Stock markets hit fresh peak as vaccine hope surges

Indian stock markets ended yet another session with record gains on the prospects of another promising Covid-19 vaccine by US drug maker Moderna. The Nifty rose by 93.95 points (0.74%) to close at 12,874.2 whereas Sensex rose by 314.73 points (0.72%) to close at 43,952.71. What’s interesting is that the top gainers on the Nifty were Tata Motors and Tata Steel, both of which rallied after the announcement of their quarterly earnings.

The broader markets too, had a strong trading session with the Nifty Midcap 100 closing at its 52-week high up by 1.1%. The Nifty Smallcap was up by 0.26%. Analysts at Morgan Stanley expect the broader markets which is smallcaps and midcaps to beat the large caps in 2021. In its report, the foreign investment bank said, “We expect the broad market SMIDs (small and mid-caps) to beat the narrow indices or large caps in 2021 because we think concentration of market cap and profits may have peaked with the return of the growth cycle.”

The analysts in their report also stated that they had a target of 50,000 for Sensex in December 2021. Tata Steel rallied by 5.97% to close at `521.6 a piece, the Nifty Metal index too, was up by 2.49% outperforming the gains of the benchmark for the day’s trading session. The rally in metal stocks on Tuesday was because of the gains made by Tata Steel after it announced its quarterly numbers and the divestment of its profitable Netherlands business.

In its report, Edelweiss Securities stated that Tata Steel’s performance surpassed consensus because of lower than expected EBITDA loss of Tata Steel Europe, in line standalone EBITDA, reduction in net debt, and discussions about the divestment of Netherlands business to SSAB Sweden. “Going ahead, we expect performance to improve further due to higher spreads and better product mix. We will keep a close tab on developments pertaining to TSN divestment,” said Edelweiss Securities.

Also, strong global cues contributed to the rally in metal stocks. In November so far, the Nifty Metal index is up by 18.06%. In comparison, Nifty is up by 10.3% for the month.

The global markets were rallying after US-headquartered Moderna stated that its Covid-19 vaccine was 94.5% effective in preventing infection. The Asian markets in Hong Kong, Taiwan, and Japan closed the session higher by 0.1% to 0.2%. The European markets in France, Germany, and the United Kingdom were down by 0.3% to 1.1%. The Dow Jones mini futures at the time of press were down by 158 points.

Foreign portfolio investors (FPIs) have in November bought stocks worth $4.3 billion till November 16. The domestic institutional investors have during the same period sold equities worth Rs 19,767.1 crore. The futures and options segment on Tuesday saw a turnover worth Rs 19.18 lakh crore whereas, the cash market saw a turnover worth Rs 67,324 crore. This is against the six month average of Rs 19.2 lakh crore and Rs 52,327.79 crore, respectively.

The biggest gainers on Nifty were Tata Motors, Tata Steel, HDFC Life, SBI Life, and Adani Ports and SEZ up by 6.15%, 5.97%, 5.72%, 5.09%, and 3.36%. The biggest losers were BPCL, Hero Motocorp, NTPC, IOC, and ONGC down by 4.25%, 2.62%, 2.53%, 1.96%, and 1.93%