The steady decline in fresh Covid cases and rising recovery rates indicate that India is succeeding in bending the Covid curve. This has paved the way for progressive unlocking and consequently unlock trade is happening in the broader market, said an analyst.
“With such outperformance, valuations in the broader market too are becoming a concern. With no short-term risks to the market, consolidation is likely in the near term with a stock-specific action in response to the news. Since markets are overbought and overvalued, investors should exercise caution even when the markets are exhibiting surprising resilience,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing?
After opening in the red, benchmark indices fell further. At 9.31 am, the BSE flagship Sensex was down 248 points or 0.48 per cent to 51,687. The NSE benchmark Nifty dropped 67 points or 0.44 per cent to 15,506.
In the 50-share pack Nifty, Adani Ports was the biggest gainer, up 2.36 per cent. , Coal India, Cipla, , NTPC, Eicher Motors, Power Grid and Shree Cements were among other gainers.
Tech Mahindra was the top loser in the pack, down 3.10 per cent. ITC, HDFC, Wipro, HCL Tech, Kotak Mahindra Bank, Grasim Industries, ICICI Bank and TCS were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
Covid pressure eases: After the mayhem of May, India began the month of June on a hopeful note with just a little over 1.25 lakh new Covid infections on Tuesday. The number of deaths also came down below the 3,000-mark at 2,795 fatalities, the official data said.
Bad news
Yields rise: The US 10-year Treasury yield rose to a more than one-week high overnight, which may lead to fund outflow from emerging markets like India.
Europe inflation: Euro zone inflation surged past the European Central Bank’s elusive target in May, heightening a communications challenge for policymakers. Higher inflation is compounding the plight of savers and the ECB should respond by raising its interest rates from 0 per cent, Bavaria’s Finance Minister Albert Fueracker told daily Bild in comments published on Wednesday.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.41 per cent, while Nifty Midcap advanced 0.60 per cent. Broadest index on NSE, Nifty500 fell 0.08 per cent.
Gujarat Gas, Adani Total Gas, Emami, Sterling Wilson Solar, Route Mobile and Welspun India were gainers from the space, while IRCON International, SpiceJet, Avanti Feeds, Mindtree, Dalmia Bharat and Mphasis were under selling pressure.
Global markets
MSCI’s gauge of stocks across the globe was flat after setting a record intraday high and close on Tuesday. Its broadest index of Asia-Pacific shares outside Japan ticked 0.08 per cent higher, and Japan’s Nikkei added 0.36 per cent.
Seoul’s Kospi gained 0.36 per cent and Australian shares rose 0.64 per cent.
Chinese blue-chips lagged as healthcare firms dropped a day after the sector was lifted by China’s announcement of a third-child policy.
