Winning Bizness Desk
Mumbai- The Indian stock market has seen the fastest recovery in nearly two decades this days. Investors are both scared and wondering whether this momentum of overseas buying will continue in the midst of global volatility. The NSE Nifty-50 index had gained over 14 per cent from mid-June lows. After months of sell-off, it gained momentum as foreign investors started buying.
Foreign investors helped recovering
The market recovered sharply due to the purchase of foreign investors. This took the market from oversold territory to a strong overbought zone in just 39 sessions. This is the fastest recovery in the market since 2003. Foreign investors have turned net sellers into net buyers in India amid a weakening dollar and a sharper-than-expected fall in commodity prices.
What experts say ?
Commodities, including oil and base metals, fell 10-20 per cent from their peak levels in June. This is a big relief for net importers like India. "We didn't expect global factors to improve so quickly," said Bank of America analyst Amish Shah. "Low positioning" and few investment options in other emerging markets led to a resumption of inflows from global investors, he said.
China's economic policy affect growth
Shah is also skeptical about the stability of foreign purchases. He said that China's economic policy may change to focus on growth. This can lead to a rise in the prices of crude and other commodities. The trend of decline in the domestic stock markets continued on Monday as well. BSE Sensex closed down 872.28 points. According to stock market data, Foreign Institutional Investors (FIIs) sold shares worth 475 crore earlier in this week.