nifty closed at 17,633.20 with a gain of 279.15 points or 1.61% and Sensex It closed 929.40 points or 1.6% higher at 59,183.22. Analysts said Nifty may face hurdles in the 1,7650-17,750 zone and if it is cleared, it could move towards 18,000. Both the indices are now down almost 5% from their record highs of October 19.
Sanjeev Prasad, Co-Head, Kotak Institutional Equities, said, “Observations and data from scientists from several countries show that the new variant is more permeable, but the symptoms are mild for people with vaccination and increased, which is a good sign. ” “Omicron’s threat and to a lesser extent a US Fed rate hike has a price.”
Investors are hoping that restrictions imposed by states will be less severe if hospitalization and mortality rates are lower. Some of them have imposed restrictions on the movement and gatherings of people due to the rise in omicron cases, but there has been no lockdown yet.
Piyush Garg, CIO, ICICI Securities said, “There is no large scale lockdown in any country. There are restrictions but no lockdowns. The severity of the infection is low as per the hospitalization trend.” Bajaj Finserv and Bajaj Finance were the top losers in the Sensex, rising around 3.5% each. ICICI Bank, Tata Steel, IndusInd Bank, HDFC Bank, Axis Bank, State Bank of India and TCS rose 2-3%.
Foreign portfolio investors bought shares worth ₹902.64 crore on Monday, while domestic institutional investors bought shares worth ₹803.11 crore.
Analysts say costly valuations of the stocks may restrict further upside from current levels.
“Valuations are expensive and interest rates in India will also go up, which is not fully priced, especially if inflation surprises on the higher side,” Prasad said. “The incremental news has to be a lot more positive for the markets to go up.”
According to brokerage firm CLSA, Nifty’s estimated price-to-earnings (PE) ratio is more than 20 times and is now at a 31 per cent premium to the 16-year average.