Domestic markets are likely to open on a negative note on Monday. However, analysts expect the market to sustain the momentum with information technology stocks joining the rally. Foreign portfolio investors continue to invest in India following the Fed’s dovish stance.

The market will remain in the consolidation phase as investors will likely indulge in sector/stock rotation. Profit-taking at higher levels and value-buying at lower levels are likely to keep the market in a range.

Manoj Purohit, Partner & Leader – FS Tax, Tax & Regulatory services, BDO India, “The recent pullout by the US on Federal rate hikes have been one of the catalysts to keep the Indian market flooded with cash flows from the FPI fraternity.

FPIs have reversed their position and turned into net buyers in the first week of December.

Gift Nifty at 21,487.50 indicates a negative start for domestic markets as Nifty futures on Friday closed at 21,557.10. Most Asian stocks are down in early deals on Monday, even as US stocks closed in the green.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said India is one of the top investment destinations of FPIs. “There is a near consensus now in the global investing community that India has the best prospects among the emerging economies for sustained growth for many years to come. This growth has the potential to create phenomenal wealth through the stock market. FPIs are investing to benefit from this potential wealth creation,” he further said.

The other factors contributing to FPIs to pump liquidity in the Indian market are RBI’s inflation forecast at 5.4 per cent and positive signs of improved capex and valuations. The Sensex touching an all-time high also acted as an icing on the cake.

“All in all, the momentum for the Indian cash equities market reflects a promising wind up of 2023 and a strong base for 2024 to start with, taking the foreign investments inflows to a new horizon,” said Purohit.