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Omicron fear brushed aside, share market rebounds. Four factors behind revival

Nov 30, 2021 12:03 PM IST

Strong global cues, unlikely lockdowns from omicron strain, economic recovery and revival in some key sectors help markets ragain

Stock market,share market

The Indian stock market seems to have shrugged off the intensifying fears of the new COVID strain with the Sensex scaling 903.03 points, or 1.58 percent, to 58,163.61, and the Nifty climbing 265.50 points, or 1.56 percent, to 17,319.50 at 10.34am.

Sectors like realty, capital goods, banks and financial spaces gained the most, adding 2-4 percent each, while the BSE Midcap and Smallcap indices were up over 2 percent each.

However, the equity markets has come off the day's high with Sensex up 108.76 points at 57369.34 at 12:00 hours and the Nifty adding 29.40 points at 17083.40.

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Let’s take a look at the factors that helped the market regain.

Strong global cues

Global equity markets, including the Wall Street, closed higher, regaining some of the grounds lost in Friday’s sell-off, as investors were hopeful that the omicron variant of coronavirus would not lead to lockdowns after reassurance from US President Joe Biden.

The Dow Jones Industrial Average rose 236.6 points, or 0.68 percent, to 35,135.94, the S&P 500 gained 60.65 points, or 1.32 percent, to 4,655.27 and the Nasdaq Composite added 291.18 points, or 1.88 percent, to 15,782.83.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.52 percent higher on Tuesday. In Australia, the S&P/ASX200 was up 1.15 percent, while Japan’s Nikkei (.N225) was trading 1.2 percent higher early in the session.

Economic disruption unlikely

Globally, investors became cautiously optimistic that the omicron variant might not cause a widespread global economic disruption, with Asian shares trading in the positive territory and the US government saying that lockdowns were off the table.

Hopes of economic recovery

India’s statistics ministry will announce the gross domestic product (GDP) data and economists have projected that the data will show 8.4 percent year-on-year growth in the July-September period, according to a Reuters poll. The Reserve Bank of India (RBI), which has cut key interest rates to record lows and infused massive liquidity to shore up economy, is widely expected to suck out excess liquidity before normalising rates amid growing inflationary concerns. RBI has forecast an annual growth of 9.5 percent for this fiscal year.

Uptick in realty, banks and financials

The realty index jumped over 4 percent, led by Sobha, Indiabulls Real Estate, Godrej Properties, Sunteck Realty, DLF and Oberoi Realty, while from the financial space, Bajaj Finance and Bajaj Finserv, along with Axis Bank and IndusInd Bank, were top gainers.

Technical views

Gaurav Garg, Head of Research, Capitalvia Global Research

The Indian benchmarks started the day on a positive note amid supportive global cues. There will be some caution as the omicron variant of COVID-19 adds new uncertainties to the global economic outlook. Support may come as India ratings expects the economy to grow 8.3 percent in Q2 and close the year with 9.4 percent in FY22.

There may be some reaction in aviation stocks as the government said investments worth Rs 91,000 crore will be made for developing existing and new airports. The levels of 16,800-16,900 may act as an important support levels in the market. We can expect it to trade in the range of 16,800-17,400.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

The market bounced today to the positive territory. Whether it is a short covering or a dead cat bounce is still to be ascertained. The markets are still in the negative territory and unless we do not close above 17,500 on the Nifty, the short-term trend will not change.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Sandip Das
first published: Nov 30, 2021 11:57 am
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