Gap-up start for D-Street today!

Indian equity markets nosedived on Monday and closed at one month low. But as Doug Kass says often, the markets have no memory from day to day. The market participants are likely to catch by surprise as SGX Nifty is indicating a strong opening this morning and helping this cause are also the firm global cues after Moderna reported that its experimental trial of COVID-19 vaccine showed promising results. Will the big gap-up force the bears to trigger their stop-loss on the short positions or will they utilise this pullback to add fresh short, it will all depend on the first hour of trade. If the indices manage to stay above the first hour low, the bears might push to trigger their stops and we may see an extended move on the upside.   

At the time of writing, SGX Nifty has jumped 208 points and was trading at 8,993.50 levels.

On the earnings front, 18 companies which include Bajaj Finance, Ujjivan Small Finance Bank and Apollo Tyre are scheduled to announce their earnings today.

Asian equity markets seemed to be a sea of green on Tuesday as US has announced that it may be very close to a vaccine for COVID-19 and that had enthused global markets. Hong Kong’s Hang Seng has added 2.07 per cent, Japan’s Nikkei has surged by 1.85 per cent and China’s Shanghai Composite has risen by 0.64 per cent.

Back home, the key benchmark indices ended Monday’s session with sharp losses of about 3.5 per cent as stimulus package announced by Finance Minister left the market participants disappointed. Further, the news of extension of lockdown and large additions of COVID-19 cases added fuel to the fire. At the closing bell, Nifty plunged 314 points and BSE Sensex tumbled 1,069 points. In the broader market, Nifty Mid-cap and Small-cap settled 4.49 and 3.31 per cent lower. Talking about the sectoral performance, barring Nifty IT, all other sectoral indices ended in red with Nifty Media and Nifty Bank being the worst hit. Bank Nifty was severely impacted as the government announced that no fresh insolvency cases under Insolvency & Bankruptcy Code (IBC) will be initiated up to one year. The market breadth remained in favour of bears. For every gainer, there were more than a couple of losers. 

In overnight development, US equities witnessed a bullish fairy tale on the first trading day of the week and the key catalyst for the rally on Wall Street was that Moderna announced substantial signs of early progress in their race to become the first biotech firm to develop an effective COVID-19 vaccine. Adding an extra-kick, were the comments from Federal Reserve Chairman Jerome Powell that the Fed still has ammunition left in its arsenal to mitigate economic damage caused by COVID-19. At close, Dow jumped 3.9 per cent, S&P soared 3.2 per cent and the tech-heavy Nasdaq rose 2.4 per cent. The same set of news helped European market indices to end the session on buoyant note.