05 Jul , 2021 By : Kanchan Joshi
Mumbai: Indian stock markets were trading 0.6% higher on Monday amid steady fall in covid-19 cases and gains in global equities. Gains were mainly led by index heavyweights HDFC Bank, Reliance and ICICI Bank.
The benchmark Sensex was 0.6% higher at 52807.41 points, while Nifty gained 0.61% to 15817 points.
Asian stocks were steady early Monday after US shares climbed further on speculation the Federal Reserve has scope to continue providing substantial stimulus support.
Back home, investors are eyeing key macro economic data due later this week and first-quarter earnings. Tata Consultancy Services will kickstart the earnings season with its results on 8 July.
"The second COVID wave in Apr-May’21 has soured sentiments and impacted economic activity. Since restrictions this time around were localized and less stringent v/s the lockdown in CY20, we expect the impact in 1QFY22 to be contained. We expect earnings momentum to accelerate in FY22 as the pace of vaccinations picks up and the economy opens up further. BFSI and commodities are expected to drive FY22E earnings. The market has been strong and largely looked through the second COVID wave on the back of strong liquidity and robust participation from non-institutional investors," said the Motilal Oswal report.
Analysts say equity markets may continue to consolidate in the near term given the worry over the potential risk from covid third wave, commodity-price led inflation and in the absence of any fresh trigger. Investors would take cue from US jobs data and US PMI data due later today.
"Nifty valuations at the current juncture are not inexpensive and demand consistent earnings delivery ahead. Any disappointment on the earnings front could weaken the overall positive sentiments. However, we expect the earnings momentum to accelerate given the pickup in the pace of vaccination and the further opening of the economy. Good monsoon further supports bullish biasedness", Motilal Oswal added.
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