Shares of PNB Gilts, a company primarily involved in supporting government borrowing programs, hit a 20% upper circuit on Friday, reaching ₹81 per share on BSE during intraday trading. This surge was triggered by the anticipation of billions of dollars in foreign inflows following India's inclusion in JPMorgan Chase & Co. (NYSE:JPM)'s emerging market index. The stock surpassed its previous 52-week high of ₹71.6 per share set on July 21, 2023.
The S&P BSE Sensex, however, was down by 113 points or 0.1 percent to quote at 66,116 levels. On the same day, around three crore shares exchanged hands at both exchanges as compared to the one-month average of seven lakh shares.
JPMorgan Chase & Co announced its intention to incorporate Indian government bonds into its benchmark emerging-market index on Friday. This move is expected to attract substantial foreign investments into India's debt market and is scheduled to take effect on June 28, 2024. India will hold a maximum weight of 10 percent in the index which could result in inflows of up to $30 billion.
This development comes amidst a period of global economic shifts and market uncertainty. For instance, most Asian markets experienced a sluggish start on September 22 due to a surge in US Treasury yields. Among them, Japan's Nikkei index declined by about one percent ahead of the Bank of Japan's interest rate decision.
On the same day, data from the National Stock Exchange (NSE) showed that Foreign Institutional Investors (FII) sold shares worth ₹3,007.36 crore, while Domestic Institutional Investors (DII) bought stocks worth ₹1,158.14 crore (INR100 crore = $12 million).
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