Indian equity markets opened marginally higher on Tuesday, extending gains from the previous session, primarily driven by fresh buying after the recent dip.
At 9.19 am, the Sensex was trading at 72,979.48 points, up 203.34 points or 0.28 percent, while the Nifty was at 22,177.15 points, up 73.10 points or 0.33 percent. All sectoral indices, except for the Nifty Pharma and Nifty Healthcare indices, were in the green at the time of writing.
Over the past week, the indices had witnessed consistent selling, which analysts attributed to a strong US dollar, uncertainty over the outcome of the ongoing Lok Sabha elections amid a decreasing voter turnout trend in phases that have gone to the polls, and profit-booking after the recent rally.
Continued selling by foreign portfolio investors (FPIs) and lower-than-expected earnings from some major corporations also weighed on investor sentiment.
FPIs have turned net sellers in Indian equities recently. After being net buyers for three consecutive months until mid-April, FPIs have cumulatively sold stocks worth Rs 8,671 crore during the remainder of April, data from the National Securities Depository Limited (NSDL) showed. So far in May, they have offloaded equities worth Rs 18,375 crore.
“Under these circumstances, the best option for investors is to wait and watch for a trend change, which can happen anytime. Clarity on election trends is likely to emerge before June 4, the counting day, and the market response can be strong. Buy on dips would be a good strategy now,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
With annual retail inflation easing slightly in April, attention will now shift to wholesale inflation figures scheduled for release later in the day.
(Inputs from ANI)