Jenet Yellen is batting for a huge stimulus to kickstart the virus-battered US economy, which if comes will lead to an unprecedented money supply in the system. Gains in Asian markets also boosted the morale of the investors.
“An important feature of yesterday’s sharp rally of 240 points in Nifty was that it was not triggered by high FII buying. The net institutional buying (FII buying minus DII selling) was only Rs 50 crores. This means the rally was triggered more by short-covering by the cornered bears. However, the sustained delivery buying in large-caps like RIL, HDFC Bank and HDFC indicate strong interest and accumulation in bluechip large-caps,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The important message to look out for today would be the economic message from the newly installed President Biden. Early Q3 results indicate a continuation of the better than expected results.”
Factors driving markets
- Dollar drops: The dollar dropped for a second straight session on Tuesday, while most US Treasury yields fell after Yellen commented in her hearing that tax cuts enacted in 2017 for large corporations should be repealed.
- Biden takes oath: President-elect Joe Biden will be sworn into office on Wednesday and investors will be focused on his $1.9 trillion stimulus package proposal to boost the economy and speed up the distribution of vaccines.
- Recovery on the way: Bank of England chief economist Andy Haldane said on Tuesday that he expected Britain’s economy to begin to recover “at a rate of knots” from the second quarter of this year, as vaccines against Covid-19 are rolled out.
How are bluechips doing
After opening in the green, benchmark indices strengthened their lead. At 10.00 am, BSE flagship Sensex was up 205 points or 0.42 per cent to 49,603. NSE benchmark Nifty followed and rose 60 points or 0.41 per cent to 14,580.
“We are trading above the 14,550 level which is a resistance point for the Nifty. If we can keep above this, our next target should be 14,750-14,800. Given the strong undercurrent we can possibly stretch towards 15,000 too. A strong support now lies at 14,200 and hence any dip or correction can be utilised to enter the index for higher targets,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, Tata Motors was the biggest gainer, up 3.85 per cent. Wipro, Tech Mahindra, HCL Tech, Eicher Motors, Infosys, TCS, Divi’s Labs and Tata Steel were among other gainers.
Grasim Industries was the top loser in the pack, down 1.46 per cent. Shree Cement, GAIL, NTPC, Power Grid, BPCL, ITC, IndusInd Bank and Hindalco were other losers in the pack.
Broader markets
Broader market indices traded with gains in-line with their headline peers in the morning trade. Nifty Smallcap added 0.76 per cent while Nifty Midcap climbed 0.33 per cent. Broadest index on NSE, Nifty 500 was up 0.37 per cent.
Tata Elxsi, PNB Housing, Laurus Labs, Coforge, L&T Tech Services and Varun Beverages were among major gainers from the space while L&T Financial Holdings, Alembic Pharma, IB Housing Finance, Trident, CSB Bank and Vakrangee were under selling pressure.
Global markets
MSCI’s Asia-Pacific index outside Japan rose 0.95 per cent, reaching its highest level ever.
Hong Kong’s Hang Seng rose 1.0 per cent to approach its 2019 peak while Australian shares added 0.6 per cent to reach an all-time high. Japan’s Nikkei, however, slipped 0.45 per cent on profit-taking. The US Nasdaq futures gained 0.4 per cent.
