Sensex, Nifty soar to a two-month high as FPIs ramp up buying activity

Mumbai: Indian benchmark indices Sensex and Nifty rose for a fourth consecutive session, closing at their highest levels in nearly two months, as foreign investor buying, improving corporate earnings and attractive valuations lifted sentiment.

The Sensex settled at 76,917.85, up 1.6%, or 1,226 points, from its previous close. The index closed at a level last seen on September 1. The Nifty 50 gained 1.6%, or 371 points, to 23,811, its highest close since September 4. Over the past four sessions, both benchmark indices have gained around 5%.

Concerns over the durability of the AI trade could have prompted some foreign investors to diversify into assets and markets such as Indian stocks, considered less vulnerable to any volatility triggered by AI unwinding. "Some global investors could also be diversifying away from large artificial intelligence-related investments following volatility in technology stocks. At the same time, the recent market correction has made Indian equities more attractive," said Utsav Verma, head of research, institutional equities, Choice Equity Broking. "There is also greater comfort on the rupee, with expectations of sharp depreciation having eased."


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Foreign Portfolio Investors net bought ₹6,837 crore in Indian equities on Tuesday, while DII sold ₹3,679 crore, according to provisional data of NSE. In the past 11 sessions, these investors have made net purchases to the tune of ₹25,400 crore, according to NSDL data.

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HDFC Bank contributed the most to the Nifty's gains, rising 2.9%. Of the 50 stocks in the index, 36 advanced and 14 declined. ICICI Bank and Axis Bank were among the other major gainers.

Experts said expectations of moderating crude oil prices, which dropped over 10% in the last two sessions to $105 a barrel from an earlier high of $115, have also contributed to the improvement in sentiment. However, they cautioned that the recent rally may not translate into a sustained breakout unless crude prices stabilise and India's macroeconomic outlook improves.