A week of positive momentum in both benchmark Sensex and Nifty
Stock markets in India started the week on an upbeat note as stocks edged higher in early trade, boosted by news that the Narendra Modi government won the no-confidence motion in the Lok Sabha on Friday July 20, 2018. Following a 12-hour debate in the Lower House, in a 451-member House, 126 members voted in favour of the motion while 325 votes went against it. Subsequently, market participants gave the equity markets a vote of confidence as well and took to buying equities. The positive momentum was maintained through the week which culminated in the both the benchmark Sensex and the Nifty scaling record highs at the end of the week. However, volatility on account of expiry of current month derivatives contract impacted market movements.
Overseas, both Asian as well as European markets traded higher, giving a further boost to positive domestic sentiment. The gain in Asia was led by Chinese shares as the nation's assets came into focus after the government unveiled a package of measures to boost domestic demand amid simmering trade tensions that threaten to worsen an economic slowdown. Additionally, markets also heaved a sigh of relief at US President Donald Trump and the European Commission chief's plan to ease trade tensions. Positive macro-economic developments from Europe gave a further boost to investor sentiment. The European Central Bank (ECB) left interest rates unchanged and affirmed its plan to end its monthly bond-buying program in December, 2018, as had been expected. In addition, ECB President Mario Draghi said that uncertainty around the inflation outlook was receding.
Gains in the market were further boosted by data showing that FIIs (Foreign Institutional Investors) turned net buyers of equities during the week and bought equities in 3 of the four trading sessions this week. Even though domestic institutional investors (DIIs) have also been net buyers in 3 of the 4 sessions, they sold heavily towards the end of the week. FIIs have net bought Indian equities worth INR 1621.53 crore, since July 23, 2018. DII on the other hand have net sold Indian equities worth INR 1979.8 crore, in the same time period.
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