Indian markets are defying weak global cues and cruising along on November 6. What explains this massive divergence?
One analyst said the tech rout will be beneficial for India, which could be visible from the 1% gain in Nifty IT index on November 6.
"The blood bath in the US markets will impact most other markets today, but India is likely to be the least impacted. The big rout of 5.6% in Nasdaq was triggered on concerns of big slowdown in data centre spending since the Democrats are opposed to massive data centre investment. This tech rout, particularly the sharp deceleration in AI trade will turn out to be beneficial for India. It is important to note that the FIIs have bought equities for Rs 35,781 crore in the last five trading days. Despite selling and profit booking by DIIs the market is likely to remain resilient since FII buying will continue in the changed global market construct," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
"It is important to recognise the fact that this ongoing rally has fundamental support from impressive earnings growth which has come better-than-expected. A significant factor which investors should understand is that this rally is driven by large-caps which had become attractively valued. Note that yesterday while the Sensex rallied 2.6%, the Smallcap 100 index crawled by a measly 0.67%. It is evident where money is going. For financials, tech and auto stocks there is more upside," he added.
At 9:57 am on November 6, the Sensex was up 523.66 points or 0.66% at 79,833.67, and the Nifty was up 101.60 points or 0.41% at 24,638.20. About 1,165 shares advanced, 2,201 shares declined, and 162 shares were unchanged.