Indian stocks are expected to extend gains on Tuesday on the vaccine announcement, which came after market hours.
India’s benchmark indices logged their new all-time highs on Monday amid continued optimism around the US election results. The Sensex
closed at 42,597, up 704 points, or 1.7 per cent, while the Nifty
rose 197 points, or 1.6 per cent, to end at 12,461, extending the 5 per cent-plus gains posted last week.
It took both the indices 206 trading sessions to surpass their previous highs, made on January 14, a surprise recovery considering the economic damage caused by the Covid-19 pandemic and the free fall seen in March.
US stocks, too, jumped to fresh records in early trade after Pfizer Inc said its experimental Covid-19 vaccine was more than 90 per cent effective. The Dow Jones Industrial Average surged 4.6 per cent to its first intra-day record since February, while the S&P500 climbed 3.4 per cent. The Dow Jones was trading at 29,573, up 1,250 points, as of 08:50 pm IST.
Indian stocks are expected to extend gains on Tuesday on the vaccine announcement, which came after market hours. The Nifty
derivatives contract trade on the SGX rallied another 2 per cent.
The medical breakthrough comes at a time when investor sentiment is already buoyant after Joe Biden defeated incumbent Donald Trump in the US presidential elections. The election outcome is being seen as favourable for the emerging markets
as interest rates may remain low under the new administration.
across the globe have been riding high on aggressive stimulus measures taken by central banks, which many are hopeful will continue.
Experts said the gains in the domestic markets
were on account of this global optimism. “All global markets have rallied, spurred by very aggressive policy measures by global central banks. India has followed the pattern. It’s not as if India has done something extraordinary relative to the world,” said Shankar Sharma, founder and vice-chairman, First Global.
From the Covid-19 lows of 7,610 on March 23, the Nifty
is now up nearly 64 per cent.
“We have seen eight months of unprecedented liquidity infusion, which has never been seen before. Also, we may not see this in our lifetime — the election of Democrat president who might take a friendly stance towards world trade and emerging markets,” said Saurabh Mukherjea, founder, Marcellus Investments.
India is in the middle of the pack in terms of year-to-date returns. While the US, China, and South Korea have by far outperformed, India has done better than many European markets and EME peers such as Brazil, Thailand, and Indonesia. Many also point out that the market recovery has been lopsided with nearly half of the Nifty50
components still trading below their January levels. Overseas investors extended their robust buying spree, pumping in another Rs 4,584 crore on Monday. The overall market breadth was positive, with total advancing stocks at 1,485 and those declining at 1,206 on the BSE.