NEW DELHI: Indian stock indices started Friday's trade with marginal gains after falling sharply the previous session. A broad-based sell-off in shares coupled with a weak economic growth outlook weighed on the investors' sentiment.
At 9.31 a.m., Sensex traded at 58,879.35 points, up 112.76 points or 0.19 per cent, whereas Nifty traded at 17,579.45 points, up 36.65 points or 0.21 per cent.
Among the Nifty 50 companies, 36 of them advanced and the rest 14 declined, National Stock Exchange data showed.
"Market is back to a phase of high volatility. The recent resilience of the Indian market can be attributed largely to foreign institutional investors turning buyers. But this FII bullishness appears to be over in the near-term as evidenced by the FII sell figure of Rs 2,290 cr yesterday," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The near-term outlook for the market has turned bearish amidst volatility. Investors can utilise deep cuts in the market to buy domestic cyclical like autos which are showing strong resilience supported by healthy and improving fundamentals."
Rating agency Moody's Investors Service on Thursday once again lowered India's economic growth forecast for 2022 to 7.7 per cent.
In May, it downgraded India's GDP growth estimate for the current calendar year to 8.8 per cent from its earlier projection of 9.1 per cent in March.
Earlier on Monday, Indian stocks experienced a bloodbath on US Federal Reserve Chair Jerome Powell's comments when he said the central bank won't back off in its fight against rising inflation.
The Federal Open Market Committee's (FOMC) focus right now is to bring inflation back down to the 2 per cent target, which is currently at around 8.5 per cent.
Powell said in a speech to the central banking conference in Jackson Hole, Wyoming that the US economy will need tight monetary policy "for some time" before inflation is under control.
"Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labour market conditions. While higher interest rates, slower growth, and softer labour market conditions will bring down inflation, they will also bring some pain to households and businesses," Powell said at the conference. Meanwhile, foreign portfolio investors turned net buyers in Indian equity markets for two consecutive months through August, which is a silver lining though.
In August, they bought equities worth another Rs 51,204 crore, data showed.
In July too, they were net buyers with a total purchase of equities worth Rs 4,989 crore.
Till early July, foreign portfolio investors (FPIs) had been selling equities in the Indian markets for the past nine-to-ten months due to various reasons. Tightening of monetary policy in advanced economies including rising demand for dollar-denominated commodities, and strength in the US dollar had triggered a consistent outflow of funds.