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Domestic benchmark equity indices opened with a gap up on Wednesday tracking Asian peers that were trading after technology shares led U.S. equities to their biggest rally in nine months as traders bet the omicron Covid variant won’t stall the global recovery. Treasuries extended declines. In opening trades, Sensex zoomed 729 points or 1.26% to 58,362 while Nifty was quoting at 17,387 surging 210 points or 1.23%.

“10% correction from the peak in a raging bull market provides good buying opportunities particularly when the global equity backdrop is ‘risk-on.’ This favorable setting continues with the strong rally in the mother market, US, yesterday. However, since FIIs continue to be in the sell-mode, markets may come under selling pressure at higher levels. Dr Antony Fauci’s observation that the Omicron variant is unlikely to be more severe than the Delta variant removes the market concern regarding the economic impact of the Omicron variant,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Monetary policy announcement today is unlikely to be market-moving since the MPC is likely to retain the status quo on policy stance and rates. IT & banking are resilient even though vulnerable to FII selling in the short run. Telecom leaders appear strongly positioned for growth in the near duopoly market, added Vijayakumar.

Top gainers & losers

Top gainers & losers on the Sensex.

Sectoral strand

On the sectoral front, all indices opened with gains. Nifty IT index was leading from the front advancing 1.93%, followed by the Nifty Media index gaining 1.77%, Nifty Realty jumped 1.35% and the Nifty Bank index jumped 1.20% ahead of RBI’s MPC announcement.  Nifty Metal, Nifty Auto, Nifty FMCG and Nifty Pharma indices rose in the range of 0.35-1.06%.

The volatility gauge India VIX cooled off by 7.90% to 17 levels.

Broader markets

Even the broader markets were trading with huge gains with the BSE MidCap index jumped 241 points or 0.96% to 25,402 while the BSE SmallCap index is quoting at 28,703 up by 345 points or 1.22%.

The market breadth was in the favour of the bulls as 2,085 shares advanced, 506 declined and 87 remained unchanged.

Global markets

Overseas, Asian stocks are trading higher on Wednesday, continuing a global relief rally as markets found positive news in early reports about the potential impact of the Omicron variant.

Japan’s economy in the July-September period contracted deeper than initially estimated last quarter amid a summer surge in Covid-19 cases that triggered emergency restrictions. Japan’s economy in the July-September period shrank an annualized real 3.6% from the previous quarter, downgraded from the 3% contraction initially reported, government data showed Wednesday.

British drugmaker GSK reportedly said on Tuesday its antibody-based COVID-19 therapy with U.S. partner Vir Biotechnology is effective against all mutations of the new Omicron coronavirus variant.

US stocks jumped for a second day, continuing their rebound from a recent rough patch, as investors grew less fearful of the potential economic impact from the new omicron coronavirus variant.

The US trade deficit narrowed sharply in October as exports soared to a record high, potentially setting up trade to contribute to economic growth this quarter for the first time in more than a year. The commerce department said on Tuesday that the trade gap plunged 17.6% to $67.1 billion.

The House passed a bill that would allow the Senate to raise the debt ceiling with a simple majority vote. The U.S. is expected to hit its debt ceiling around December 15, which raises the threat of a default. Once the legislation gets through the Senate and to President Joe Biden’s desk, Congress can hold separate votes to increase the U.S. borrowing limit.