Indian stocks extend losses on continued profit booking
Jul 21, 2023
New Delhi [India], July 21 : Indian stock indices extended their losses from the previous session and traded deep in the red Friday morning, primarily due to continued profit booking after the latest bull run — the indices had touched all-time highs earlier this week.
Several analysts had been pointing out that any further rally from the current peak seems unlikely as valuations were higher, and that is what seems to have been happening in the past two sessions.
Benchmark indices Sensex and Nifty were 1 per cent lower each at the time of writing this report. Barring two-to-three Nifty sectoral indices, all others declined today. Nifty consumer durables, Nifty oil and gas, and Nifty IT dipped the most.
In the past one-month, the indices — Sensex and Nifty — had cumulatively gained about 6 percentage points.
The consistent inflow of foreign portfolio funds, firm economic outlook, firm global markets, and a relative moderation in inflation contributed to the latest bull run in Indian stocks.
Foreign portfolio investors (FPIs) have remained net buyers in Indian stock markets for the fifth straight month, according to data from the National Securities Depository (NSDL).
FPIs bought Indian stocks worth Rs 7,936 crore, Rs 11,631 crore, Rs 43,838 crore, and Rs 47,148 crore in March, April, May, and June, respectively. The trend is also firm in July as they bought about Rs 37,000 crore worth of equities.
“At high valuations, some negative trigger can lead to sharp correction. But in the near-term the party may continue,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
