Equity markets opened gap up but witnessed huge volatility before it closed with marginal gains. Nifty gained 46 points (+0.3%) to close at 14,684 while Sensex ended 42 points (+0.1%) to end at 49,201. Broader markets outperformed with Nifty MidCap 100/Nifty Smallcap gaining +0.9%/+1.4% respectively. Majority of the sectors ended in green with Pharma, Metals and Realty being the biggest gainers - up more than 1% followed by FMCG, Infra, Auto, IT. Banks on the other hand, fell by -0.5% which capped the market gains. Media and Energy too ended in red.Global cues were positive on the back by strong economic data from US and China. However, tightening of monetary policy by China, dented sentiments somewhat with regards to optimism for a strong economic recovery. Domestically, Nifty ended flat, dragged down by Banking stocks.
More states like Delhi, Gujarat followed Maharashtra and tightened measures to curb rising Covid which is worrying the market. Concerns over the economic impact of this 2nd wave led investors book profit intermittently.
Adani Ports, Tata Consumer Products, Asian Paints, JSW Steel and SBI Life Insurance were among major gainers on the Nifty, while losers were Power Grid Corp, Eicher Motors, Grasim Industries, Axis Bank and IndusInd Bank.
Commenting on the market outlook, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, opined, "Technically, Nifty has got stuck in a range from last few sessions and unable to emerge with a clear trend. It formed an Inside Bar and a Bearish candle along with long shadow on daily scale. Now, it has to hold above 14,700 zones to witness an up move towards 14,850 and 15,000 zones while on the downside support exists at 14,550 and 14,450 levels. India VIX fell down by 1.79% from 21.21 to 20.84 levels. Volatility has to cool down below 20 zones to witness some buying interest in the market."
Going ahead, Khemka added, "Indian markets are likely to track global cues including progress of President Joe Biden's new infrastructure proposal along with the earnings season which would kick start from next week and would keep markets volatile. Concerns over the fast-spreading 2nd wave of Covid in India continues to remain. Economic activities might take a hit due to partial lockdowns and markets might react accordingly in coming weeks."
"Overall markets are likely to remain in a consolidative mode for some time awaiting for fresh positive triggers. Hence investors would do well by gradually accumulating good quality companies on any declines in the market," he stated.
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