Markets Unfazed By The Second Wave
Domestic mutual funds continue to increase their exposure to metal stocks, thus indicating higher growth potential of the sector
India is considered to be amongst those worst hit from the second wave of the global corona virus pandemic. However, in spite of this scenario, the Indian equity markets have hardly shown any signs of worry. One of the factors that could be keeping investors’ sentiment upbeat is that the global equity markets in recent times are in good stead. Additionally, a drop in cases during the fortnight lifted benchmark indices as the Sensex rose by 1.67 per cent while Nifty was up by 2.08 per cent. The drop in cases has helped to ease investor concerns over extended lockdowns and sharp correction in FY22 estimates. In the broader markets, pharmaceutical stocks were seen outperforming during the fortnight.
Small-Cap and Mid-Cap indices jumped by 4.10 per cent and 2.61 per cent, respectively, during the fortnight. Power index was the biggest gainer amongst sectoral indices, gaining by 8.50 per cent during the fortnight. A global push toward clean energy sources has brought clean energy and related technology companies in the limelight. Also, increased profitability has garnered investors’ attention to power companies. Metal index jumped by 7.40 per cent during the fortnight as domestic mutual funds continue to increase their exposure to metal stocks, thus indicating higher growth potential of the sector.
The FMCG sector witnessed strong growth for the third straight quarter during the January-March period. According to market researcher Nielsen IQ, the FMCG sector saw growth of 9.4 per cent during the the January-March quarter, which is higher than the 7.3 per cent growth seen in the December 2020 ended quarter and 1.6 per cent in the quarter ended September 2020. The FMCG index was up by 4.05 per cent during the fortnight. As investors rejoiced over the drop in corona virus cases, banking stocks took a breather as the economy, comparatively unfazed by the second wave, has helped in soothing asset quality concerns since a majority have already been accounting for necessary emergency funds.
While Bankex rose by 2.02 per cent during the fortnight, Healthcare index was up by 2.37 per cent for the same period of time as bulls took centre-stage with optimism over the vaccination drive expecting to pick up momentum. In the last few weeks, Auto index rose by 3.61 per cent while IT index managed to end the fortnight in the positive territory, up by a mere 0.14 per cent.
Amongst the sectoral indices, Realty index is the only index to end the fortnight, in red down by 1.68 per cent. Trading data shows that FIIs were net sellers to the tune of Rs 3,810.98 crore while DIIs were net buyers to the tune of Rs 1,697.25 crore.
