Street signs: US election cloud on FPI flows, tech boost for L&T & more

US election cloud on FPI flows

Foreign portfolio investors (FPIs) bought equities worth $768 million over the past five trading sessions, even as domestic institutional investors (DIIs) sold $834 million in the same period. Indians in need of liquidity have been trimming their mutual fund holdings, which has led to the selling by domestic institutions. It remains to be seen if FPI flows will keep up as US presidential election approach. Discussions on the quantum of stimulus and the Covid-19 progression in Europe may be other factors that dictate FPI flows. Analysts expect the markets to remain upbeat until the presidential polls, but investors may be better off on the sidelines until then.

Ashley Coutinho

Tech boost for L&T

Engineering and construction giant Larsen and Toubro (L&T) has been a laggard at the bourses this year with its shares still down 28 per cent, even as the Sensex has recouped most of the losses. While high debt and uncertain outlook for the key business remain a concern for L&T, some analysts say the rally in its technology arms L&T Infotech and Mindtree hasn’t been adequately priced in its price. Shares of both L&T Infotech and Mindtree are up 70 per cent this year amid a re-rating in tech stocks. Analysts say the Street is also keenly eyeing the special dividend L&T has proposed to declare on Wednesday.

Sundar Sethuraman

Big week for banking stocks

The Bank Nifty index has rallied 20 per cent in the past month, twice the gain posted by the Nifty50 index. Analysts say investors’ conviction in banking stocks will be tested this week as big private sector lenders ICICI Bank and Axis Bank declare their September quarter results. “Already the poor numbers by SBI Cards has shaken market confidence. If results of Axis or ICICI Bank disappoint, the sharp rally seen in banking stocks could fizzle out,” said an analyst.

Sundar Sethuraman