Investor sentiment was boosted following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital. Indian benchmark equities are trading more than 1 per cent higher today in the background of the signs of progress in peace talks between Russia and Ukraine to end their weeks-long conflict. Sensex and Nifty have rose for the second straight session, however, traders seem to be awaiting for directional cues.
Against this backdrop, Reliance Industries, HDFC twins, ICICI Bank, Bajaj Finance, and Kotak Bank lifted the benchmark S&P BSE Sensex 740 points higher to end at 58,684. The NSE Nifty50, meanwhile, leaped 173 points to settle at 17,498. The 50-pack index was additionally supported by Bajaj Finserv, Hero MotoCorp, Grasim, Tata Consumer, M&M, and Axis Bank. However, losses in ITC, Tata Steel, ONGC, Hindalco, JSW Steel, Tech M, Coal India, and IOC kept gains in check.
In the broader markets, the BSE MidCap index added 0.7 per cent while the BSE SmallCap index gained 1 per cent.
Neeraj Chadawar, head of quantitative equity research, Axis Securities, said: “In the last two weeks, some recovery is visible in the market from the oversold zone led by key drivers like peace talk between Russia-Ukraine, FED decision on an expected line, and State election results in favor of the ruling government. With all these developments, risk appetites are back in the market with India VIX now trading at around 21 levels which is slightly below the long-term average of 22. Investors’ sentiments further improved with ease in crude prices that lead to more buying interest, especially towards riskier assets like equity.”
“In the near term, market performance is likely to be range-bound, as the clear trend is likely to emerge only after the volatility sustains at current levels for a longer time. Q4FY22 earnings commentaries remain critical at this juncture. Further, the number of downgrades/upgrades will have to be monitored for the quarter (due to the higher input cost pressure,) and that will drive the market fundamentals. We continue to hold a positive long-term view on the market supported by the emerging favorable structure as increasing Capex spending enables banks to improve credit growth. Overall, the Indian market has entered into an upcycle of earnings with an expectation of 20 per cent Nifty EPS CAGR growth over FY21-24, which was in a single digit of 7 per cent over FY09-21. We believe the market will likely follow the double-digit earnings growth in upcoming years,” Chadawar said.
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