Sensex leaps ahead of RBI Governor’s address: What else is impacting D-Street today

NEW DELHI: Domestic benchmark indices opened with gains on Wednesday ahead of an address by RBI Governor Shaktikanta Das at 10. However, rising Covid cases remained a worry.

The market is currently caught between the fear of economic fallout from the second wave of infections and hopes arising from the flattening of the pandemic curve. It will take some more time for clarity to emerge on which of the two will have a higher impact on market, said an analyst.

“RBI Governor’s announcements today are likely to influence markets, particularly certain segments like banking. A relief to MSMEs and retail borrowers might positively impact banks, which have a higher proportion of such loans. The rally in PSU banks yesterday may be in anticipation of this,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“In the short term, consumer discretionaries like autos and consumer durables are likely to be under pressure. IT and metals are exhibiting high resilience.”

How are the blue chip stocks doing?

After opening in the green, benchmark indices pared some gains. At 9:26 am, BSE flagship Sensex was up 158 points or 0.33 per cent at 48,411.56. NSE benchmark Nifty however was up 60 points or 0.41 per cent at 14,557.

In the 50-share pack Nifty, ONGC was the biggest gainer, up 3.10 per cent. UPL, Indian Oil, Grasim, BPCL, Wipro, JSW Steel, Titan, IndusInd Bank and SBI Life Insurance were among other gainers.

Adani Ports was the top loser in the pack, down 2.01 per cent. Bajaj Auto, Cipla, HDFC, Nestle India, Bajaj Finance, Sun Pharma, Divi’s Labs and Maruti Suzuki were other losers in the pack.

Good news

  • No inflation brewing? US Treasury Secretary Janet Yellen said on Tuesday that she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as US President Joe Biden’s spending plans boost growth.
  • Yields down: The Fed’s dogged patience allowed yields on US 10-year notes to ease back to 1.59 per cent, from last week’s top of 1.69 per cent, though the market has struggled to break below 1.53 per cent.

Bad news

  • Covid rampage: India has now reported more than 20 million coronavirus infections, including nearly 3.5 million people who are actively being treated for Covid-19. The country’s health system is in a state of collapse as hospitals and clinics face dire shortages of beds and lifesaving supplies.

Broader markets

Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.49 per cent while Nifty Midcap rose 0.55 per cent. The broadest index on NSE – the Nifty 500 – climbed 0.41 per cent.

Aarti Industries, Oil India, SAIL, Balrampur Chini Mills, UTI AMC and EID Parry were gainers from the space while Future Retail, Alkyl Amines, Dilip Buildcon, Alembic Pharmaceuticals, Whirlpool and Tata Chemicals were under selling pressure.

Global markets

Holidays in Japan, China and South Korea limited the early reaction, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan dithering on either side of flat.

Japan’s Nikkei was shut, but futures traded down at 28,735 compared to the last cash close of 28,812. Nasdaq futures steadied after a sharp pullback overnight, while S&P 500 futures inched up 0.1 per cent.

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