Sensex reclaims 60,000 despite rise in Covid cases

The 30-share index ended up 367.22 points or 0.61% at 60,223.15. Nifty climbed 120 points or 0.67% to end at 17,925.25.

“In a highly volatile session, the domestic market witnessed a recovery after a slight decline, although the global sentiment was not in favor of the bulls. Tighter restrictions due to rising COVID cases have put pressure on the volatility in the market. Banking Sector As some private sectors outperformed other sectoral indices. Lenders posted double-digit business growth during the third quarter. IT stocks took a hit as investors waited for the start of the quarterly results season. US and Asian markets The U.S. traded weak ahead of the release of US Fed meeting minutes, while European indices remained grounded, said Vinod Nair, Head of Research, Geojit Financial Services.

Markets in other Asia-Pacific regions were largely lower on Wednesday, as higher US Treasury yields weighed on global tech firms and pushed the dollar to a five-year high against Japan’s yen. US yields rose on Tuesday as bond investors geared up for a hike in interest rates from the Federal Reserve to curb high inflation by mid-year, Reuters reported.

Hong Kong’s Hang Seng index was down 1.64%, the Shanghai Composite in China slipped 1.02%, while the Kospi in South Korea fell 1.18%.

According to Siddharth Khemka, head-retail research, Motilal Oswal Financial Services Ltd., global markets fell as US Treasury yields rose as investors turned to the US Federal Reserve for clues about the central bank’s interest rate hike. Waiting for the minutes of the latest meeting. , However, he remains optimistic that the Nifty is expected to deliver around 12-15% returns in 2022, supported by continued economic recovery and strong earnings growth. “After the recent correction, Nifty is now trading at 20 times the 12-month Forward Price to Earnings (PE) which is no longer in the expensive zone. While the market trend may be volatile in the near future due to potential risks from Omicron variants, upcoming budget and weak global cues, but in the long run, strong earnings delivery coupled with positive macro-economic data is expected to propel the markets upwards. holds the key. Khemka said.

The India Volatility Index or India VIX, however, climbed 6.87% 0n on Wednesday, indicating a gradual increase in anxiety and panic among investors. Indian markets have started the year with a bang, with both the benchmark indices Sensex and Nifty gaining over 3% each.

Foreign institutional investors (FIIs) have started buying Indian equities and were net buyers of Indian shares worth $493.66 million so far in 2022, as against $4.76 billion in the last quarter of 2021. Domestic institutional investors have pumped in. 1336.08 crore in shares till date in January.

According to Aditi Nair, Chief Economist, ICRA Ltd., given the recent surge in COVID-19 cases and the lifting of restrictions, adding to the uncertainty, it is unlikely that the Reserve Bank of India will begin with policy normalization only in February 2022, unless inflation Provides a sharp negative surprise.

“Our preliminary analysis suggests that the impact of an omicron wave may be limited to a quarter in terms of economic impact given the period of increase in fresh cases as well as better preparedness of governments, health care systems and households. However, there is still a lot of uncertainty regarding this. The impact on GDP growth will depend on the extent to which restrictions should be extended to states in the coming weeks. As of now, we see a marginal decline of 9.0% in our forecast of GDP expansion for FY22,” she said.