Bulls Rallied on U.S. Boost

IT, Pharma, Metal Stocks Push Markets to New Highs

Our Analysis

Markets are likely to take cues from global peers as stimulus package announcement in the US last night led to renewed buying interest in the global markets. In the near term, positive bias is expected to continue however, rising COVID cases in India would remain a key concern. As Q4 earning season is approaching, Investors focus will shift to earnings announcements and management commentary.

On the global front, U.S. markets have remained flattish this week because of further rise in bond yields. However, jobs data in the US is likely to be better than expected which could lead to improved sentiment. The US President announced a massive USU$ 2.25 trillion infrastructure package on this Wednesday which will be funded through higher corporate taxes. Electric vehicles might see a rally in U.S. as the President is hoping to make electric vehicles more affordable to turn a niche product into one with mass appeal, boosting the segment with $174 billion for next 10 years.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, the market observed a holiday.

2) On Tuesday, Sensex index settled above the 50,000-mark for the first time since March 23 at 50,136 levels, up 1,128 points or 2.33 per cent. The broader Nifty index, on the other hand, closed tad below the 14,850-mark at 14,845 levels, up 338 points or 2.33 per cent.

3) On Wednesday, Sensex settled the day at 49,509 levels, down 627 points or 1.25 per cent, while the broader Nifty ended at 16,691 levels, after erasing 154 points or 1 per cent.

4) On Thursday, Sensex reclaimed the 50,000-mark on a closing basis and closed at 50,030, after advancing 521 points or 1.05 per cent. Earlier in the day, the index had briefly slipped in the red to touch a low of 49,478.5. On the NSE, the Nifty index closed at 14,867 levels, up 177 points or 1.2 per cent.

5) On Friday, the market observed the holiday.

Broader Index & Global Market:

- The index breadth remained firmly in the favour of the bulls as 25 of the 30 constituents on the Sensex and 41 of the 50 constituents on the Nifty settled the session in the green. IndusInd Bank, Kotak Mahindra Bank, ICICI Bank, Bajaj Finance, Sun Pharma, Axis Bank, and UltraTech Cement outperformed the Sensex today, up between 2 per cent and 4 per cent. JSW Steel, Hindalco, Adani Ports, Tata Steel, and Hero MotoCorp were the additional gainers on the Nifty, rallying up to 8 per cent.

- Stocks crept higher on Thursday following their weakest quarter in a year, while higher Treasury yields supported the dollar. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 per cent, while Japan's Nikkei rose 1.3 per cent as a survey showed big manufacturers' mood bouncing back to pre-pandemic levels. In Europe, the pan-European STOXX 600 index rose 0.5 per cent, the German DAX climbed 0.6 per cent to hit a record high, while the UK's FTSE 100 also gained 0.6 per cent. Nasdaq Futures, meanwhile, were last up 0.9 per cent and S&P 500 futures added 0.4 per cent.

Movers & Shakers

Shares of JSW Steel rose 5 per cent and hit a new high of Rs 490.95 on the BSE after credit ratings agency Moody's Investors Service changed the outlook on all ratings of the companys instruments to 'stable' from 'negative'.

Shares of Adani Power Ltd. locked in lower circuit this week and slide ~20% on BSE and NSE.

Key Market Drivers

  • Coronavirus vaccine
  • Lockdown
  • Q4FY21
  • USA bond yield

Event Watch

International:

  • Coronavirus vaccine
  • USA PMI, unemployment rate
  • UK new car sales
  • China inflation rate

Domestic:

  • Coronavirus- vaccine
  • Q4FY21
  • India PMI, monetary policy

Stocks To Watch

SAIL Ltd On Upside while, HUL Ltd on Downside.