Volatility indicator has also surged significantly, highlighting the nervousness among traders. Losses in indices were, however, checked as US lawmakers finalised talks on a massive stimulus deal.
“A new and faster-transmitting strain of the virus in the UK is an area of concern. This has led to further restrictions on travel and economic activity. Acceleration in the number of cases in the US and poor economic data are other dampeners. However, the US Congress agreement on $900 billion of fiscal stimulus is likely to support markets. High valuation continues to be a concern in India. But the power of FII-driven liquidity is overwhelming all negative news. Investors should exercise caution,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Factors driving markets
Stimulus ready: US congressional leaders have reached agreement on a $900 billion package to provide the first new aid in months to the coronavirus-hit economy, the Senate’s top Republican and Democrat said on Sunday, with votes likely on Monday.
More restrictions: Covid-19 infections continued to soar globally as South Korea and London reported record new coronavirus cases on Sunday, with Britain’s health minister suggesting tighter curbs could stay for some time.
Brexit talks likely to fail: Britain insisted on Sunday the European Union should shift position to open the way to a post-Brexit trade pact, prompting the bloc’s negotiator to defend the union’s right to protect its interests.
How are bluechips doing
After opening in the red, benchmark indices dipped lower. At 9.44 am, BSE flagship Sensex was down 70 points or 0.15 per cent to 46,890. NSE benchmark Nifty followed and declined 38 points or 0.28 per cent to 13,722.
“The Nifty is keeping above the crucial 13,700 level. If we can continue doing that, the markets should be headed to 14,000. A strong support lies at the 13,500-13,600 levels and as long as that holds, the trend of the index remains bullish and traders can utilise any dip to accumulate long positions,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, L&T was the biggest gainer, up 2.38 per cent. Cipla, Reliance Industries, Sun Pharma, Infosys, JCL Tech, HDFC Bank and Bajaj Finserv were among other gainers.
GAIL was the top loser in the pack, down 2.04 per cent. Tata Motors, M&M, Divi’s Laboratories, ICICI Bank, Power Grid, HIndalco, Tata Steel and ONGC were other losers.
Broader markets
Broader market indices also traded with cuts underperforming their headline peers in morning trade. Nifty Smallcap dipped 0.38 per cent while Nifty Midcap fell 0.72 per cent. Broadest index on NSE, Nifty 500 was down 0.47 per cent.
Future Retail, L&T Tech Services, JSW Energy, Vakrangee, IndiaMART InterMESH and Lemon Tree Hotels were among major gainers from the space while SpiceJet, Equitas Holdings, IDFC, Crompton Greaves Consumer, Canara Bank and M&M Fin Services were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 per cent after hitting a string of record peaks last week. Japan’s Nikkei reversed early gains to be down 0.6 per cent, off its highest since April 1991.
Sterling slid 1.1 per cent while the lack of a Brexit deal to cut 1 per cent off FTSE futures, while EUROSTOXX 50 futures shed 1.5 per cent. Futures for the S&P 500 jumped at first, only to fade to a loss of 0.1 per cent as the session progressed.
