It was another day of losses for the markets, despite good cues from across Europe where most of the markets were trading with gains.
The Sensex plunged 470 points, as investors continued to remain worried on record covid-19 deaths. Rising bond yields in the US also impacted sentiments. The Nifty finally ended the day lower by 154 points. Leading the set of losers were the metal stocks with Tata Steel, JSW Steel, Hindalco and IndusInd Bank among the top losers.
Banking stocks too ended the day lower, with the Bank Nifty down almost 1.30 per cent. Yes Bank, however, managed to buck the trend and ended the day with gains.
"Resurgence of the second COVID wave has dented sentiment and impaired the FY22E earnings visibility. With multiple states entering into extended lockdowns and restrictions, we see downside risks to FY22 earnings estimates. 4QFY21 earnings are progressing largely in line with expectations but management commentaries have turned cautious.
Thus markets are likely to remain range bound in the near term. We expect Nifty to trade between 14600-15050. The interplay of the resurgence in COVID cases and the pace of vaccination would decide the trajectory of economic recovery going forward. The Nifty now trades at 12M forward P/E of 19.4x, ~3% above its historical average of 18.8x. At 2.9x, Nifty P/B is well above its historical average of 2.6x," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said.