While the second wave of the pandemic is a cause of concern, it does not warrant a panic reaction in the market. Lockdowns and restrictions will only be localised and are unlikely to severely impact economic recovery. The fact that we have vaccines will preempt extreme fear and panic, said an analyst.
“Businesses have learned to adapt to the new normal. TCS’ results confirm that we are in a multi-year upcycle in IT. So it makes sense to remain invested in top quality IT names along with pharma. Weakness in the Financials segment will give opportunities to investors to buy high-quality names in leading banks, mortgage and fintech companies,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FACTORS DRIVING MARKETS
Good news
- Low-level buying: After a drastic fall on Monday, Indian equities are available at comparatively cheaper rates, attracting investors. This has led to some low-level buying.
- Q4 earnings: The country’s largest software exporter bagged the highest quarterly orders and reported a stellar performance on the margin front. This improves revenue visibility, a solace for investors. The good start is keeping investors hopeful.
Bad news
- Covid rampage: India recorded a massive surge of 1,60,694 Covid-19 cases in the last 24 hours. With this, the country’s Covid-19 infections have shot up to 13,686,073 cases, as per a tally. India is now the second worst-hit nation in terms of total Covid-19 cases and third-worst in terms of active cases.
- Rise in yields: Treasury yields in the US have stayed marginally higher after a successful three-year note auction and ahead of important data releases this week, including consumer price inflation on Tuesday. Treasury sales of $271 billion in new debt and a key inflation report this week could put an end to the bond market’s recent lull, reinvigorating a surge in yields.
- Rising inflation: A survey published on Monday by the Federal Reserve Bank of New York showed US consumers raised their inflation rates again in March following gradual increases in recent months, and they became more positive about the job market.
How are the blue chips stocks doing?
After opening in the green, benchmark indices extended their gains. At 9:34 am, BSE flagship Sensex was up 239 points or 0.50 per cent at 48,122. NSE benchmark Nifty followed, rising 75 points or 0.53 per cent to 14,386.
In the 50-share pack Nifty, ONGC was the biggest gainer, up 3.88 per cent. UPL, Shree Cement, Hindalco, M&M, Bajaj Finance, Power Grid, Tata Consumer and Indian Oil were among other gainers.
TCS was the top loser in the pack, down 3.84 per cent. Tech Mahindra, Infosys, Adani Ports, Dr Reddy’s Labs, Wipro, Asian Paints, HCL Tech, Nestle India and Tata motors were other losers in the pack.
Broader markets
Broader market indices were trading with gains, outperforming their headline peers in morning trade. Nifty Smallcap was up 1.05 per cent while Nifty Midcap added 0.57 per cent. The broadest index on NSE — the Nifty 500 — was up 0.28 per cent.
Adani Total Gas, Indian Hotel, M&M Financial Services, Graphite India, Strides Pharma and HEG were gainers from the space while Vakrangee, Edelweiss Financial Services, Future Retail, Dhani Services, PI Industries and Coforge were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan was trading less than 0.1 per cent higher early on Tuesday.
In Australia, the S&P/ASX200 gained 10 points to 6983.90 early in the session while Japan’s Nikkei rose 0.9 per cent. Tech stocks drove the gain in Australian stocks while the country’s major miners showed signs of weakness.
Hong Kong’s Hang Seng Index added 0.6 per cent in early trade while the mainland bluechip index CSI300 edged up 0.3 per centahead of March trade figures due to be published Tuesday. South Korea’s KOSPI 200 Index was 0.5 per cent higher.
In the United States, the Dow Jones Industrial Average fell 55.2 points, or 0.16 per cent, to 33,745.4, the S&P 500 lost 0.81 points, or 0.02 per cent, to 4,127.99 and the Nasdaq Composite dropped 50.19 points, or 0.36 per cent, to 13,850.00.
