Riding on sentiment

Bank recapitalisation is a fillip for the markets

The announcement of the bank recapitalisation plan has imparted new momentum to the stock market rally. Importantly, it seems to have led to a change in the attitude of foreign portfolio investors (FPIs). They were net sellers in equities to the tune of Rs 5,279 crore between April and September, and sold Rs 6,500 crore in October before bank recapitalisation was announced on October 24. But the very next day, they pumped in a mammoth Rs 6,800 crore and continued to buy, parking over Rs 10,000 crore in Indian equities in the last five sessions. The FPI sentiment reversal has