NEW DELHI: Even as the whole world is taking a precautionary measure to control the spread of Omicron, it seems the impact of this new coronavirus variant is fading away from investors’ sentiment. The benchmark index — Sensex — on Wednesday rallied over 1,000 points, taking its two-day gain to about 2000 points. This has increased investors’ wealth by a whopping Rs 7.5 lakh crore in two days.
The 30-share index surged 1016 points or 1.76% on Wednesday to close at 58,649.68 while the broader index NSE Nifty advanced 293.05 points or 1.71% to 17,469.75. A rally in global markets and the Reserve Bank’s decision to leave the key interest rate unchanged also supported Indian markets.
“Fears over Omicron faded as recent reports suggested that the new virus isn’t as deadly as earlier anticipated and this helped the market to add-on to recent strong gains. RBI’s GDP forecast for FY22 remained high at 9.5% showing confidence over economic recovery and inflation forecast is below the market estimates,” said Vinod Nair, Head of Research at Geojit Financial Services.
Despite this two-day rally, brokerages aren’t very bullish in the near term as they expect profit booking at this high level. Moreover, many global brokerages maintain that current valuations seem overstretched. The current gain also comes after benchmark indices witnessed a correction of 10%. Even at current level, Sensex is about 4,000 points lower than its October 19 peak.
“Market has closed on a strong note today and hence, we may see further extension of this as well; but we still do not have the conviction of it moving beyond the higher boundary of 17,700 (Nifty) in this leg,” Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel One).
Ajit Mishra, VP - Research, Religare Broking, said that the RBI policy is behind us, the focus will shift back to global cues and upcoming macro data (IIP & CPI). “Further, as the number of IPOs is lined up, primary markets will keep investors busy. Given the high volatility in the market, we would remain cautiously optimistic on the markets,” added Mishra.