Sensex rises 250 points amid strong global cues; Nifty trades near 14,250

Sensex rises 250 points amid strong global cues; Nifty trades near 14,250

NEW DELHI: Buying returned in Reliance Industries and banking names on Thursday after Democrats swept the Georgia elections paving way for more stimulus, and dollar dropped further, making emerging market equities more attractive.

The increased economic stimulus will come with a flip side as Biden has indicated he will raise taxes. Moreover, inflation will also rise along with this. Investors, more or less, ignored the violence in the US Capitol.

“”The infamy in the US Capitol has been brushed aside by the markets. The Biden Presidency with democratic senate might push for higher fiscal stimulus pushing the dollar down further. The dollar index has slipped to less than 0.85,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“The US tech stocks are likely to be impacted since valuations are hard to justify. In our markets too valuations are getting stretched. Profit bookings are likely as reflected in the sell figures in the cash market from both FIIs & DIIs.”

Factors driving markets

-Dems control US Senate: After a complete sweep of the two US Senate seats, Democrats now have narrow control of both chambers of Congress, making it easier to advance legislative priorities from coronavirus relief to climate change.

-Mob storms US Capitol: Ratcheting up tensions, hundreds of supporters of President Donald Trump stormed the US Capitol on Wednesday in a bid to overturn his election defeat, forcing Congress to postpone a session that would have certified President-elect Joe Biden’s victory.

-Fed minutes: The Federal Reserve was nearly unanimous in its decision last month to leave its bond-buying program unchanged, according to minutes of the US central bank’s December policy meeting.

How are bluechips doing

After opening in the green, benchmark indices maintained their lead. At 9.54 am, BSE flagship Sensex was up 255 points or 0.53 per cent to 48,429. NSE benchmark Nifty followed and added 84 points or 0.60 per cent to 14,231.

“14,250 continues to remain a resistance area for the Nifty. If we are able to sustain above that level, our next target should be 14,350-14,400. A good support currently lies at 13,800 so dips or intra day corrections can be utilised to enter the markets for higher targets. Strict stops should be in place as markets can get volatile during corrective moves,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

In the 50-share pack Nifty, Tata Steel was the biggest gainer, up 4.66 per cent. Hindalco, Power Grid, Adani Ports, Eicher Motors, Bharti Airtel, JSW Steel, IndusInd Bank, L&T and M&M were among other gainers.

Titan was the top loser in the pack, down 1.17 per cent. HUL, TCS, Infosys, Tech Mahindra, HCL Tech, HDFC Life Insurance, Divi’s Labs, Sun Pharma and Kotak Mahindra Bank were other losers in the pack.

Broader markets

Broader market indices traded with gains outperforming their headline peers in morning trade. Nifty Smallcap added 1.34 per cent while Nifty Midcap advanced 1.32 per cent. Broadest index on NSE, Nifty 500 was up 0.71 per cent.

Sobha, Graphite, India, Sunteck Realty, Bharat Forge, Polycab India and Ashok Leyland were among major gainers from the space while Max Financial, Mindtree, Coforge, Trident, Inox Leisure and JB Chemicals were under selling pressure.

Global markets

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent to just shy of a record high, led by jumps of more than 1.5 per cent in South Korea’s chipmaker-heavy Kospi and Australia’s miner-and-bank heavy ASX 200.

Japan’s Nikkei rose 2 per cent to its highest since 1990. S&P 500 futures rose 0.6 per cent and Nasdaq 100 futures rose 0.9 per cent as markets seemed to shake off a late New York session fade when chaotic protests in Washington unnerved traders.

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