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Brexit discussions got a new lease of life over the weekend while hopes of more bond buying from the Federal Reserve also egged investors on. Meanwhile, foreign investors have been pouring money like water, driving markets higher.
“FPI buying continues unabated, pushing the benchmark indices to record levels. When money flows like this, market has only one way to go – up. But investors should remember that valuations are high and risky. Sharp surge in Covid infections in the US, recent spike in infections in Germany, S Korea, etc, the farmer agitation lingering without a settlement and the possibility of a Brexit without a deal are areas of concern. Investors have to be cautious,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Factors driving markets
- US gets first batch of vaccines: The first shipments of COVID-19 vaccine began on Sunday, after a U.S. regulator approved Pfizer Inc and BioNTech SE’s vaccine.
- Progress on stimulus: The text of a $908 billion bipartisan COVID-19 relief plan is set to be released as early as Monday and will be split into two packages in a bid to win approval, a Reuters report said.
- Glimmer of hope on Brexit front: London and Brussels agreed on Sunday to “go the extra mile” in the coming days to try to reach a trade agreement, even as British Prime Minister Boris Johnson said both parties were very far apart on key issues and no deal Brexit was a possibility.
How are bluechips doing
After opening in the green, benchmark indices maintained their gains. At 9.45 am, BSE flagship Sensex was up 199.56 points or 0.43 per cent to 46,298. NSE benchmark Nifty followed and rose 61.55 points or 0.46 per cent to 13,575.
“While the markets have opened on a positive note this morning, we must not lose sight of the fact that we are in a patch of resistance. This range is between 13,400-13,700. The Nifty is currently trading around the upper end of this range. Unless we get past 13,700 or break 13400, we will not see a convincing rally up or down. There is strong support around the 13,350-13,400 range and as long as that holds, traders can utilise dips to accumulate long positions,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, Cipla was the biggest gainer, up 3.84 per cent. Coal India, ONGC, Tata Steel, Indian Oil, NTPC, Grasim Industries and ICICI Bank were among other gainers.
Eicher Motors was the top loser in the pack, down 1.49 per cent. Tech Mahindra, HDFC Life Insurance, Bajaj Auto, Wipro, Hero Motocorp, HDFC Bank and Tata Motors were other losers.
Broader markets
Broader market indices saw buying, trading in-line with their headline peers in morning trade. Nifty Smallcap rose 1.03 per cent while Nifty Midcap added 0.37 per cent. Broadest index on NSE, Nifty 500, was up 0.40 per cent.
IRCTC, Federal Bank, Jindal Steel, Vakrangee, JB Chemicals and Omaxe were among major gainers from the space while SpiceJet, Affle India, Lemon Tree Hotels, YES Bank, Escorts and Aditya Birla Capital were under selling pressure.
Global markets
E-Mini futures for the S&P 500 responded by rising 0.5 per cent, while March Treasury bond futures slipped 4 ticks. EUROSTOXX 50 futures added 0.6 per cent and FTSE futures 0.3 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent, having hit a string of record highs last week.
Japan’s Nikkei added 0.6 per cent as a survey showed the mood among hard-hit Japanese businesses had improved in the December quarter.
What to expect
- US Fed meet: There could be some movement in currency markets ahead of US Federal Reserve’s two-day meeting starting on Tuesday, where policymakers are expected to increase purchases of longer-dated treasuries to contain a rise in yields.
- Inflation data: India will release its wholesale and retail inflation data later in the day.
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