Indian stock markets bounced back in line with global equities as concerns about the Omicron coronavirus pandemic eased. Sensex rose 900 points while Nifty was above the level of 17,150. Both indices fell more than 1.5% on Monday to their lowest levels in three months.
Amit Gupta, Fund Manager, Portfolio Management Services, ICICI said, “Broadly speaking, we believe further consolidation is possible in the Indian and US markets. Omicron is generating only a mild impact, but as it is spreading rapidly , so it could lead to more travel restrictions.” securities. “If there are studies that show that this version will not be as bad as Delta, then the market will certainly take it very positively.”
The rupee rose 10 paise to 75.36 against the US dollar in early trade on Tuesday as gains in domestic equities and a weak US currency in overseas markets boosted investor sentiments. However, higher crude oil prices in the international market and unhindered outflow of foreign capital limited the rupee’s gains.
Stock markets in Asia followed Wall Street higher today as concerns about the latest version of the coronavirus eased. Wall Street’s benchmark S&P 500 index rose 1.2% after the White House’s chief medical adviser said the Omicron version could be less dangerous.
America’s top infectious disease official, Dr. Anthony Fauci, told CNN on Monday that it does not appear that Omicron has “a degree of seriousness.”
In the Indian markets, metals and banking stocks gained today with both the sectoral indices rising over 2%. Kotak Bank, ICICI Bank, Axis Bank, Bajaj Finance and Tata Steel were among the gainers in the Sensex range between 2.5% and 3.5%.
Shares of Tata Motors Ltd rose 1.6% as the carmaker on Monday said it would hike prices of its commercial vehicles from January.
Santosh Meena, Head of Research, Swastik Investmart, said: “We are in a bull market where we are witnessing the first meaningful correction, having completed 10% of our time from the 18604 high to 16789 low. The most recent low or bottom May turn down. Correction may see further expansion towards 16700-16400 zone or less but this correction is a buying opportunity. Hard to say if Nifty will close above 18000 by end of 2021 but I believe The second half of December is likely to be positive for the market. Historically, December has been one of the best months where Nifty has seen an average gain of 3% over the last 10 years.
The Monetary Policy Committee of the Reserve Bank of India will announce its policy decision tomorrow. The Reserve Bank of India will likely keep its prime lending rate at a record low for the ninth straight meeting, with a new virus version seen as the latest threat to the central bank’s efforts to normalize policy.
“Although a close call, RBI is likely to avoid a cliff edge in the upcoming policy with any material reverse repo rate hike. The policy will again be used as a lever to prepare the markets for a gradual approach towards normalization. The redistribution/revaluation of existing liquidity through VRRR duration/quantum/cut-off has helped ease the alignment of certain money market rates towards the repo rate. We are confident that the market will still be confident about any further tightening of financial conditions,” Emkay said in a note.
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