31276In view of reduced inflation and expenses, will it be right to invest in IT stocks?
The country on Thursday reported a massive surge of 379,257 Covid cases and 3,645 deaths, thus marking the biggest single-day spike ever, according to MoHFW.
Investors’ wealth increased by Rs 8.38 lakh crore during the four consecutive days of a rally in the domestic equity market despite rising Covid infections in India. The benchmark BSE Sensex jumped 2,368 points, or 5%, to 50,246 at around 9.40 am (IST) on April 29 from 47,878.45 on April 23. The market capitalisation of BSE-listed firms spiked to Rs 210.75 lakh crore from Rs 202.37 lakh crore during the same period.
Likewise, the 50-share Nifty index advanced 673 points, or 4.69%, to 15,013. The country on Thursday reported a massive surge of 379,257 Covid cases and 3,645 deaths, thus marking the biggest single-day spike ever, according to MoHFW.
With a rally of over 10%, Bajaj Finance emerged as top gainers in the Nifty pack. It was followed by IndusInd Bank, ICICI Bank, Eicher Motors, State Bank of India, Bajaj Auto and Bajaj Finance which gained over 5% since April 23.
Why is Dalal Street ignoring rising Covid cases?
Going with market watchers, optimism over Covid vaccine and strong Q4 results have boosted investors’ sentiment in the recent past.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “The resilience of the market amidst the gloomy pandemic-related news has taken most market players by surprise. The favourable global market scenario is playing an important role in this vaccine-powered hope trade. The FOMC meeting, as expected, has kept rates and the bond-buying program unchanged, reiterating the accommodative stance. Sustained bond-buying has the risk of higher asset price inflation and froth in the market.”
He further added that the localised lockdowns and curfews have not impacted industrial activity much but there is a downside risk to GDP growth and earnings estimates. The pain in segments like aviation, hotels, restaurants and retail trade will linger for some time.
On the other hand, S Hariharan, Head-Sales Trading, Emkay Global Financial Services said, “Market sentiment has been boosted by a set of strong results and continuing strong momentum in global markets, which has overshadowed concerns over economic activity arising from renewed lockdowns and the second wave of Covid-19 infections. Midcap outperformance, which is a theme that has been in play for the last 6 months, continues to play out. Barring any further widespread impact of covid infections and resultant lockdowns in Tier 2 and Tier 3 cities, Nifty can be expected to trade towards its life high in May.’’