Lower Covid numbers lift equities, banking, auto stocks shine
Mumbai, May 17, 2021
Decline in new Covid positive cases, along with healthy buying in banking as well as automobile stocks, lifted India's benchmark stock indices on Monday.
Both key indices kick-started the week on a positive note with a gap up opening and ended with one of the biggest single day gains in more than a month.
Globally, stocks traded mixed on Monday after China reported consumer spending grew more slowly than expected in April.
Besides, European stocks edged lower on Monday, as investors weighed signs that Covid-19 infections are continuing to spread in Asia, even as fears about inflation appear to have subsided.
On the domestic front, wholesale inflation rose by a massive 10.49 per cent in April as the constant rise in cost of fuel, including petrol, LPG and high speed diesel percolated down into the economy.
Consequently, the S&P BSE Sensex traded at 49,580.73, higher by 848.18 points, or 1.74 per cent, from its previous close.
Similarly, the Nifty50 of the National Stock Exchange traded at 14,923.15, up 245.35 points, or 1.67 per cent, from its previous close.
"Nifty rose sharply and ended almost at the intra-day high. The next stop on the upside is 14,966-15,044 band. A breach of this band could lead to a challenge to the all time highs of the Nifty (15,432). On falls, the 14,824-14,850 band could provide support," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"A healthy advance decline ratio suggests return of confidence of traders in the broader markets."
Vinod Nair, Head of Research at Geojit Financial Services, said: "Indian indices soared with solid gains led by banking, metal and auto stocks due to fall in infection cases."
"The market expects a rapid fall in daily reported Covid cases which helped to ease concerns over extended lockdowns and sharp correction in FY22 estimates. Banking stocks took a breather as it helped in soothing asset quality concerns."