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Taking cues from global markets domestic benchmark equity indices did a gap up opening on hopes that the global economic recovery can weather the omicron virus variant as well as tighter central bank policies to fight elevated inflation. In opening trades, Sensex zoomed 354 points or 0.60% regaining 59,000-mark at 59,141 while Nifty was quoting at 17,625 surging 113 points or 0.65%.
“Despite the 39-year high CPI inflation print of 6.8% in November, the US market rallied and the 10-year bond yield stabilised. This expected macro data didn’t impact the market. However, the message from the meetings of the Fed, ECB, Bank of England and Bank of Japan expected this week will give clues about the medium term trajectory of interest rates, bond yields and markets. The sharp rise in Omicron cases in UK is a concern,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
In India, the relentless selling by FPIs ( Rs 33799 cr in November and Rs 17644 cr up to 10th December) has been a major headwind for the market, particularly for banking stocks. But sustained FPI selling is not having any significant impact on the market other than putting a cap on the upside of the rally. The high earnings visibility of financials, IT and construction-related stocks is encouraging DII and retail buying in these segments, Vijayakumar added.
Top gainers & losers
Top gainers & losers on the Sensex.
Sectoral strand
On the sectoral front, barring Nifty Media (down 1.15%) all other indices were trading with strong gains. The Nifty Metal index was shining brightly as it advanced 1.35%, followed by Nifty Bank and Nifty IT indices rallied 1.23% each and Nifty Auto rose 1.03%.
That apart Nifty Realty, Nifty Pharma and Nifty FMCG indices were up anywhere between 0.35-0.60%. The volatility gauge also cooled off by 2% to 15.73 levels.
Broader markets
Mirroring gains in the benchmark indices broader markets also rallied. BSE MidCap gained 166 points or 0.65% to 25,873. Whereas the BSE SmallCap index was quoting at 29,482 higher by 310 points or 1.06%.
Bulls had a tight grip on the markets as 2,254 shares advanced compared to 753 declining while 139 remained unchanged.
Global markets
Overseas, Asian stocks are trading higher on Monday, with investors looking ahead to a week of central bank meetings that could indicate the end of U.S. policy stimulus.
Investors now await the Federal Reserve’s policy decision, due on Wednesday. The Fed is among the 20 central banks due to meet throughout the week, with the group also including the European Central Bank, the Bank of England and the Bank of Japan.
On Friday, data showed US consumer prices continued to surge in November, climbing 6.8% compared to the same month in 2020, the biggest jump since June 1982.
Wall Street advanced on Friday and the S&P 500 notched an all-time closing high as market participants digested an inflation reading that was in line with consensus, but also marked the largest annual increase in consumer prices in nearly four decades.
Geopolitical tensions are on the rise after the Group of Seven reportedly warned Russia on Sunday to de-escalate its activities around Ukraine or face “massive consequences.”
In the U.K., the government raised the coronavirus threat level Sunday and warned the rapid spread of the omicron strain pushed the country into risky territory, as per reports. Prime Minister Boris Johnson reportedly said the U.K. faces a “tidal wave” of Covid cases caused by the new variant.