Markets made life high once again on Wednesday, driven by vaccine optimism. However, the Sensex could not hold gains at closing due to late sell-off. The 30-share index was down 14.77 points or 0.03% ending at 55,944.21. The Nifty closed at record high, up 10.05 points or 0.06% at 16,634.65.
Following rise in US markets, other Asia-Pacific region stocks were mixed Hong Kong’s Hang Seng index slipped 0.13% but the Shanghai composite in China jumped 0.74%.
Vinod Nair, Head of Research at Geojit Financial said, “Markets opened positively but main indices closed on a flattish note due to muted performance by large caps. The broad market higher, as midcaps bounced after the correction mode during the month, which lifted the morale of investors. The global market traded positive on covid vaccine approval and in anticipation of a dovish comment by the US Federal chair in the upcoming meeting.”
Analysts also attribute World Health Organization’s (WHO) comments on covid spread in India to boost investor sentiment.
India might be entering the endemic stage of the coronavirus pandemic (Covid-19), chief scientist of the World Health Organization (WHO), Soumya Swaminathan said on Wednesday. The senior official said this particular stage will be marked by low or moderate levels of transmission, with no peak as witnessed during the second wave.
According to S Hariharan, head-sales trading, Emkay Global Financial Services as with the last few weeks, markets breadth has continued to be subdued with large-caps meaningfully outperforming mid & small-caps. “While Retail segment long positioning has been coming down, FII net long positioning in single stock futures has gone up to nearly eight month highs. Narrow market breadth has tended in past instances to lead to pull-backs – however, extremely accommodative monetary conditions in India as well as globally, have provided conditions of extremely shallow corrections,” he said.
The enthusiasm in primary markets has also cooled off significantly with three out of the last four new listings opening below issue price despite strong over-subscription in the issues.
“This sets up a challenging prospect for the line-up of issues, amounting to ₹30000 crore over the coming month. We can expect extremely oversold conditions in small cap universe to ease, while broader markets continue to trade range-bound,” Hariharan added.
India volatility index or so called fear gauge rose 2.35% on Wednesday closing at 13.50.
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