Indices started on a positive note after remaining shut for 3 consecutive days. And the winning run continued with Sensex reclaiming 50000 levels and Nifty hitting levels of over 14850 suggesting that barring intermittent profit taking, the bull run will persist.
Now importantly, the surge in equities has come despite some of the negative scenarios such as rising Covid 19 cases across the country, dollar's surge to a 1-year high today and rising US treasury yield.
What provided the fillip to equity markets today?
1. FIIs aggressive selling has seen a pause:
FIIs had been net sellers in Indian equity for the past five trading session and as there is seen some drop in it, markets are taking it positively. "A sharp decline in FII selling coupled with large buying by DIIs can support the market and even take it higher. DIIs and retail investors are likely to be buyers in banking, IT, cement and metal stocks, which look attractive at present levels. Year-end considerations also are likely to lead to further DII buying," Vijayakumar, Chief Investment Strategist at Geojit Financial Service said.
2. Swifter pace of Covid 19 vaccination:
After the senior citizens, now the vaccination drive for all aged above 45 years shall commence in the country from April 1. And as the progress on vaccination front outdoes rising Covid 19 cases, the sentiment on the Street is encouraging. "The second wave is unlikely to have a major impact on growth and corporate earnings. This exceedingly volatile phase of the market is turning out to be difficult terrain for traders. But, for long-term investors dips will provide opportunities to buy quality stocks. IT, financials, cement, chemicals are good bets", V K Vijayakumar, said in a report.
3. Global cues :
In the US only GDP came in better than expected and also for the last week, the count of people claiming unemployment benefit went lower. So, with improved economic landscape, there shall be improved risk-on sentiment that is one reason propelling indices higher. At the time of writing this story, European indices were also trading higher with gains of up to 0.6 percent.
4. Increase in retail participation in Equities:
Also, what is supporting domestic markets is that during the lockdown, the retail participation in equities has increased substantially. As per the date from the country's 2 major depositories, investor accounts surged by 1.04 crore in 2020.