Sensex, Nifty Seen Opening Higher After GDP Data

Indian shares look set to open higher on Wednesday as investors react to positive GDP and core sector output data.

India’s economic growth remained robust in the September quarter, preliminary data from the government showed, after the pace of expansion hit a record in the previous three months boosted by a low base-effect due to the coronavirus pandemic last year.

GDP grew 8.4 percent year-on-year in the three months to September, in line with economists’ expectations. In the same quarter of 2020, the economy had contracted 7.4 percent as the coronavirus ravaged economic activity across the country.

Meanwhile, India’s core sector output growth accelerated, with the eight-industry core sector expanding 7.5 percent in October, against a seven-month low of 4.5 percent in September, on the back of appreciable increases in the production of cement, coal, refinery products and electricity.

On the Covid-19 front, Shahid Jameel, who is the former head of the advisory group to the Indian SARS-COV-2 Genomics Consortia (INASACOG), said that a “very large” number of Indians are likely to remain protected from Omicron or any other variant of Covid-19 and there is no need to panic.

Benchmark indexes gave up early gains to end slightly lower on Tuesday, while the rupee settled 10 paise lower at 75.17 against the dollar on worries over the new coronavirus variant.

Asian markets were mixed this morning and higher U.S. Treasury yields supported the dollar, while oil recovered from the previous day’s sell-off ahead of a meeting by the Organization of the Petroleum Exporting Countries.

U.S. stocks fell sharply overnight after Moderna CEO Stephane Bancel said that existing Covid-19 vaccines would have trouble countering the Omicron variant.

Markets saw further downside after Fed Chair Jerome Powell said during Congressional testimony that the emergence of Omicron has raised the uncertainty around inflation and that the Fed might end its pandemic-era stimulus sooner than expected.

The Dow and the S&P 500 both fell around 1.9 percent to reach their lowest closing levels in at least a month, while the tech-heavy Nasdaq Composite index shed 1.6 percent.

European stocks also ended lower on Tuesday amid increasing uncertainty over economic growth and inflation.

The pan European Stoxx 600 gave up 0.9 percent. The German DAX lost 1.2 percent, France’s CAC 40 index declined 0.8 percent and the U.K.’s FTSE 100 slid 0.7 percent.

Market Analysis