On March 21, 2023, the Indian stock market experienced a notable surge, with both the Sensex and Nifty indices rising by nearly 1%. This marks the fifth consecutive day of gains, driven by a resurgence of foreign investments and a rally in banking stocks. The BSE Sensex rose by 557.45 points, or 0.73%, closing at 76,905.51. During the trading session, it even reached a high of 77,041.94, an increase of 693.88 points or 0.90%. Simultaneously, the NSE Nifty climbed 159.75 points, translating to a 0.69% increase, ultimately settling at 23,350.40.

Positive Market Sentiment Fueled by Foreign Investment

Market analysts attribute this positive momentum to recent comments from the U.S. Federal Reserve, which hinted at the possibility of two interest rate cuts within the year. This development has sparked renewed enthusiasm within the Indian market. Notable gainers in the Sensex included NTPC, Bajaj Finance, Kotak Mahindra Bank, Axis Bank, Nestle, Larsen & Toubro, Tata Motors, ICICI Bank, Power Grid, and Zomato.

In contrast, stocks such as Infosys, Tata Steel, Mahindra & Mahindra, Titan, and Bajaj Finserv lagged behind, indicating a mixed performance across sectors.

Surge in Foreign Institutional Investment

According to exchange data, foreign institutional investors (FIIs) were active buyers, purchasing equities worth ₹3,239.14 crore just the day before. Vinod Nair, Head of Research at Geojit Financial Services, commented, "The domestic market is seeing consistent recovery, aided by expectations of reduced risk-free rates and a softer dollar index, which is attracting funds back to emerging markets. The trend of FII selling seems to be reversing, as they become net buyers due to the dovish signals from the U.S. Fed."

Regional Market Overview

In broader market trends, Asian markets showed mixed results, with Seoul finishing positively while Tokyo, Shanghai, and Hong Kong closed lower. Meanwhile, European markets were trading in the red, and U.S. markets ended marginally down on Thursday.

• Global oil prices also saw a slight decline, with Brent crude slipping 0.21% to USD 71.85 per barrel.

The recent surge in the market is a promising indicator of investor confidence, as the BSE benchmark previously gained 899.01 points or 1.19%, reclaiming the 76,000 level. Similarly, the Nifty experienced a rise of 283.05 points or 1.24%, surpassing the 23,000 mark.

Conclusion

As the market continues to respond positively to foreign inflows and favorable economic indicators, investors remain hopeful about sustained growth in the upcoming weeks. Keep an eye on developments from the U.S. Fed and their potential impact on Indian stocks.