Domestic benchmark equity indices opened gap up on Tuesday tracking Asia peers that were trading higher after U.S. equities rebounded and China pledged measures to support slowing economic growth. In opening trades, Sensex zoomed 403 points or 0.71% to 57,150 while the Nifty recouped 17,000 and was quoting at 17,044 surging by 127 points or 0.76%.
“Medium to long-term investors can use the present correction to buy stocks in select segments. The main trigger for the correction of around 10% from the peak has been the relentless selling by FIIs. FIIs sold equity worth Rs 33799 cr in November. In December up to 6th FII selling is Rs 11222 cr. Since bank stocks constitute the largest holding of FIIs ( Rs 818524 cr Assets Under Custody as on November 30th 2021) they have been selling bank stocks in spite of the fact that banking is doing well. The underperformance of bankng is bound to change since asset quality concerns have receded and credit growth is picking up. IT, which is in a multi-year upcycle, presents another good buying opportunity during this correction,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
On the sectoral front, the Nifty Metal index was shining bright with gains of 1.17%, followed by Nifty Realty index advanced 1.14%. Whereas Nifty Auto, Nifty Bank, Nifty IT & Nifty FMCG indices jumped anywhere between 0.70-1.05% while the Nifty Pharma index was up 0.35%.
The volatility index India VIX spiked by 8.79% to 20.07 levels.
The broader markets mirrored gains in the benchmark indices with the BSE MidCap index gaining 181 points or 0.73% up to 25,023 while the BSE SmallCap index was quoting at 28,309 up by 271 points or 0.97%.
Bulls had a tight grip on the markets as 1,886 stocks advanced compared to 436 declining and 68 remained unchanged.
Overseas, Asian stocks are trading higher on Tuesday, bouncing back from Monday losses as Wall Street rallied on optimism that the omicron variant risk might not be as bad as feared.
US stocks rallied on Monday as investors shook off fears around the emerging threat of the Covid omicron variant.
White House Chief Medical Advisor Dr. Anthony Fauci had reportedly said that the initial data on the omicron variant was “encouraging,” though he cautioned that more information was needed to fully understand it.
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