Surging coronavirus cases have become a serious concern with an increasing number of cities and towns declaring night curfews. Unless this second wave of infections peaks soon and subsides, economic activity will be impacted and the market assumptions of above 10 per cent GDP growth, and above 30 per cent earnings, growth will be challenged, said an analyst.
“The market is climbing all walls of worry. Activity has now moved to mid-small-caps. Bulls are chasing value in these segments. The sharp depreciation in INR following the announcement of G-SAP by the RBI will benefit exporters, particularly IT. US bond yields and dollar index cooling off is EM positive. That’s why FIIs are not selling in spite of negative news,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FACTORS DRIVING MARKETS
Good News
Yields, dollar fall: The US dollar fell to a two-week low against a basket of currencies after the number of Americans filing new unemployment claims increased for the second straight week, last week. US Treasury yields fell on Thursday, pressured by fresh dovish comments from Federal Reserve Chair Jerome Powell.
Bad news
Covid rampage: With 1,31,787 new Covid-19 cases reported as of 11:45 pm on April 8, India registered the highest single-day spike in infections since the beginning of the pandemic. As many as 802 deaths were also recorded on the day.
How are the blue chip stocks doing?
After opening in the red, benchmark indices managed to eke out gains but in a narrow range. At 9:55 am, BSE flagship Sensex was down 52 points or 0.10 per cent at 49,694. NSE benchmark Nifty followed, falling 16 points or 0.11 per cent to 14,858.
‘The resistance of 14,950 has worked accurately for the Nifty; we failed to close above it. We need to get past 14,950-15,000 for an up move to commence. Thereafter it should be a bullish market which can take the index to 15,300-15,400. If we break 14,500, we can tumble to 14,200-14,300. It is a situation which requires patience and discipline. Traders need to be cautious,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, Tata Motors was the biggest gainer, up 2.66 per cent. HUL, Titan, Sun Pharma, Cipla, HDFC, ITC, Grasim Industries and Adani Ports were among other gainers.
Bajaj Finance was the top loser in the pack, down 1.89 per cent. UPL, Tata Steel, Hindalco, NTPC, Asian Paints, ICICI Bank, JSW Steel, L&T, HDFC Bank and Indian Oil were other losers in the pack.
Broader markets
Broader market indices were trading with gains, outperforming their headline peers. Nifty Smallcap was up 0.32 per cent while Nifty Midcap added 0.30 per cent. The broadest index on NSE — the Nifty 500 — was down 0.04 per cent.
Adani Total Gas, Bank of India, Dhani Services, India Cements, Indian Bank and PNB HOusing Finance were gainers from the space while HEG Infra, Graphite India, Future Retail, Shriram Transport Finance, Hindustan Zinc and AU SFB were under selling pressure.
