Equity benchmarks the Sensex and the Nifty ended lacklustre on December 28 in light of weak global cues as investors remained cautious observing the Covid situation in China.
Surging Covid cases in China has raised concerns that it may spread to other countries too which can lead to new restrictions. All this can harm the global economy which is already struggling due to soaring inflation and sharply rising interest rates.
A Reuters report suggested that Chinese hospitals and funeral homes were under intense pressure on December 28 as a surging Covid-19 wave drained resources.
"Covid cases have sharply aggravated in China and are fast spreading to countries like Japan, South Korea, Thailand and US. While the world economy is already struggling with fears of recession, the sharp spread of Covid to other countries could result in additional global curbs," said brokerage firm Motilal Oswal Financial Services.
However the brokerage firm believes, Covid is less likely to surge in India given comprehensive vaccination coverage and early preparedness by the government.
Sensex traded volatile during the session. It opened 116 points lower at 60,811.52 and touched its intraday high and low of 61,075.33 points and 60,713.77 respectively.
The index finally closed at 60,910.28, down 17 points, or 0.03 percent while the Nifty ended the day at 18,122.50, down 10 points, or 0.05 percent.
Mid and smallcaps outperformed the benchmarks. The BSE Midcap index rose 0.23 percent while the Smallcap index clocked a gain of 0.45 percent.
Crude oil prices declined amid reports of a sharp jump in Covid cases in China. Brent Crude traded about half a percent lower near the $84 per barrel mark. The rupee fell one paise to end at 82.87 per dollar.
Top Sensex gainers: Titan, Mahindra & Mahindra, Power Grid, Maruti and IndusInd Bank ended the day as the top gainers in the Sensex index.
Top Sensex losers: Bharti Airtel, Axis Bank, Tata Steel, UltraTech Cement and Bajaj Finserv ended as the top laggard stocks in the Sensex kitty of stocks.
Sectoral indices ended mixed. The Nifty Consumer Durables and Oil & Gas indices rose more than a percent each.
While Nifty Healthcare and Pharma indices fell over half a percent each, Nifty Auto, Media and Realty indices ended over half a percent higher.
Experts' views on markets
Vinod Nair, Head of Research at Geojit Financial Services observed that the market wavered between gains and losses with investors taking their position around the flatline as mixed global cues troubled them to take a firm one-sided move.
Nair pointed out that the US stocks were weak as the trade deficit data suggested strength in the economy, raising concerns about the Fed's tightening stance. However, steps toward reopening the Chinese economy increased the prospect of demand recovery.
Ajit Mishra, VP of Technical Research at Religare Broking said indications are pointing towards a rangebound trend to continue in Nifty. Stock-specific moves will keep participants occupied due to the scheduled expiry of December month derivatives contracts.
"The broader indices are also showing some stability so participants can selectively look for buying opportunities," said Mishra.
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas pointed out that the daily chart of Nifty shows that the index has moved up to retest a trendline, which was broken on the downside on Friday last week.
"18,150-18,200 is the key resistance zone, which proved to be a crucial barrier for the day. As long as the index stays below this resistance zone on a closing basis, it is likely to witness consolidation in the short term. 18,000-18,200 can be the tight range for the Nifty with crucial support placed at 17,800," said the analyst.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.