BackMarkets scale fresh record high amid global investors anxiety
The BSE Sensex ended at 45,426.97, up 347.42 points or 0.77% while the Nifty closed at 13,355.75, up 97.20 points or 0.73%The lack of progress in Brexit talks dented hopes that UK and EU negotiators would be able to strike a trade deal before the deadline, depressing sentiment across markets
PremiumMarkets started the week on a positive note as covid-19 vaccine progress boosted sentiment amid subdued global equities. Gaining nearly 1%, both the benchmark indices ended at fresh record highs on Monday. The BSE Sensex ended at 45,426.97, up 347.42 points or 0.77% while the Nifty closed at 13,355.75, up 97.20 points or 0.73%.
Global peers were wobbly as growing worries of a no-deal Brexit hit the pound hard and fresh US-China tensions offset bets over more stimulus in Europe and the United States. The lack of progress in Brexit talks dented hopes that UK and EU negotiators would be able to strike a trade deal before a looming year-end deadline, depressing sentiment across markets. Markets in other Asian region dragged on a Reuters report that Washington was preparing sanctions on Chinese officials over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong. Markets in China, Japan, Taiwan and Hong Kong were down.
“Global cues were weak as rising tension between the US and China dampened sentiments. Investors were also worried as continued surge in coronavirus cases globally has forced a series of renewed lockdowns, including strict new measures in Southern California in the US. On the domestic side, progress on the covid vaccine led to the extension of the rally despite weak global cues. Serum Institute of India said it had made the first formal application for emergency use approval for AstraZeneca COVID-19 vaccine. Daily virus cases in India have stayed below 50,000 for a month, despite a busy festival season, which is adding to the positivity," said Siddhartha Khemka, head retail research, Motilal Oswal Financial Services Ltd
Analysts, however, expect domestic markets to stay firm on slew of factors like Reserve Bank of India’ growth push, vaccine progress, economic recovery and strong foreign institutional investors inflows.
“We believe positive progress on covid-19 vaccination and RBI’s strong commitment to support economy recovery are supporting market rally. Further, increased visibility of fiscal stimulus in the USA with weak dollar may continue to attract FPIs into emerging markets including India. However, threat to sharp earnings growth emerging from sharp rise in input costs may play a spoilsport in the near to medium term. As current valuations require very high earnings growth, we remain cautiously optimistic about the market and advice investors to focus on quality names with high margins of safety," Binod Modi, head strategy, Reliance Securities said.
Indian markets have been making new highs on strong foreign money, better-than-expected corporate earnings in September quarter, and festive season trends suggesting that rebound in demand recovery. With a record net inflow of $9.55 billion into Indian shares in November, FIIs are net buyers of Indian equities of more than $16 billion this year so far. Domestic institutional investors have been consistently dumping shares, selling shares of a record R48,319.17 crore in November.
(Reuters contributed to the story)
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
