NEW DELHI: After six consecutive sessions of the rally, Indian stock indices took a breather on Monday morning.
It traded marginally low in early trade largely due to profit booking. At 9.42 a.m., Sensex traded at 55,827.45 points, down 244.78 points or 0.44 per cent, whereas Nifty traded at16,653.10 points, down 66.35 points or 0.40 per cent.
Indian equity markets recorded their best weekly performance during the past week, supported by renewed buying, especially in banking and IT stocks as well as the return of foreign investments into the Indian markets after months.
The latest consistent rally in Indian stocks has made investors richer by over Rs 9 trillion in the week that ended on Friday.
The all-India market capitalization rose from Rs 25,190,063.14 crore on July 15 to Rs 26,106,487.37 on Friday, Bombay Stock Exchange data showed.
The domestic equity market closed at its highest level in seven weeks, marking its best week since February 2021. Sensex and Nifty during the week rose around 3-4 per cent on a cumulative basis.
"Market action this week will be in response to the results declared after market closure last Friday and in anticipation of the major results expected this week.
RIL's results, though impressive on the telecom and retail front, fell slightly below expectations in the refining space," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The US Fed's monetary policy meeting outcome to be released later this week will be another key focus for investors.
"The Fed's rate announcement on 27th July is not likely to impact the market much since a 75 bp rate hike is already known and discounted by the market. The market will be keenly watching the Fed commentary for near-term triggers," Vijayakumar said.
The silver lining in the markets is that foreign investors have again turned net buyers in July after multiple months of fund outflows.
Foreign Portfolio Investors (FPIs) had been selling equities in the Indian markets for the past nine-to-ten months barring the latest buying due to various reasons, including tightening of monetary policy in advanced economies, and rising dollar and bond yields in the US.
They have pulled out Rs 226,420 crore so far in 2022, NSDL data showed. Further, the Indian currency rupee has retreated from its all-time high of 80 per US dollar.
This morning, it traded at around 79.81 per US dollar, data showed.
"The lower extremity of our 79.85-80.15 band came under attack yet again on Friday, confirming our leaning towards downside bias, which now aims for 79.6.
Pull back above 79.95 would, however, dilute such bias allowing intraday spikes to 80.05," said Anand James - Chief Market Strategist at Geojit Financial Services.