28 May , 2021 By : Kanchan Joshi
MUMBAI: The Nifty hit a fresh record high on Friday, driven by positive investor sentiment while a rally in global equities lent support. The 50-share index hit a new high of 15455.55, breaching previous high at 15,431.75 on 16 February. The Sensex climbed 324.69 points or 0.64% to 51,439.91.
Asian stocks put global equities on course for seventh day of gains on Friday as investors bet the US will lead the world out of the covid pandemic, with focus turning to a multi-trillion dollar spending boost by President Joe Biden's administration. The New York Times reported that Biden will seek $6 trillion in federal spending for the 2022 fiscal year, a day before the White House is expected to unveil its budget proposal.
“Falling weak virus cases in India certainly pave the way for the progressive removal of restrictions on economic activity. The global cues are positive with the US economy showing rise in jobs indicating sharp economic recovery. An important trend in the market is the outperformance of midcaps vis-a-vis the Nifty," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Meanwhile, the update on monsoon has also boosted investor sentiment. The crucial southwest monsoon has advanced in more parts of southwest and east central Bay of Bengal and conditions are favourable for its onset over Kerala around 31 May, the India Meteorological Department (IMD) said on Thursday. A normal monsoon will boost farm sentiment. However, global food prices are the most critical determinant of rural incomes and hence it remains key monitorable going ahead, according to analysts.
According to Bloomberg, India is preparing a stimulus package for sectors worst affected by a deadly coronavirus wave, aiming to support an economy struggling with a slew of localized lockdowns. The finance ministry is working on proposals to bolster the tourism, aviation and hospitality industries, along with small and medium-sized companies.
The second wave of covid-19 in India appears to have peaked, as daily new case count and positivity rate have fallen over the past few days, according to Tanvee Gupta Jain, economist, UBS. The UBS-India Activity Indicator slipped to 78.6 during the week ended 23 May, the slowest weekly decline since end-March. The indicator suggests that economic activity contracted an average 14% month-on-month (m-o-m) from May to date after declining 7% m-o-m in April 2021.
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