Rising COVID cases, soft global cues subdue equities; metal stocks fall

MUMBAI: India's key equity indices — S&P BSE Sensex and NSE Nifty50 — broke their two-day winning streak on Wednesday amid low volumes. Besides, rising domestic cases of COVID-19 also subdued investor sentiments.

Initially, the indices opened lower amid softer global cues but recovered soon afterwards. However, they ceded all their gains and fell sharply during the last half hour of the day's trade.

Globally, markets paused their Christmas rally as investors became cautious with rising Omicron cases. On the domestic front, among sectors, except for pharma, auto and consumer durables, all other sectors ended in red with metal and media indices down by almost 1 per cent each.

Consequently, the S&P BSE Sensex closed at 57,806.49 points, down 90.99 points or 0.16 per cent from its previous close.

Similarly, the broader 50-scrip Nifty at the National Stock Exchange (NSE) fell to 17,213.60 points, up 19.65 points or 0.11 per cent from its previous close.

"Nifty found resistance on the downward sloping trend line adjoining previous swing highs on the daily chart. The 50 days EMA has also been acting as a hurdle for the Nifty at 17,340," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Nifty has got strong support at the 17,050 levels, derived from the upward sloping trend line, adjoining previous swing lows on the daily charts," he added.

According to Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services: "Markets are expected to remain sideways until the end of the year due to thin volume, lack of trigger and rising Omicron cases.

"Q3 results season and build up to the upcoming budget session would be key events that the market would be looking for in January 2022."

Vinod Nair, Head of Research at Geojit Financial Services, said: "Emergency use authorisation for COVID vaccines Corbevax and Covovax along with the clearance of anti-viral drug Molnupiravir for restricted use boosted the appetite for most pharma stocks today.

"Multiplex stocks have taken a hit following closure of cinema halls due to stricter COVID restrictions in Delhi, while mid and small-caps outperformed." (IANS)

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