Amidst an alarming rise in Covid cases, a sigh of relief for the market is that there is no large-scale lockdown. But the massive restriction of economic activity in the economically significant state of Maharashtra is bound to have its impact on growth and earnings, said an analyst.
“The market is driven by hope that in this race between the pandemic and vaccination, the latter will ultimately win. But what price we will have to pay for this is clouded in profound uncertainty. Pharma and IT could be safe defensive plays at this juncture. Investors can move on to economy-facing stocks when the daily Covid-19 cases start to come down steadily,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FACTORS DRIVING MARKETS
Good news
- Dollar dips: The dollar held near a three-week low against a basket of currencies on Thursday, as US bond yields leveled off following a surge last month.
- US economy: The US economy accelerated into the spring on the basis of rising consumer sentiment, according to the Federal Reserve, and Fed Chair Jerome Powell said the country is on track for faster growth and hiring in the coming months.
Bad news
Covid rampage: New cases of coronavirus infection in India were recorded above 1,80,000, taking the total tally of Covid-19 cases to 1,38,73,825, according to the Union Health Ministry data. The active caseload comprises 9.85 per cent of the total infections.
How are the blue chip stocks doing?
After opening in the red, benchmark indices dropped further. At 9:40 am, BSE flagship Sensex was down 152 points or 0.31 per cent at 48,392. NSE benchmark Nifty followed, dropped 54 points or 0.30 per cent to 14,462.
In the 50-share pack Nifty, Hindalco was the biggest gainer, up 3.61 per cent. ONGC, Cipla, Tata Steel, Wipro, Coal India, Adani Ports, UPL, Sun Pharma, Kotak Mahindra Bank and Dr Reddy’s Labs were among other gainers.
Infosys was the top loser in the pack, down 3.67 per cent. Eicher Motors, Grasim Industries, M&M, IndusInd Bank, Maruti Suzuki, Bajaj Finance, Tata Consumer, UltraTech Cement and Bajaj Finserv were other losers in the pack.
Broader markets
Broader market indices traded with cuts, underperforming their headline peers in morning trade. Nifty Smallcap was down 0.45 per cent while Nifty Midcap fell 0.26 per cent. The broadest index on NSE – the Nifty 500 – was down 0.23 per cent.
Aditya Birla Capital, SAIL, Adani Total Gas, Sterlite Tech, Nalco and HEG were gainers from the space while VIP Industries, Sonata Software, Bajaj Electric, Bank of India, Indian Hotel and Mindtree were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan paused after two straight days of gains. It was last at 690.53, a long way from a record high of 745.89 touched in February.
Japan’s Nikkei rose 0.2 per cent while South Korea’s KOSPI index was up a tad. Australia’s benchmark index slipped 0.4 per cent as miners were dented by weaker prices for iron ore and coal.
Chinese shares started in the red on Thursday with the blue-chip CSI300 index down 0.2 per cent.
