Benchmark indices started first week of 2021 with record highs today in line with positive global equities. Investor sentiment turned upbeat after India, the country with the second-highest number of coronavirus infections in the world, gave emergency use approvals to two coronavirus vaccines.
Drugs regulator DCGI on Sunday approved Oxford COVID-19 vaccine Covishield, manufactured by the Serum Institute, and indigenously developed Covaxin of Bharat Biotech for restricted emergency use in the country.
Extending gains for the ninth consecutive session, Sensex was trading 250 points higher at 48,129 and Nifty gained 80 points to 14,100.
During today's session, Sensex hit a lifetime high of 48,168 and Nifty rose to a new high of 14,116.
Although by the first hour of trade, indices pared gains and traded flat, amid weakness in banking and realty stocks.
Most banking and financial stocks traded in red today as Reserve Bank of India (RBI) warned banks of a deterioration in asset quality and said that lenders should brace themselves for a tough time once the policy support given during the pandemic is withdrawn.TCS, ONGC, SBI, L&T, Infosys, HCL Tech, ICICI Bank and Axis Bank were among the gainers. On the other hand, HDFC, Asian Paints and Reliance Industries were among the laggards.
Yash Gupta Equity Research Associate, Angel Brokingsaid," Covid-19 Dry run across India, another positive news for Indian market that the health ministry today asked states and union territories to conduct a dry run for the administration of vaccines on 2nd January 2020 i.e Saturday. To check and find out any loophole in the process of vaccination against covid 2019. In the dry run candidate approval is not required, after the successful dry run once candidate for initial phase is approved after that vaccine will be rolled out in India. In India two vaccines are in front lead i.e Bharat Biotech and Serum institute of India. Earlier it was decided that the dry run will only be conducted in 4 states of India but today the health ministry has decided to conduct a dry run across India. Any positive news of vaccine rollout in India will be a very positive Indian stock market."
As the first trading day of 2021 kicked off, markets globally were buoyed today. Key economic data out of China and Japan kept sentiments upbeat. A business survey on Monday showed that activity growth in China's vast industrial sector had slowed, raising doubts about a ift global economic rebound.
Further, the final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 50.0 in December from the previous month's 49.0 and a preliminary 49.7 reading.
Investors also looked forward to data from the United States and Europe that is due later in the day and cautiously awaited runoff elections outcome in Georgia for two U.S. Senate seats, scheduled on Tuesday that will determine which party controls the Senate.
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking) said,"The mankind had to witness a lot of unprecedented things in the year gone by. Initially it was very difficult to adjust with the forceful changes in our lives; but we always try to make our own ways in all the difficulties and this is exactly what has been proven all these months. The year 2020 was full of shocks and surprises, but as we always say "All's well that ends well". We not only stabilized from the March chaos but also managed to give a stupendous v-shaped recovery in the last nine months to even surpass pre-COVID highs with some authority.
During the concluding week of the calendar year, Nifty added another couple of percent to Bulls' kitty and importantly reached yet another milestone of 14000. Now, there are lots of expectations built as we step into the New Year. With a broader view, there is no brainer, we are heading for much bigger levels from here on; but it would be unfair to expect the similar kind of linear move that we have been enjoying since early November. In between, markets are likely to give some corrections, which would be a healthy sign. For this week, we expect the Nifty to slowly and gradually head towards 14150-14200; whereas the key support zone is placed at 13950 - 13850 levels."
On the currency front, rupee appreciated by 21 paise to 72.90 against the US dollar on Monday's opening trade supported by sustained foreign fund inflows and weakness of the American currency in the overseas market. Positive domestic equities and news on COVID-19 vaccine also improved sentiment.