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Early signs of achche din again in Indian markets

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NEW DELHI: Indian shares have just seen the best week since February 2021 on foreign buying and boost from banks. Foreign funds are showing signs of a return to Indian equities. This is prompted by recent softening of oil prices and the dollar. India’s trend is in sync with major emerging markets.
How much
Foreign investors bought a net over $1 billion of local stocks this week, according to the latest available exchange data compiled by Bloomberg. This is the first weekly net purchase since April.
How it happened
Nine of the ten most valued firms added Rs 2.98 lakh crore to their market valuation last week. Foreign investors purchased over $832 billion worth of Indian equities.
Why it matters
Foreign investors have dumped shares worth about $30 billion this year. A return of foreign funds augurs well for Indian stocks, which anyway have been resilient compared to other emerging markets, some of which have suffered the worst first-half performance in 24 years.
Shares ended on Friday on a seven-week high and recorded their best week in over 18 months, led by a surge in banks. NSE Nifty 50 index closed at 16,719 and BSE Sensex at 56,072 — both hitting their highest since June 3, with a gain of over 4% this week. No wonder Sensex jumped over 2,300 points this week or over 4.25%.
Achche din?
The US Fed may ease its policy tightening spree this week. The dollar index has also softened from its multi-year high. The fears of a major recession in the US have begun to subside.
But the rupee may further depreciate to 82 to a dollar in the near term, economists believe. Last week, the rupee depreciated to a life-time low of 80.06 a dollar.

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