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Sensex, Nifty gain for fourth session in a row; FPIs continue to buy

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The benchmark indices gained for the fourth consecutive session on Monday amidst buying interest in heavyweights and hopes that the pace of monetary tightening may slow down. The benchmark Sensex gained 545 points, or 0.95 per cent to close at 58,115, highest close since April 13. The Nifty rose 182 points, or 1.06 per cent, to finish at 17,340, highest lelvel since April 21. From the June lows, both indices have now bounced more than 13 per cent.

The recent gains have been fuelled by a revival in foreign portfolio investor (FPI) flows, easing commodity prices, attractive valuations, and hopes that the Federal Reserve may go soft on its interest rate hikes.

The FPIs became net buyers in July after being sellers since October 2022. On Monday, the FPIs bought shares worth Rs 2,320 crore, according to provisional figures from exchanges. The ease in crude prices gave some comfort on the inflation front as Brent crude rose marginally on Monday, but is still trading at 11 per cent lower than its levels in early July.

India’s purchasing managers index (PMI), which hit an eight-month high, cheered sentiments. The PMI for July was at 56.4 against 53.9 in the previous month. A level above 50 separates growth from contraction.

“In the near term, the market would closely track the Reserve Bank of India and Bank of England monetary policy meeting and the US non-farm jobless data. The overall market trend is positive with strong action in midcaps,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services.

Apart from monetary policy, markets will continue to take cues from ongoing earnings, said experts. “We would advise investors to focus on maintaining a stock-specific approach,” said Ajit Mishra, VP of research, Religare Broking.

The market breadth was strong, with 2,277 stocks advancing and 1,193 declining. Four-fifths of the Sensex stocks gained. Reliance Industries rose 2.6 per cent and was the best performing index stock. Power stocks gained the most, and its sectoral index on BSE rose 3.4 per cent.

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