While the market opened with hefty gains after US President Joe Biden played down concerns over the new COVID-19 variant, it evaporated after Moderna’s chief raised doubts over vaccines’ effectiveness against the new variant.
However, bargain hunters were out and about on Dalal Street and stopped by at their favourite counter – information technology stocks. IT stocks such as Infosys, Tata Consultancy Services, and HCL Tech were among the biggest contributors to the benchmark’s gains.
Any correction in the sector has proven to be an opportunity to generate more returns given the stellar tailwind the sector is experiencing despite staffing challenges. The strong growth outlook for IT companies means on every correction, dip buyers will raid the counter. The Nifty IT index, therefore, ended 0.5 per cent higher.
Metals are in trouble
On a day when the entire market is being painted in the green colour of relief, metal stocks are dipped in the red colour of disappointment.
The Nifty Metal index fell 1.9 per cent to have the dubious honour of being the only sectoral loser on the National Stock Exchange. However, there isn’t much to celebrate in the sector after the stellar run of the past year.
Demand is in question due to slowing China and a new variant, price hikes are in doubt due to muted domestic demand and slumping global steel prices and investor appetite is low given the sense that these stocks are too expensive for their own good.
IRCTC gets a lending hand
The frenzy on the counter of Indian Railways Catering and Transportation Corporation has long ended. However, the counter saw renewed interest from punters hoping to capitalize on the impending buying from foreign portfolio investors.
IRCTC’s upgrade to midcap from smallcap during the recently concluded MSCI semi-annual review means that the stock got inflows of more than $100 million in the last half an hour of trade. Traders bought the stock earlier in the day in the hope to offload it to the foreign exchange-traded funds that would be buying the stock towards the close of trade.
Clearly, the gains in the stock are driven by technicality given that on the fundamental level things are turning foggy due to the emergence of the new COVID-19 variant.
