Hopes of healthy Q3FY22 earnings results buoy equities; IT stocks rise


Mumbai, Jan 11 (IANS) Hopes of healthy quarterly earnings results buoyed India’s equity indices — S&P BSE Sensex and NSE Nifty50 — to settle on a flat-to-positive note on Tuesday.

Besides, FPIs returning to India have also kept equity markets buoyed in 2022.

However, concerns over the ongoing third Covid wave along with supply side issues and inflationary pressure capped the gains.

Consequently, Sensex and Nifty settled at 60,616 points and 18,055 points, up 0.4 per cent and 0.3 per cent from their previous close, respectively.

Globally, Asian equities struggled to find direction, as investors awaited clues from the US Fed on the timing of expected policy tightening.

On the other hand, European stocks bounced back from their biggest decline in six weeks as US Treasury yields steadied.

In the domestic front, volumes on the NSE were higher than the recent averages. Amongst sectors, power, realty and IT gained the most whereas metals and telecom lost the most.

“Nifty showed deceleration in the upward momentum on Tuesday with advance decline ratio turning slightly negative,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

“This could be an indication of the trend getting mature and the Nifty showing signs of fatigue after the recent sharp upward correction. 17945-18109 could be the band for the Nifty in t he near term,” he added.

According to Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services: “Investors continue to monitor the impact of the central bank’s tightening of the monetary policies and the spread of the Omicron variant. In the previous two decades, there have been two periods when the US Fed raised interest rates (June ’04-June ’06) and (Dec ’16-Dec ’18). The Nifty performed well in those two periods, despite rate increases by the US Fed.

“Going forward, we expect the market to remain steady on the expectation of a strong corporate earnings season, upcoming Budget and positive macroeconomic data. The key risk in the near term might be any changes by the government in restriction norms due to rising Covid cases.”

Vinod Nair, Head of Research at Geojit Financial Services, said, “Domestic benchmark indices showcased a flattish trend with positive bias as the market weighed the expectations of a strong quarter amid concerns over rising cases, supply issue and inflationary pressure.

“The global market was on the edge as Fed meeting minutes hinted at rate hikes, elevated US inflation and the awaited release of US CPI inflation data. Domestic inflation levels are also likely to be significant due to unfavourable base effects though food prices declined during December.”



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