Rising for the ninth straight session, the Sensex closed above the 48,000-mark for the first time on Monday as the investor sentiment received a boost after the government approved two coronavirus vaccines. Strong global cues also helped propel the markets higher. The Sensex rallied by 307.82 points (0.64%) to close at 48,176.8 while the Nifty jumped 114.4 points (0.82%) to close at 14,132.9.
Robust buying in IT, metal and automobile stocks drove the markets. IT stocks were rallying in anticipation of robust third quarter results. According to Edelweiss Securities, Q3 results of IT companies would reinforce their ‘bottom of tech upcycle’ thesis. The markets also rallied over the positive sentiment among investors after the Centre granted emergency approval to two Covid-19 vaccines.
Market experts believe that ‘quality’ and ‘growth’ would be the stock themes for the rest of the year. Additionally, the markets will react to the Budget.
Navin Kulkarni, chief investment officer, Axis Securities, said: “The focus will be on the BFSI sector and management commentary on the stress challenges. Apart from Q3 earnings, the Union Budget will be an important event.”
Foreign portfolio investors on Friday bought stocks worth $67.4 million and domestic institutional investors bought stocks worth $9.2 million. The calendar year 2020 saw foreign fund inflows worth $23.3 billion, the highest since 2012.
Foreign brokerages have started the year with a bullish view on the Nifty50 index. A positive global backdrop, along with the anticipation of a cyclical recovery, has helped them retain a bullish view on the Indian markets. Jefferies said, “December 2021 Nifty target of 15,800 offers a total return of 14%. Our favourite (bond yield – earnings yield) metric shows that the valuation is close to averages.”
Foreign markets too rallied on Monday. The markets in Germany, France and the UK were up between 1.65% and 2.7% in early trade. The markets in China, Taiwan and South Korea were up between 0.86% and 2.47%. The markets rallied in the hopes of a strong recovery in 2021. Additionally, the European markets soared after the Brexit deal was confirmed.
The futures and options segment saw a turnover worth Rs 24.11 lakh crore and the cash market segment witnessed a turnover worth Rs 63,621.86 crore. This is against the six-month average of Rs 24.1 lakh crore in the F&O segment and Rs 54,497 crore in the cash market.
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