Sensex, Nifty rebound on easing bond yields, FCNR inflows

Indian markets turn green as Sensex, Nifty rebound on easing bond yields and FCNR inflows

New Delhi, September 3

The BSE SENSEX stood at 76,809.21 points, up by 238.86 points or 0.31 per cent. Similarly, the NSE NIFTY 50 traded higher by 64.40 points or 0.27 per cent at 23,978.85 points. Regional indicators also showed steady movement, with GIFT Nifty standing at 24,072.50 points, up 0.45 per cent.

Explaining the opening trajectory, V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, "The market sentiment is likely to look up today following the slight easing of the US bond yields. A big positive from the rupee perspective is the huge mobilisation of USD 136 billion under concessional swap facility. The USD 127 billion mobilised under the FCNR(B) scheme has come way above the consensus estimates."

Vijayakumar further highlighted the institutional and currency outlook, noting that the implication of this from the market perspective is that the rupee will stabilise, imparting confidence to FIIs. "With improving growth and earnings prospects, FIIs are likely to continue buying in India, despite the elevated US bond yields. Also, the huge FCNR(B) mobilisation by banks will help improve their NIMs. This is positive for banking stocks."

"An interesting feature of yesterday's market decline is that the 141 point dip in Nifty happened despite a Rs 9500 crores of institutional buying, with FIIs buy figure of Rs 6688 crores and DII buy figure of Rs 2812 crores. So, it is obvious that the brunt of the selling came from retail investors, proprietary traders and bears who used the market weakness to hammer the stocks down. This is likely to reverse today," Vijayakumar added.

At the time of reporting, in commodity markets, gold prices held around USD 4,427.09 after gaining 0.90 per cent, while Brent crude traded at USD 95.48 per barrel and Crude oil traded at USD 90.97 per barrel.

Assessing commodity trends, Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, stated, "Gold snapped a three-session decline after President Trump indicated that the latest US military action against Iran would likely be short-lived, reducing fears of a prolonged escalation in the Middle East. The comments cooled oil's recent rally and eased concerns that higher energy costs could feed into broader inflation and force the Federal Reserve to tighten policy more aggressively."

Modi noted that easing private payroll growth alongside statements from New York Fed President John Williams regarding softening inflation helped balance expectations.

"With the Fed meeting approaching, investors will now closely track upcoming US labor-market and inflation data for further direction on rates and bullion," he said.

— ANI