Indian shares were firm in early trade today, lifted by strong performance in auto stocks following monthly sales data, even as investors remained cautious over the spike in Omicron cases. With several markets in Asia and Europe closed, trading volumes in India is likely to remain muted. The Sensex was up over 550 points while Nifty rose 0.95% to trade firm above 17,500.
“17200-17300 may act as an important levels in the market for Nifty to stay positive. If the market sustained the level of 17200-17300 we can expect it to trade till the range of 17500-17600. Technical indicators also support positivity in the market,” said Gaurav Garg, Head of Research, Capitalvia Global Research.
IT and financial stocks led the gains with TCS, Bajaj Finserv, Axis Bank, HDFC Bank and ICICI Bank up between 1.5% and 2%. Among auto stocks, Maruti rose over 1%.
“The Nifty is in positive terrain, the breakout level was 17350 and we managed to close above that on Friday. This should allow the index to move higher to 17575-17600 and then 17800. A good base has been formed at 17100 and as long as we can keep above that, all dips can be utilized to accumulate long positions,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
On his outlook for 2022, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, says: “Investors should prepare for modest returns in 2022 with outperformance expected from financials, IT, telecom and construction related segments. “The biggest support to the global market rally is coming from the mother market US which is on a secular rally.”
On risk factors, he said: “Even though Omicron is spreading fast, the market doesn’t expect any restriction on economic activity that will impact growth and earnings. A trigger that can break this uptrend is a sharp rise in inflation and the Fed and other central banks hiking interest rates above market’s current expectations. If inflation comes under control, markets may continue the rally.”
Sectors to shine in 2022
“IT’s outperformance (60%in 2021 and 55% in 2020) is likely to continue in 2022 too. Private Bank’s underperformance ( 4.58% in 2021) is likely to be reversed in 2022 with improving credit demand, declining NPAs and rising margins,” said Vijayakumar of Geojit Financial Services.
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