The benchmarks almost ended the day Tuesday in the green. After falling 5% in the previous five trading sessions, the 50-stock Nifty rose 32.1 points (0.22%) to close at 14,707.8, while the Sensex gained 7.09 points (0.01%) in the day’s trading session closing at 49,751.41.
Markets remained volatile and made gains on expectations of a strong global recovery due to rising commodity prices, but their gains were capped by subdued sentiments due to rising bond yields in the global scale. Metals inventories have rebounded due to soaring commodity prices around the world. The prices of metal inventories were pushed up after demand for metals increased amid tightening metal supply. Shares of Tata Steel and Hindalco rose 7.23% and 5.73% respectively.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, said: “The Nifty Metals Index has advanced the most, amid rising commodity prices fueled by hopes of a resumption of demand. ” On the other hand, energy stocks also joined the rally due to higher crude oil prices with Brent trading at $ 64.48 per barrel. In addition, the announcement of the creation of a separate company for the O2C business of Reliance Industries also contributed to the purchase of energy stocks. Reliance Industries shares rose 0.9% on Tuesday.
The gains made by metals and energy stocks were however offset by the sale of financial stocks, with Nifty Bank falling 0.4%. While the medium-term outlook for Indian markets continues to remain strong according to foreign financial services firms such as Nomura, the threat to the rebound in Indian stocks in the near term stems from the surge in Covid-19 cases, the rise commodity prices unfavorably. impacting the short-term margins of companies, the increase in the trade and current account deficit and the potential fear of a double deficit, as well as the rise in bond yields impacting the valuation of equities.
In his report, Nomura said: “Our baseline scenario assumes stronger growth over the medium term, driven by government policies and reasonably favorable monetary policy.”
Foreign portfolio investors (REITs) sold shares worth $ 119.1 million on Monday. The biggest losers on the Nifty were Kotak Mahindra Bank, Adani Ports and SEZ, Maruti Suzuki, Bajaj Auto and Divi’s Laboratories, down 3.8%, 1.75%, 1.57%, 1.5% and 1.48%. The biggest winners at Nifty were Tata Steel, Tata Motors, Hindalco, ONGC and UPL, up 7.23%, 6.6%, 5.73%, 5.64% and 4.84%, respectively.