Marketscontinuerally on positive sentiment
Concerns about Fed’s tapering and the detection of Omicron in India will continue to keep stocks volatile
MUMBAI: Indian stocks climbed for a second straight session on Thursday as new manufacturing and tax data showed that the economic recovery remained on track.
But concerns about the US Federal Reserve’s tapering of its bond-buying programme and the detection of the Omicron strain of the coronavirus in India will continue to keep stocks volatile, analysts said. “We expect the market to continue with its volatility, given the uncertainty around the new Omicron variant and Fed tapering,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services. “However, the sharp sell-offs have made valuations comfortable and the economic data points continue to point towards economic recovery, thus keeping longrecovery. term fundamentals intact. We would thus advise investors to buy in this volatility in a staggered fashion.”
On Thursday, the benchmark BSE Sensex rose 776.50 points, or 1.35%, to 58,461.29, while the National Stock Exchange’s Nifty gained 1.37% to 17,401.65. In the past two sessions, the Sensex and Nifty have gained 2.5% each, clawing back some of the losses seen in the previous week. “Upbeat economic data for November and steady GDP growth lifted investors’ sentiments,” said Binod Modi, head of strategy at Reliance Securities.
The Indian economy clocked a healthy growth rate of 8.4% in the second quarter of FY22, returning to its pre-covid size. GST collections rose to over ₹1.31 lakh crore in November, the second-highest since its implementation in July 2017, in line with the trend in economic Data released by IHS Markit showed the manufacturing Purchasing Managers’ Index, or PMI, rose from 55.9 in October to 57.6 in November. High-frequency economic indicators have rebounded in recent months and continue to reflect expansion of economic activities and sustainable earnings growth. Further, the government’s effort to cool commodity prices by cutting taxes on fuel augurs well, which, along with retail inflation remaining below the central bank’s reference range, will help the Reserve Bank of India keep policy rates at the current range to support ongoing recovery, Modi added.
Domestic and global shares have been volatile in the past one month amid Fed chair Jerome Powell’s remarks over the possibility of a faster end to the bond-buying programme and interest rate hikes, and concerns with regards to the spread of Omicron and the effectiveness of existing vaccines against it.
Meanwhile, Stocks rose broadly in morning trading on Wall Street Thursday as investors continue to monitor the spread of the new coronavirus variant.