Markets rise as UK's mutant virus brings down valuations
Bombay Stock ExchangeFile photo

Markets rise as UK's mutant virus brings down valuations

Mumbai, December 22, 2020

A last-hour bout of healthy buying lifted the country's domestic stock markets on Tuesday after concerns over a mutant strain of Covid-19 discovered in the UK dampened indices for the better part of the day's trade session.

Monday's sharp decline made valuations more attractive and re-ignited FII flows into the country.

Besides, market participants pinned hopes on the $900 billion US stimulus bonanza to re-ignite a torrent of foreign fund inflows into emerging markets, especially India.

On Tuesday, the foreign investors pumped in liquidity worth Rs 1,153 crore, a day after they had pulled out Rs 323.55 crore.

Globally, except India and Thailand, all other Asian shares retreated, extending losses on growing worries over a new, potentially more infectious strain of the coronavirus.

Similarly, European stocks recovered some ground early on Tuesday despite concerns over the spread of the new Covid-19 strain.

Back home, both the key indices -- S&P BSE Sensex and NSE Nifty50 -- made gains after declining for the majority of the day's trade session.

All sectoral indices traded in the negative except IT, pharma, metals, PSU bank space. Other sectoral indices such as media, realty and financial services lost ground.

Consequently, the Sensex gained 46,006.69 points, up 452.73 points, or 0.99 per cent, from its previous close.

The Nifty50 rose to 13,466.30 points, up 137.90, or 1.03 per cent, from its previous close.

"Nifty has bounced up on December 22 after the sharp fall seen on the previous day," said Deepak Jasani, Head of Retail Research at HDFC Securities.

"On upmoves, Nifty 13,549-13,589 band could offer resistance while 13,192 could offer support. The upward bounce may last 1-2 sessions more."

Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services, said: "Indian equity market opened positive, but soon drifted into red before making a smart intraday recovery to close with gains, following encouraging cues from European markets."

"Global cues turned positive after BioNTech said that it is confident that its coronavirus vaccine would work against the UK variant, but needed further studies to be completely sure. Sentiment was also positive after the US Congress approved an $892 billion coronavirus aid package."

"Going ahead, the market is likely to be highly volatile till the concerns over the new Covid strain subsides and the Christmas vacation gets over. The monthly F&O expiry this week would further add to the volatility."

IANS

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