Sensex regains 59,000-mark, Nifty jumps 83 points; PSU banks, pharma & metals rally

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Domestic benchmark equities indices opened with a gap up as market participants would react to Merck announcement after its new Covid oral antiviral treatment that cuts the risk of hospitalization or death. Investors will also be closely tracking the Evergrande situation as trading in the Hong Kong-listed shares were halted. In opening trades Sensex adds 277 points or 0.47% to 59,042 while the Nifty 50 was trading at 17,615 higher by 83 points or 0.48%.

“The dollar index slipping to 94.05 and the US 10-year yield slipping below 1.5% can be interpreted as indicative of the return of risk-on in equity markets. But news from China can turn out to be a drag. China is trying to limit the damage to its real estate sector without bailing out Evergrande. An inevitable consequence will be a slowdown of the Chinese economy which will have implications for commodity prices and currencies of commodity exporters,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Back home, India’s exports are booming and are inline to touch the $400 billion mark in FY22. However, the surge in the trade deficit is weakening the INR. The IT segment is likely to be back in focus. Commodities, particularly metals, may come under pressure, added Vijayakumar.

Gainers & losers

Sectoral strand

Barring Nifty FMCG (down 0.06%) all other sectoral indices opened in the green on the NSE. Nifty PSU Bank advanced 1.05%, Nifty Pharma & Nifty Metal rose 0.90% each. Nifty Realty index gained 0.89% while Nifty Bank, Nifty Auto, Nifty IT and Nifty Media indices were up in the range of 0.14-0.70%.

Broader markets

Broader markets outperformed benchmark indices as the BSE MidCap index opened at 25,384 up by 160 points or 0.63% while the BSE SmallCap index advanced 252 points or 0.90% to 28,468.

The market breadth remained positive as 1,910 shares advanced compared to 440 declined while 121 remained unchanged.

Global markets

Overseas, Asian stocks are trading mixed on Monday after Merck announced its new Covid oral antiviral treatment that cuts the risk of hospitalization or death. Markets in China are closed for most of this week for a holiday and are set to reopen on Friday. South Korean markets are also closed on Monday for a holiday.

Trading in the Hong Kong-listed shares of China Evergrande was halted on Monday as investors continue to monitor the situation surrounding the indebted developer. The property giant has missed two bond interest payments in the past weeks.

Merck and Ridgeback Biotherapeutics announced Friday they’ve developed a drug which reduces the risk of hospitalization or death by around 50% in Covid patients. If authorized by regulatory bodies, the drug could be the first oral antiviral medicine for Covid. The companies plan to seek emergency authorization for the antiviral Covid treatment after the medicine showed “compelling results” in clinical trials.

Wall Street stocks surged to a higher close on Friday boosted by positive economic data, progress in the battle against COVID, and Washington developments on the potential passage of an infrastructure bill.