The markets kicked off the new financial year with a strong start. While positive global cues on announcement of infrastructure stimulus in the US kept the markets buoyant, the optimism regarding the fourth-quarter results also gave a boost. The Sensex rallied 520.68 points (1.05%) to close at 50029.83 while the Nifty rose 176.5 points (1.2%) to 14,867.35.
The markets witnessed broad-based buying led by financials and metal stocks. They closed at two-week highs. The Nifty closed the week up by 2.5% while the Nifty Midcap 100 rose 3.8%. The markets witnessed a strong pullback in the holiday-truncated week and snapped their two-week losing streak.
Hemant Kanwala, head – equity, Kotak Mahindra Life Insurance, said, “As we are entering the earnings season, investors’ focus will shift to corporate commentary along with the results to get guidance for the future outlook. The second wave of Covid-19 and high valuation are expected to maintain volatility in the near term.”
Metal stocks were among top gainers as the demand for industrial commodities like steel, copper and aluminium is expected to rise. The biggest gainers on the Nifty were JSW Steel, Hindalco, Tata Steel, Adani Ports and SEZ and IndusInd Bank with gains of 7.91%, 6.56%, 5.80%, 4.43%, and 4.35%, respectively. The biggest losers on the Nifty were Hindustan Unilever, Nestle India, HDFC Life, Divi’s Laboratories and TCS, down by 1.34%, 0.67%, 0.55%, 0.35%, and 0.34%, respectively.
What helped the markets the most in India and across the globe was the announcement of an infrastructure stimulus by US President Joe Biden. He pledged $2.3 trillion dollars in stimulus that would go towards funding infrastructure projects over the next eight years and would also help create jobs. This led to an overnight rally on the Wall Street with the S&P 500 rising by 0.36%. Asian markets followed suit and the bourses in China, South Korea and Taiwan rallied between 0.71% and 0.85%. European markets also rose in early trading.
Compared to other markets, the Indian markets were among the lowest performing ones in March. According to a report by Care Ratings, gains in the Indian equity markets were capped due to rising Covid-19 cases and bond yields. The global ratings agency said, “The gains in the economy were limited as investor sentiments were dampened by rising number of coronavirus cases, new variant of the Covid-19 virus and reinforcement of restrictions with fears of a second wave threatening the nascent recovery process in the economy…”