The MPC meeting this week will be watched very closely as growth is coming back and so is inflation and RBI has been sucking out liquidity from the markets which is being viewed as a precursor to change in accommodative stance, said an analyst.
“News from China can turn out to be a drag. China is trying to limit the damage to its real estate sector without bailing out Evergrande. An inevitable consequence will be a slowdown of the Chinese economy which will have implications for commodity prices and currencies of commodity exporters,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices rose higher. At 10.15 am, BSE flagship Sensex was up 667 points or 1.13 per cent to 59,432. NSE benchmark Nifty climbed 183 points or 1.04 per cent to 17,715.
“The Nifty50 formed a Doji kind of pattern on the daily charts and saw bearish candle formation on the weekly scale, indicating indecisiveness among the bulls and the bears. While the market would remain volatile in the near future, 17,650-17,750 level would be the key resistance level for traders. 17,400-17,300 could act as good support for positional traders,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Divi’s Labs was the biggest gainer, up 5.13 per cent. Tata Motors, M&M, SBI, NTPC, HDFC, Bajaj Finserv, ONGC, Dr Reddy’s Labs and Bajaj Finance were among other gainers.
Grasim Industries was the top loser in the pack, down 2.31 per cent. JSW Steel, UPL, Tata Steel, Nestle India, Eicher Motors, Indian Oil, HUL and HDFC Life Insurance were among those that traded in the red.
FACTORS DRIVING MARKETS
Good news
Covid oral treatment: Investor sentiment got a lift on Friday after Merck & Co said an experimental oral antiviral treatment could halve the chances of dying or being hospitalised for those most at risk of contracting severe COVID-19.
Yields, dollar lower: The 10-year US Treasury yield stood at 1.460 per cent, off Tuesday’s three-month high of 1.567 per cent. Lower US yields also weighed on the dollar in the currency market.
Bad news
Evergrande crisis: Trading in shares of debt-laden China Evergrande was suspended after it missed a key interest payment on its offshore debt obligation for the second time last week.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.76 per cent while Nifty Midcap advanced 0.57 per cent. Broadest index on NSE, Nifty 500, was up 0.55 per cent.
Trident, CAMS, DCM Shriram, Dixon Tech, Federal Bank and Union Bank of India were gainers from the space while Aditya Birla Fashion Retail, Oil India, GMR Infra, IDBI, Welspun India and Delta Corp were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent. The index marked its first quarterly fall in six quarters. Hong Kong led the decline with a 1.9 per cent fall in the Hang Seng index. Japan’s Nikkei erased earlier gains to stand 1.4 per cent lower at one-month lows of 28,375.
Chinese mainland markets will be closed until Thursday for holidays while South Korean markets were also shut on Monday.
MSCI’s broadest gauge of world shares, ACWI, slipped 0.1 per cent to 711.92, not far from a three-month low hit on Friday at 705.27.
