Benchmark equity indices rose sharply on Friday, making a strong opening on the final session of calendar year 2021.
The S&P BSE Sensex opened 300 points higher to reclaim 58,000 while the NSE Nifty 50 crossed 17,300 after rising 100 points. At 10:15 am, Sensex was up over 400 points while Nifty was trading nearly 1 per cent higher.
Some of the top gainers in early trade were Reliance Industries Limited (RIL), Titan Company, Hindalco and Axis Bank. NTPC, IndusInd Bank and ONGC were among the top losers on Nifty in early trade.
Broader markets also opened on a positive note despite concern over rising cases of Omicron in India and around the world.
BEST YEAR SINCE 2017
It may be noted that Indian shares were set to mark their best year since 2017, boosted by a sharp recovery in economic activity following the devastation caused by the coronavirus.
Measures taken by the government and the Reserve Bank of India (RBI) this year helped boost liquidity, providing cushion to Dalal Street investors.
However, the sharp surge in Omicron cases has again made investors nervous and there are chances that volatility will spike as the new variant could lead to short-term economic disruption. Rising global inflation remains another major concern for market participants.
Santosh Kumar Singh, head of research, Motilal Oswal Asset Management Company, told news agency Reuters that inflation and tighter liquidity could make markets volatile.
“With inflation moving up and the Fed showing its intention to tighten liquidity, markets in the last couple of months have been a bit volatile with foreign investors being sellers almost on a daily basis,” Singh said.
“Hence, 2022 is starting with an expectation of tightening liquidity, increasing interest rates and uncertainty around Covid still remaining,” he added.