Uncertainty in the market continues with increasing risk arising from rising ovid-19 infections in India in the context of a third wave in parts of Europe. But the relief is that the second wave is less intense than the first. This and the fact that vaccination is accelerating is likely to support the financial markets, said an analyst.
“Volatility is here to stay for some time before stability emerges. A major trend in the market now is the comeback of pharma stocks in recent days and the weakness in banking stocks. Pharma may continue to find favour, but high quality banking stocks are unlikely to languish. Q4 results of IT and banking majors, and top-rung FMCG companies would be good. The market response will happen before the results are announced,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Factors driving markets
- Covid-19 cases: India recorded 47,262 fresh coronavirus cases in a day, the highest single-day rise so far this year, taking the nationwide tally to 1,17,34,058, the Union Health Ministry said on Wednesday. It also said a new “double mutant” variant of Covid-19 was detected in Delhi, Maharashtra and some other places.
- Dollar at a high: The dollar hit a fresh four-month high to the euro on Thursday amid worries about Europe’s third COVID-19 wave and potential US tax hikes.
How are the blue chip stocks doing?
After opening in the red, benchmark indices moved further lower. At 9:45 am, BSE flagship Sensex was down 456 points or 0.93 per cent to 48,724. NSE benchmark Nifty followed and fell 131 points or 0.90 per cent to 14,418.
“The break of 14,750 yesterday has proved fatal. The market has been on a single slope fall and should be headed to 14,300-14,350. The resistance on the upside is around 14,900 and hence any intraday up move can be used to short this market,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
In the 50-share pack Nifty, ONGC was the biggest gainer, up 0.91 per cent. Tata Steel, Shree Cement, UPL, Larrsen and Toubro and Dr Reddy’s Laboratories were among other gainers.
Eicher Motors was the top loser in the pack, down 2.30 per cent. Tata Motors, IndusInd Bank, SBI, Kotak Mahindra Bank, Bajaj Finance, HCL Tech, Indian Oil and Maruti Suzuki were other losers in the pack.
Broader market indices were trading with cuts, underperforming their headline peers. Nifty Smallcap was down 1.40 per cent while Nifty Midcap declined 1.05 per cent. The broadest index on NSE — the Nifty 500 — was down 0.83 per cent.
Varun Beverages, Syngene, Jubilant Foodworks, JB Chemicals, BASF and Balrampur Chini Mills were gainers from the space while Dixon Tech, Amber Enterprises, IEX, Dhani Services, Edelweiss Financial Services and Future Retail were under selling pressure.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent. Hong Kong shares fell sharply at the open but then trimmed their losses to a 0.18 per cent decline. Alibaba Group Holding Ltd, Xiaomi Corp, and Tencent Holdings all traded lower. Shares in China rose 0.08 per cent.
Elsewhere, Japanese stocks rose 0.71 per cent and Australian shares rose 0.24 per cent as bargain hunters bought shares of consumer goods, real estate, and financial firms.
US stock futures rose 0.25 per cent.