Indian stocks hit a record high on Wednesday before a late sell-off sent the Sensex down 14.77 points or 0.03% to end the day at 55,944.21. The Nifty, however, closed at a record high, up 10.05 points or 0.06% to 16,634.65.
Other Asia-Pacific markets reacted differently to the rally in US stocks. Hong Kong’s Hang Seng Index fell 0.13%, but the Shanghai Composite Index in China jumped 0.74%.
“Markets opened positively, but major indices closed on a flattened note due to the moderate performance of large caps. The broader market was up as mid caps rebounded from the August correction, boosting investor morale. Global markets have traded positively on the approval of the covid vaccine and in anticipation of the conciliatory comments from the chairman of the US Federal Reserve at the next meeting, ”said Vinod Nair, head of research at Geojit Financial Services Ltd .
World Health Organization chief scientist Soumya Swaminathan’s observations on India’s possible entry into the endemic phase of the coronavirus pandemic may also have boosted investor sentiment, analysts said.
According to S. Hariharan, Sales Manager, Emkay Global Financial Services Ltd, the size of the market continued to be moderate, with large caps outperforming mid and small caps. “As long retail positioning declines, FII’s net long positioning in individual equity futures has reached nearly eight-month highs. The narrowness of the market has tended to lead to pullbacks in the past, however, extremely accommodating monetary conditions in India, as well as around the world, provided conditions for extremely shallow corrections, ”he said.
Enthusiasm in primary markets has also cooled considerably, with three of the last four listings opening below their issue price despite the oversubscription of initial public offerings (IPOs). “This opens up an exciting prospect for program alignment, amounting to ??30,000 crore in the coming month. We can expect extremely oversold conditions in the small-cap universe to ease, while larger markets will continue to trade within ranges, ”Hariharan said.
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