05 Jan , 2022 By : monika singh
Mumbai: Stocks extended gains on Tuesday to the second trading day of 2022, as investors took in stride concerns over the spike in Omicron cases in the belief that the impact of the new Covid-19 strain will be less devastating than previous ones.
Renewed purchases by foreign funds raised hopes that outflows, which have weighed down equities since October, might be over for now, but rich share valuations are keeping investor optimism under check.
Over 2.7% Gains in 2 Sessions
The Nifty ended at 17,805.25, up 179.55 points or 1%. The Sensex closed at 59,855.93, up 672.71 points or 1.14%. Both indices gained over 2.7% in the first two trading sessions of the new year.
Though the five times increase in daily Covid cases reflects clear signs of a third wave, the stock market is less worried at this time, said CLSA investment analyst Vikash Kumar Jain.
"Unless we see alarming hospitalisation data, the market may digest this as a one-off pain as it works with the hope it will be a more infectious but less lethal wave," Jain said in a note to clients. "If this premise is not challenged, the upcoming budget, quarterly results and state elections will be more important."
Several states including Maharashtra, West Bengal, Haryana and Delhi have announced mobility restrictions to contain the spread of Omicron, which could impact businesses such as leisure, travel and entertainment through the March quarter. But investors are betting that such curbs will not derail growth.
With gains in the past two days, the indices are inching closer to reclaiming all-time highs scaled on October 19 - 62,245.43 for the Sensex and 18,604.45 for the Nifty.
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