Market Overview

Asian markets traded on a mixed note: What should you do?

Asian markets traded on a mixed note

Indian equity benchmarks extended rally seen in previous week and they added a percent as Nifty50 index touched fresh record high of ~22,297.50 during the week ended February 23. Movements were supported by healthy macro data and help from global markets. Indian benchmark indices ignored higher crude oil prices and the US bond yields. 

Since Asian markets traded on a mixed note, during the week gone by, BSE Sensex inched closer to record high level of ~73,427.59 levels and ended 716.16 points or ~1% higher at ~73,142.8. Nifty50 index saw an increase of ~172 points or 0.78 percent to close at ~22,212.70 levels. 

BSE Large-cap Index added ~1% over the previous week helped by One 97 Communications (Paytm), ABB India, Adani Wilmar, Bharat Electronics, etc. However, there were certain losers too as Hero MotoCorp, Coal India, Indian Oil Corporation, etc. closed lower. 

But what views FIIs and DIIs have for Asian equities? In India, Foreign institutional investors (FIIs) remained seller for the week gone by, with these investors selling equities worth INR 1,939.40 crore. However, DIIs purchased equities for the consideration of INR 3532.82 crore in the previous week. 

However, for February month till now, FIIs have unloaded equities worth INR 15,857.29 crore, while DIIs purchased equities worth INR 20,925.83 crore. 

Talking about sectoral performance, BSE Realty index saw an increase of ~4%, BSE Telecom index added ~3.8%, BSE FMCG and Power indices increased by ~1.5% each. Conversely, BSE Oil & Gas index fell by 2% and BSE Information Technology index fell ~1% each. 

As Asian markets traded on a mixed note, these stocks gained for 2nd day on Friday, supported by strong and healthy global rally in equities. The US to Europe markets and Japanese markets touched all-time highs. 

Talking about the performance on Friday, shares in mainland China saw some fluctuations, with Hong Kong’s Hang Seng Index declining from the rise seen earlier. Australian and South Korean equities both saw an increase. Japanese markets remained closed on Friday due to public holiday. 

The bullish mood was built as gains were seen in the US, with S&P 500 and Nasdaq 100 indices ending at new records. Treasury 10-year yields remained moderately changed at ~4.32% on Thursday. 

On the commodities front, gold prices on Friday saw a fall of INR 2 to INR 61,975 per 10 grams in futures trade, with speculators reducing their positions. On MCX, gold contracts for April delivery were trading lower by INR 2 and were almost flat at INR 61,975 per 10 grams in turnover of 13,273 lots.

There are global experts and analysts believing that Indian market is expensive, mainly from mid-cap standpoint. Nifty MidCap 100 Index continues to trade at ~25.9x one-year forward earnings against ~20.2x for Nifty index. 

We believe that our readers need to focus on valuations in context of growth acceleration due to developing capex cycle and commitment to Indian government-funded capital expenditure. 

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