Indian Equities opened gap up and witnessed a rally towards new lifetime high supported by positive global cues. Nifty/Sensex both made fresh lifetime high of 16,951.5/56,958.3 levels and finally settled with the gains of 226/765 points (1.4% each) at 16,931/56,890 levels. Broader market too mirrored the benchmark indices and Nifty midcap/ Nifty smallcap closed with gains of 1.9%/1.5% respectively.
Sectorally, except for IT all other sectors ended in green. Among sectors, Metals was the top gainer - up 2.5%, followed by PSU and Private Banks up 2% each. Financials, Auto, Realty, Pharma, Consumer Durables, Oil & Gas were up more than 1%. India Vix was marginally down by 0.65% at 13.32 levels.
Global cues were positive following the dovish tone of U.S. Federal Reserve Chairman Jerome Powell with regards to the withdrawal of stimulus measures. Sentiments were buoyant on hopes that continued support from central government would sustain economic recovery offsetting worries over rising Delta COVID-19 variant cases.
Oil prices dropped from a four-week high as Hurricane Ida weakened which had forced precautionary shutdowns of U.S. Gulf oil production. However, on the concerning side, China issued draft rules with tough new limits on gaming time for minors while EU is set to ban non-essential U.S. travel as Delta wave reaches new highs.
On the domestic front, taking cues from global peers, Indian indices opened gap up and ended near day’s high level. Except for IT all other sectors supported the indices to rally towards new high. Auto ancillaries gained following a report that Tesla is in talks with at least three companies to source critical parts for its planned entry into the country. On stock specific front, Bharti Airtel was top gainer- up 5.2% after the strong management commentary in its concall with regards to rights issue fund raising. Divis Lab, Axis Bank, Tata Steel and Coal India were other top gainers up in range of 3-4%. While TechM, Nestle, Eicher Motors, Infosys and Wipro were top laggards.
Commenting on the market outlook, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services opined, "Going ahead, market is likely to continue with its positive momentum as US Fed’s dovish statement has put investors worry to rest. Sentiments turned optimistic as Powell stressed that even if they start reducing asset purchases this year, it would not tighten monetary policy quickly. Now all attention will turn to an OPEC meeting due on Wednesday to discuss a further output boost.
Further, investors will keep watch on India’s GDP data that is due later this week along with Auto sales number that will start pouring in from Wednesday. However, rising Delta variant cases and poor monsoon does is a concern to the market. From the long-term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations. Hence, investors can take advantage of the current volatility and build their positions from the medium to long term perspective."
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