Exponential Moving Average (EMA) near 23,196, with the Relative Strength Index (RSI) at 66.59, signalling strong bullish momentum — though experts cautioned that profit booking cannot be ruled out at higher levels. The Put-Call Ratio (PCR) improved to 1.30. Immediate support is seen at the 23,500–23,600 band, while resistance lies at 24,000–24,200; the 200-day EMA near 23,904 acts as an intermediate hurdle.
Global Cues: US Markets Close Higher Ahead of Midterm Results
Overnight, US markets ended on a positive note, led by the Nasdaq, as AI-related heavyweights rebounded ahead of US midterm results. However, Apple bucked the trend, falling after reporting disappointing earnings. Asian markets remained under pressure from technology stocks, keeping overall global cues mixed for Indian traders.
With FII flows firming and large-cap valuations seen as supportive, sustained follow-through buying in the coming sessions will be the key test for the market's ability to consolidate above the 24,000 mark.