Indian stocks end higher again as risk appetite increases
11:07, 2 December 2021
Indian equity indices advanced for a second day on Thursday, boosted as investors set aside concerns over the spread of the Omicron coronavirus variant.
Adani Ports, part of the ports-to-power conglomerate, led gains among the index constituents, with a 4.4% rise to INR739.1 ($9.85), followed by India’s largest home mortgager, Housing Development & Finance Corp, which was 3.85% higher. Power Grid Corp of India and Tech Mahindra both reached their highest level in a year after surging 3.5% and 2.6% respectively. Drug major Cipla, however, fell for a second straight day, with its 0.7% fall the biggest among the indices. Private sector lenders ICICI Bank and Axis Bank also weakened today.
The National Stock Exchange’s 50-share Nifty50 index finished 1.37% higher at 17,401.6 points, while the S&P BSE 30-share Sensex surged 1.35% to close at 58,461.2 points. The NSE’s advance-decline ratio – a popular tool in measuring the breadth of the broad market – stood at 1,296 to 534.
All sectors rise
“Irrespective of the weak sentiments in the international markets, domestic indices continued to rise due to gains in software, financials and metal stocks amid strong domestic macroeconomic data. The Fed chair’s remarks stating a possibility of a faster end to the bond-buying programme and interest rate hike, along with the first confirmed case of the Omicron variant in the US, triggered a fresh global sell-off. The federal government’s fiscal deficit of 36.3% of budget estimates in October is better, owing to improved revenue collection,” said Vinod Nair, head of research at Geojit Financial Services in Mumbai.
All the sectoral indices ended in the positive zone today, reflecting the wider breadth of gains in the market. The software shares index led the increases, with a 2.06% rise, while the banks’ share index rose only 0.39%. The volatility index weakened 6.9% to 18.08 points.
“The Nifty closed above its resistance range of 17,250-17,350 at 17,410, up by 240 points since yesterday’s close with good volumes. We may see the Nifty heading towards its next resistance zone of 17,600-17,670 in the next few trading sessions. Traders can consider a buy on dips with a strict stoploss. Any closing below 17,250 may reverse the trend,” said Gaurav Udani, chief executive officer at ThincRedBlu Securities.
Investors shrugged aside the sell-off in the US markets overnight as risk appetite increased. US markets fell on Wednesday on concerns the risks from the Omicron virus strain may intensify and also as Fed chair Jerome Powell’s remarks suggested a tapering stimulus faster than anticipated.
“Bulls held the upper hand today as indices sprinted over a percentage led by the software shares index during afternoon trade. As the volatility index cooled off today, we witnessed stock-specific action across sectors in the broader markets buoyed by tax and GDP data, together with cooling energy prices. Advance-declines showed a marked improvement today, with most of the sectoral indices ending in the green,” said S Ranganathan, head of research at LKP Securities.
Stock in Skipper Limited, a manufacturer of transmission and distribution structures, soared today after the company said it has secured a fresh new order of INR3bn ($40m) for transmission and telecom towers from Power Grid Corporation of India. The shares ended 16.3% higher at INR78.1.
Bharat Dynamics said it has signed a contract with the Indian Army for a contract worth INR4.7bn for the refurbishment of missiles, helping its stock to rise 3.57% to INR426.8.
Stock in India’s largest fabric and fashion retailer, Raymond Limited, ended lower after the company said it is planning to list its material subsidiary JK Files & Engineering. The firm plans to raise over INR8bn through an initial share sale. The stock closed 3.3% weaker at INR615.5.
Shares of two-wheeler major Hero MotoCorp touched a 52-week low of INR2,409, after the company posted weak sales numbers for November. It sold 349,393 units during the month, down from 591,091 units a year ago, a 40.89% fall.
“We may see a further rebound in the Nifty index, however the 17,550-17,600 zone would be difficult to cross. Participants should focus on the pockets that are showing strength and choose the stocks accordingly. Among the sectors, IT looks strongest and seeing noticeable traction, while others are showing a mixed trend,” said Ajit Mishra, vice president for research at Religare Broking Ltd.
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