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NEW DELHI: Morale on Dalal Street was high for another day on Wednesday as Fed Reserve chairman cleared air over talks of rate hike. However, gains were limited as high valuation played in investors’ minds.
As the indices have been hovering around all-time high levels, many quarters of investors find valuation too stretched to buy. Many of them are looking for a correction to enter the market again.
“The equity bulls are consistently winning against bond bears. This ferocious bull run has made India the best performing large market. The MSCI India valuation is now at a 55% premium to MSCI Emerging Market index. The market is discounting an expected 35% growth in Nifty earnings in FY22. This sharp rebound in earnings is achievable if a brutal third wave of the pandemic doesn't strike. Top-quality financials offer buying opportunities on declines," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 9.46 am, BSE flagship Sensex was up 76 points or 0.15 per cent to 52,665. NSE benchmark Nifty climbed 22 points or 0.14 per cent to 15,795.
In the 50-share pack Nifty, Hero Moto was the biggest gainer, up 2.54 per cent. , Maruti Suzuki, , Titan, JSW Steel, , M&M, Tata Steel and Coal India were among other gainers.
Adani Ports was the top loser in the pack, down 1.07 per cent. Kotak Mahindra Bank, Shree Cement, UltraTech Cement, UPL, Indian Oil, Bajaj Finserv, BPCL and Divi’s Labs were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
Fed flip flops: Powell on Tuesday reaffirmed the US central bank's intent to encourage a "broad and inclusive" recovery of the job market.
Bond yields fall: Benchmark 10-year Treasuries yields inched lower after Powell said there would be no Fed rate hike before recovery. Lower yields mean more money flowing into emerging markets like India.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.23 per cent, while Nifty Midcap rose 0.42 per cent. Broadest index on NSE, Nifty 500 advanced 0.21 per cent.
Godrej Agrovet, Indian Hotels, Power Finance, Amber Enterprises, IRB Infra Developers and Lux Industries were gainers from the space, while PNB Housing, Radico Khaitan, HEG, Adani Total Gas, Hindustan Zinc and Union Bank were under selling pressure.
Global markets
The rates-sensitive Nasdaq index closed at a record high on Tuesday, while tech stocks were bid in Asia, notably in Taiwan where chipmakers helped the benchmark index rise 1 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent. Japan's Nikkei rose 0.3 per cent.
As the indices have been hovering around all-time high levels, many quarters of investors find valuation too stretched to buy. Many of them are looking for a correction to enter the market again.
“The equity bulls are consistently winning against bond bears. This ferocious bull run has made India the best performing large market. The MSCI India valuation is now at a 55% premium to MSCI Emerging Market index. The market is discounting an expected 35% growth in Nifty earnings in FY22. This sharp rebound in earnings is achievable if a brutal third wave of the pandemic doesn't strike. Top-quality financials offer buying opportunities on declines," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 9.46 am, BSE flagship Sensex was up 76 points or 0.15 per cent to 52,665. NSE benchmark Nifty climbed 22 points or 0.14 per cent to 15,795.
In the 50-share pack Nifty, Hero Moto was the biggest gainer, up 2.54 per cent. , Maruti Suzuki, , Titan, JSW Steel, , M&M, Tata Steel and Coal India were among other gainers.
Adani Ports was the top loser in the pack, down 1.07 per cent. Kotak Mahindra Bank, Shree Cement, UltraTech Cement, UPL, Indian Oil, Bajaj Finserv, BPCL and Divi’s Labs were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
Fed flip flops: Powell on Tuesday reaffirmed the US central bank's intent to encourage a "broad and inclusive" recovery of the job market.
Bond yields fall: Benchmark 10-year Treasuries yields inched lower after Powell said there would be no Fed rate hike before recovery. Lower yields mean more money flowing into emerging markets like India.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.23 per cent, while Nifty Midcap rose 0.42 per cent. Broadest index on NSE, Nifty 500 advanced 0.21 per cent.
Godrej Agrovet, Indian Hotels, Power Finance, Amber Enterprises, IRB Infra Developers and Lux Industries were gainers from the space, while PNB Housing, Radico Khaitan, HEG, Adani Total Gas, Hindustan Zinc and Union Bank were under selling pressure.
Global markets
The rates-sensitive Nasdaq index closed at a record high on Tuesday, while tech stocks were bid in Asia, notably in Taiwan where chipmakers helped the benchmark index rise 1 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent. Japan's Nikkei rose 0.3 per cent.
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