Sensex up 127 points, Nifty nears 17,200; pharma & auto stocks zoom

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Domestic benchmark equity indices opened flat ignoring the fall in Asian stocks on Thursday after a sharp reversal in U.S. shares on concerns about risks from the omicron virus strain and as Jerome Powell reiterated a pivot toward potentially tapering stimulus more quickly. In opening trades, Sensex rose 127 points or 0.22% to 57,811 while the Nifty 50 was trading at 17,187 up by 21 points or 0.12%.

“In the short run, we are in unchartered territory. Improving macros – GDP growth, GST collections, PMI – augur well for markets while rising inflation and its impact on monetary policy normalisation are concerns. Even after around 10 % correction from the peak, valuations in India are not compelling and, therefore, investors need not rush to buy on declines. It would be prudent to wait till clarity emerges about Omicron and its impact,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Gainers & losers

Sectoral strand

Sectoral indices opened mixed on the NSE with the Nifty Pharma index rallied 0.67% followed by Nifty Auto surging 0.62%. While Nifty IT, Nifty Realty, Nifty Metal and Nifty FMCG indices gained anywhere between 0.06-0.65%.

On the downside, the Nifty Bank index slipped 0.15% and Nifty PSU Bank was down 0.13%.

Broader markets

Broader markets replicated gains in benchmark indices. The BSE MidCap is up 112 points or 0.45% to 25,047 while the BSE SmallCap was quoting at 28,066 rallying 115 points or 0.41%.

Bulls had an upper hand in the market as 1,602 shares advanced compared to 651 declining and 71 remained unchanged.

Economy

India’s merchandise exports in November rose by 26.49% to $29.88 billion on account of healthy growth in sectors such as engineering, petroleum, chemicals and marine products, according to provisional data released by the government on Wednesday. The exports stood at $23.62 billion in November 2020.

Imports in November were at $53.15 billion, an increase of 57.18% over $33.81 billion in the same month of 2020, leaving a trade deficit of $23.27 billion.

Global markets

Stocks in Asia-Pacific struggled for direction in Thursday trade as concerns over the economic impact of the omicron Covid variant continue to weigh on investor sentiment.

Wall Street’s major averages fell more than 1% on Wednesday after a morning rally faded as investor angst about the latest coronavirus variant soared with the first U.S. case confirmation while the market also digested US Fed’s comments on inflation.

Meanwhile, US Fed Chairman Jerome Powell said that he expects policymakers to discuss the possibility of a faster taper schedule at the meeting this month.

OECD said in its updated economic outlook which warns that low vaccination areas could create “breeding grounds” for deadlier virus mutations.