Partly justifying the market rally, corporate earnings have grown by 46 per cent in Q2. But, even discounting this impressive performance by India Inc, the market is overvalued and, therefore, corrections are due, said an analyst.
“The global headwind for markets is likely to come from a sooner-than-expected rate hike by the Fed by, say, mid-2022 contrary to market expectation of a rate lift-off starting early 2023,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices maintained their lead. At 9.38 am, BSE flagship Sensex was up 224 points or 0.37 per cent to 60,910. NSE benchmark Nifty advanced 85 points or 0.47 per cent to 18,188.
In the 50-share pack Nifty, ONGC was the biggest gainer, up 2.91 per cent. Hero MotoCorp, Asian Paints, Kotak Mahindra Bank, HDFC Bank, Axis Bank and Maruti Suzuki were among other gainers.
Hindalco Industries was the top loser in the pack, down 0.79 per cent. Coal India, Bajaj Finjserv, Cipla, Bharti Airtel, Tech Mahindra, Bharat Petroleum and Reliance Industries were among those that traded in the red.
Factors driving markets
Inflation transitory?: Minneapolis Federal Reserve Bank President Neel Kashkari said on Sunday he expects higher inflation continuing over the next few months but warned that the US central bank should not overreact to elevated inflation as it is likely to be temporary.
Dollar on a high: The dollar hovered below an almost 16-month high versus major peers on Monday, as traders awaited fresh clues on the US economy after bringing forward last week bets for a Federal Reserve interest rate hike on the back of red-hot inflation.
Broader markets
Broader market indices were trading higher, trading in-line with their headline peers in morning trade. Nifty Smallcap was up 0.31 per cent while Nifty Midcap advanced 0.33 per cent. The broadest index on NSE, the Nifty 500 was up 0.49 per cent.
Fortis Healthcare, Trent, Escorts, Thyrocare Technologies, Tanla Platforms and CDSL were gainers from the space while Granules India, Dilip Buildcon, Avanti Feeds, Manappuram Finance, M&M Financial Services and Endurance Technologies were under selling pressure.
Global markets
Chinese blue chips were steady on the data, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent, after popping higher late last week.
Japan’s Nikkei gained 0.5 per cent as data showing economic activity shrank by more than expected in the third quarter only reinforced the case for aggressive fiscal stimulus.
S&P 500 futures firmed 0.1 per cent in early trade on Monday, while Nasdaq futures added 0.2 per cent.
