Indices have been consolidating for a while, however, all dips are being bought eventually. Foreign institutional investors have continued to pour money in India, providing massive support to market rally.
“The rise in the US 10-year bond yield to 1.36 per cent reflects the markets’ concern about a potential rise in inflation. The ultra-easy monetary policy along with the $1.9 trillion fiscal stimulus proposed by the Biden administration may trigger inflation, which has been conspicuous by its absence for long,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He added, “Back home, the escalation in Covid cases in Maharashtra is emerging as a cause of concern. These concerns have impacted FPI flows to the market which, though positive, appears to be slowing down. Clear trends on these concerns have to be watched.”
Factors driving markets
- US bond yields rise: Benchmark US Treasury yields hit a near one-year peak but the dollar eased against rivals.
- Covid cases: In some pockets of India, covid cases have started spiking, spooking investors who believed the crisis was all but over. If this leads to more lockdowns, there could be more negatives for the market.
- Stimulus coming: President Joe Biden’s push for a $1.9 trillion Covid-19 relief bill took a step forward on Friday as a US House of Representatives committee unveiled the legislation Democrats hope to pass by late next week.
How bluechips are doing
After opening in the green zone, benchmark indices slipped to the red zone. At 9:42 am, BSE flagship Sensex was down 73 points or 0.14 per cent to 50,817. NSE benchmark Nifty followed and fell 1 point or 0.01 per cent to 14,980.
“The markets have opened below 15,100 which is a short term support for the Nifty. We need to evaluate today’s closing price: for the markets to continue remaining bullish, we would need to close above 15,100. A break of this level on a closing basis would alert the bearish triggers of the market and it can drop to 14,800 and then 14,600. It would be better to evaluate the index on Monday with new weekly support and resistance levels,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, Hindalco was the biggest gainer, up 3.83 per cent. JSW Steel, ONGC, Tata Steel, HDFC Bank, Adani Ports, BPCL, Grasim Industries and Asian Paints were among other gainers.
M&M was the top loser in the pack, down 1.83 per cent. L&T, HDFC, Coal India, Eicher Motors, TCS, Maruti Suzuki, Divi’s Labs, HCL Technologies and Bajaj Finance were other losers in the pack.
Broader markets
Broader market indices traded with gains but outperformed their headline peers in the morning trade. Nifty Smallcap was up 0.04 per cent while Nifty Midcap added 0.37 per cent. The broadest index on NSE — the Nifty 500 — was up 0.07 per cent.
Aditya Birla Capital, Trent, SAIL, Dilip Buildcon, Cyient and Sonata Software were among major gainers from the space while Bajaj Electricals, PVR, IOL Chemicals, L&T Tech Services, Alembic Pharmaceuticals and Syngene were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2 per cent, after slipping from a record top last week as the jump in US bond yields unsettled investors.
Japan’s Nikkei recouped 1.0 per cent and South Korea 0.4 per cent, but Chinese blue chips lost 1.2 per cent.
S&P 500 and EUROSTOXX 50 futures were both hesitating around flat, while FTSE futures fell 0.6 per cent.
