Sensex rallies 625 points, Nifty above 17,100; metal & realty stocks zoom
Nifty Metal index surged 1.22%, the Nifty Realty index jumped 1.16% and the Nifty Auto index rose 1.01%.
Domestic benchmark equity indices opened with a gap up on Wednesday tracking Asian peers that were trading higher following losses the day before that were triggered by renewed uncertainty on the omicron Covid variant. In opening trades, Sensex rallied 625 points or 1.1% to 57,690 while the Nifty was trading 17,138 higher by 155 points or 0.91%.
“The sell-off in US markets in response to the Fed chiefs observation on accelerating the taper has impacted sentiments. Now it is likely that the Fed may start to hike rates earlier than expected. Inflation in the Eurozone also is higher than expected and, therefore, the ECB is likely to follow the footsteps of the Fed,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
While these are negatives from a market perspective, the market direction is likely to be determined, in the short run, by news regarding the omicron variant. If it proves to be less worrisome as generally feared, the market may stage a strong comeback, since the risk appetite of retail investors and DIIs appear to be strong and valuations are becoming attractive in many segments like financials, Vijayakumar added.
Top gainers & losers
Top gainers & losers on the Sensex.
Sectoral strand
All sectoral indices on the NSE were trading with gains. The Nifty Metal index surged 1.22%, the Nifty Realty index jumped 1.16% and the Nifty Auto index rose 1.01%. While Nifty Bank, Nifty IT, Nifty FMCG and Nifty Pharma indices were up anywhere between 0.60-0.90%.
The volatility gauge India VIX cooled off by 8.53% to 19.36 levels.
Broader markets
Broader markets mirrored the gains in benchmarks indices as the BSE MidCap index gained 252 points or 1.02% to 28,176 while the BSE SmallCap was quoting at 28,176 up by 239 points or 0.86%.
The market breadth was also positive with 1,764 shares advancing while 492 declined and 74 remained unchanged.
Global markets
Overseas, most Asian stocks are trading higher on Wednesday, following losses the day before that were triggered by renewed uncertainty on the omicron Covid variant.
A private survey released Wednesday showed Chinese factory activity shrinking in November, with the Caixin/Markit manufacturing Purchasing Managers’ Index coming in at 49.9 for that month. That was a decline from October’s reading of 50.6.
US stocks tumbled Tuesday, reversing Monday’s rebound on Wall Street, as investors reassessed risks associated with the new Covid variant, omicron. Major averages dropped to their session lows after Federal Reserve Chairman Jerome Powell said the central bank will discuss speeding up the bond-buying taper at its December meeting.
In an appearance before a Senate committee, the Fed chief said he thinks reducing the pace of monthly bond buys can move quicker than the $15 billion-a-month schedule announced earlier this month.
Meanwhile, Moderna CEO Stephane Bancel reportedly said that he expects existing vaccines to be less effective against the new variant. The CEO told there could be a “material drop” in the current vaccines’ effectiveness against this variant. Bancel told on Monday that it could take months to develop and ship an omicron-specific vaccine.