Indian stock markets close high even after choppy trade
Indian stocks completed weekly gains closing high on Friday as concerns over rising Omicron cases across the world were assuaged by positive macroeconomic data from the US.
The Bombay Stock Exchange’s 30-share Sensitive Index, or Sensex, ended 2.3% higher at 57,147.63 points from its previous close a week ago. The most-traded National Stock Exchange’s (NSE) Nifty50 index closed at 17,008 points or 2.3% stronger from its close a week ago.
Ten out of the 11 sectoral indices ended in the negative territory, a reversal from the trend yesterday, with the Nifty PSU Bank index falling as much as 1.94% and the Nifty Realty index weakening 1.48%.
The advance-decline share ratio – the number of advancing shares divided by the number of declining shares – on the NSE was 749-1,281 today. India VIX, the index that measures volatility in the market, today surged 2.03% to 16.14.
Trimming early gains
“A range-bound day of trading ahead of Christmas to end the week as this month quite clearly belonged to the software sector which stood tall amidst extreme volatility as cost-push inflation across sectors is keeping street worried on the impact in the hands of the consumer,” said S Ranganathan, head of research at LKP Securities.
Indices ended lower in the day as gains of the past three days were trimmed due to profit sales. The Sensex ended 0.33% weaker from its previous close and the Nifty50 index was 0.38% lower.
“Weighed by muted global markets and continued foreign investors’ selling, domestic indices erased its mid-day gains to slip into red led by selling pressure in index heavyweights. The markets remain highly volatile amid rising omicron cases, higher monetary policies and inflationary woes,” said Vinod Nair, head of research at Geojit Financial Services.
Biggest deal, new listing
“While buoyancy in exports and tax collections coupled with the success of the PLI (production-linked incentive) schemes are positives, there are many sectors where consolidation is waiting to happen which is where longer-term investors need to focus in the present corrective phase,” Ranganathan added.
In one of the biggest deals in the Indian mutual fund industry, L&T Finance Holdings entered into an agreement to sell 100% equity shares of its wholly-owned mutual funds arm L&T Investment Management to its rival HSBC Asset Management (India) for $425m.
Shares of L&T Finance Holdings ended 6.66% lower at INR77.1 on the National Stock Exchange before noon.
The defence and aerospace electronics solutions provider Data Pattern’s shares made a stellar trading debut at INR856, a 46% premium to the issue price of INR585.
The company’s issue earlier this month got subscribed 120 times indicating strong demand for the company. The stock ended 29% higher at INR755.
Concerns over Omicron
The spread of the coronavirus variant Omicron weighed on the market sentiment since its discovery last month. The spread of the variant has been a concern even as the UK reported nearly 100,000 cases daily earlier this week.
Cases of the new variant have been detected in 17 provinces with Maharashtra recording 88, the highest number of cases among states followed by Delhi where 67 cases have been recorded so far, according to the health bulletin issued by the ministry.
According to Deepak Jasani, head of retail research at HDFC Securities, Asian stocks were mixed on Friday after failing to harness a tailwind from the US and European shares last evening which were nominally higher amid expectations that the Omicron variant won’t derail the economic recovery.
“After a three-day rise, the Nifty expectedly corrected, though it did not close at the intra-day low. A move below today’s low could result in a faster fall in the coming week which also may see low volumes as most institutional players are on year-end leave. However, a breach of 17118-17155 on the upside could result in better momentum on the upside,” Jasani added.