Markets at new high on Covid-19 vaccine hope

Indian equities recovered smartly on Wednesday and ended the trading session with minor gains. The benchmark Nifty rose by 49.35 points (0.35%) to close at 13,981.95 whereas the Sensex rose by 133.14 points (0.28%) to close at 47,746.22. The markets rallied after they anticipated the approval of the Oxford-AstraZeneca Covid-19 vaccine in India. Indian markets ended the day at record highs once again.

The markets in the first half of the trading session were under pressure after the Reserve Bank of India (RBI) raised concerns over asset quality in the banks. Additionally, profit-taking by investors also kept the stock prices subdued. The markets rose sharply in the last hour of the trading session on Wednesday as investors cheered the approval of the Oxford- AstraZeneca Covid-19 vaccine in the United Kingdom and in anticipation that the same would take place in India.

European markets were trading flat with benchmarks in countries such as France, Germany, and the United Kingdom trading higher by 0.01% to 0.1% at the time of press. The Dow Jones mini futures were up by 82 points. Asian markets in South Korea, Taiwan and Hong Kong were up between 1.8% to 2.1% respectively. Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “Overall positive sentiments continue on the back of the fresh stimulus announced, Brexit deal and hopes that the ongoing vaccine rollout would bring better days in the coming year.”

Foreign portfolio investors (FPIs) bought stocks worth $6.5 billion till December 29, which is the second highest after November. Foreign inflows into the Indian markets have been the highest after China in the emerging market pack. In November according to a report by Kotak Institutional Equities, the Indian markets saw the highest total inflows when compared to emerging markets like Taiwan, South Korea, Indonesia and Thailand. According to the provisional data on the exchanges, FPIs bought stocks worth $243 million whereas, domestic institutional investors sold stocks worth $78.32 million. Kotak Institutional Equities in its report, said, “Allocations by Asia ex-Japan non-ETFs to India increased to 11.7% in November from 10.9% in October, while allocations to India by GEM non-ETFs increased to 9.9% in November from 9.7% in October.”

The futures and options segment saw a turnover worth Rs 30.8 lakh crore whereas, the cash market saw a turnover worth Rs 51,362.52 crore. This is against the six month average of Rs 21.7 lakh crore in the futures and options segment as well as Rs 59,316 crore in the cash market segment. The biggest gainers on the Nifty were Ultratech Cement Company, Grasim, Shree Cement, Bajaj Finance, and Eicher Motors up by 4.4%, 3%, 2.98%, 2.59%, and 2.46%. The biggest losers on the Nifty were IndusInd Bank, Sun Pharmaceuticals, Axis Bank, SBI, and Bharti Airtel down by 1.47%, 1.1%, 1%, 0.86%, and 0.82%.