Indian stock markets started strongly in 2022 with BSE Sensex and Nifty 50 indices rising sharply today, lifted by strong performance in banking stocks, even as investors remained cautious on a spike in Omicron cases. Sensex rose 929 points to 59,183 while Nifty rose 1.6% to close above 17,600.
Global stock markets and US futures were mostly higher on the first trading day of 2022 after Wall Street ended last year with a double-digit gain.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments, said: The index is all set to move ahead with a bullish rally. As expected on Friday, we have achieved the target of 17600. Now we should move towards 17850 as the next level of resistance. After that 18050 will be the next possible target for Nifty. As we are in a positive position, any downside or intraday dip can be used to accumulate buy positions for higher targets.”
Financial stocks took the lead with the Nifty Bank index gaining 2.5%. TCS, Bajaj Finserv, Bajaj Finance, Axis Bank and ICICI Bank were among the top gainers in the Sensex pack.
Market breadth was extremely positive with many small and midcaps in sectors posting smart gains.
S Ranganathan, Head of Research, LKP Securities said, “As India expands its vaccine coverage, the Bulls started the new year as Nifty Bank led the rally with good support from other sectoral indices buoyed by positive global cues. Did.”
Narendra Solanki, Head-Equity Research (Fundamentals), Anand Rathi Shares & Stock Brokers said: “Blue-chip stocks witnessed healthy buying. Sentiments were upbeat as the Finance Ministry said that Goods and Services Tax (GST) revenue exceeded 13 per cent 1.29 lakh crore in December 2021, as compared to 1.15 lakh crore GST revenue in the same month last year, mainly due to spurt in economic activity and anti-evasion measures. However, traders ignored reports that India’s manufacturing activity lost some momentum in December and hit a three-month low after hitting a 10-month high in November amid fears that the coronavirus The rapidly spreading third wave of the COVID-19) pandemic may impact consumer sentiment. and output.”
Data released today shows activity in India’s manufacturing sector moderated in December, but production growth remained in the region amid slow sales growth and new orders, even as supply-chain disruptions, Business sentiment was also impacted by concerns around COVID-19 and inflationary pressures.
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) declined to 55.5 in December from a 10-month high of 57.6 in November.
On his outlook for 2022, VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, says: “Investors should be prepared for modest returns in 2022 with expected outperformance from financial, IT, telecom and construction related sectors.” The biggest support for the rally is coming from America’s Mother Market which is on a secular rally.”
On risk factors, he added: “Even though Omicron is bullish, the market does not expect any restrictions on economic activity that will affect growth and earnings. One trigger that could break this uptrend is inflation. “A sharp rise in the U.S. and the Fed and other central banks are raising interest rates above current market expectations. Markets may continue to rally if inflation comes under control.”
areas to shine in 2022
“The outperformance of IT (60% in 2021 and 55% in 2020) is likely to continue in 2022 as well. “Private bank underperformance (4.58% in 2021) is likely to reverse in 2022 with improving credit demand, declining NPAs and rising margins,” said Vijayakumar of Geojit Financial Services.
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