Equities climb to fresh records on foreign inflows1 min read . Updated: 29 Dec 2020, 05:32 AM IST
- Global markets cheered the news of a $2.3 trillion stimulus in the US and the historic Brexit trade deal between the UK and European Union
Indian markets kicked off the last trading week of 2020 on a positive note on Monday, taking a cue from global triggers.
Global markets cheered the news of a $2.3 trillion stimulus in the US and the historic Brexit trade deal between the UK and European Union.
Advances in the rollout of covid vaccines in India also lifted sentiments. As a result, both the benchmark indices scaled record highs, with the BSE Sensex closing at 47,353.75, up 380.21 points or 0.81%, and the Nifty at 13,873.20, up 123.95 points or 0.90%.
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Global shares got a boost from a $2.3 trillion spending package signed by US President Donald Trump, who backed down from his earlier threat to block the bipartisan bill that will allow millions of Americans to continue receiving unemployment benefits and averted a federal government shutdown. Meanwhile, Britain and the EU clinched a last-minute Brexit trade deal.
Among Asia-Pacific markets, in Japan, the Nikkei gained 0.74% and the Topix index advanced 0.54%, while South Korea’s Kospi closed fractionally higher. “The advancement of a rollout of covid vaccines in India lifted domestic sentiments, leading to positive momentum across sectors. We can expect the momentum to be maintained," said Vinod Nair, head of research at Geojit Financial Services.
Indian markets are showing resilience on the back of abundant liquidity, positive developments on vaccines and signs of an economic recovery.
Foreign institutional investors have invested $22.56 billion in Indian shares in 2020 so far, the most since 2012. Last year, FIIs were net buyers of Indian equities worth $14.23 billion.
Domestic institutional investors have been net sellers in 2020, for the first time in six years.
In December, FIIs were net buyers of domestic shares worth $6.45 billion while DIIs continued to sell for a third month, dumping equities worth ₹33,051.41 crore.
“Liquidity rush boosted by low or zero interest rates abroad is driving stock markets across the globe. Absence of negative triggers is resulting in the current upward," Deepak Jasani, Head of Retail Research, HDFC Securities said.
Reuters contributed to the story.
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