The key Indian equity indices traded on a positive note on Monday morning led by healthy buying in banking stocks. Around 10.50 a.m., Sensex was trading at 50,681.29, higher by 140.81 points or 0.28 per cent from its previous close of 50,540.48.

It opened at 50,727.28 and has touched an intra-day high of 50,855.32 and a low of 50,465.90 points. The Nifty50 on the National Stock Exchange was trading at 15,205.30, higher by 30.00 points or 0.2 per cent from its previous close.

The top gainers on the Sensex were State Bank of India, Larsen & Toubro and Maruti Suzuki India, while the major losers were Titan Company, UltraTech Cement and Hindustan Unilever.

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Support to markets

Hopes on a gradual unlocking of the economy as Covid's second wave subsides will support the domestic equity indices' upward trajectory this week. According to market observers, other factors such as expectations of a fresh stimulus as well as healthy quarterly results will further push the key indices' higher.

"Partial lifting of lockdown will raise hopes of early resumption of economic activities across the country, though gradually. The second Covid wave seems to be coming to an end over the next couple of weeks. This expectation has lifted sentiments in the equity markets," said Deepak Jasani- Head of Retail Research at HDFC Securities.

"Hopes of a fresh stimulus, encouraging PMI data from across the globe and some bright spots in Q4 results have also helped stocks to continue their uptrend. All these could help Nifty gain some more in the coming week and probably reach a new high over the next few weeks."

Last week buying

Last week, domestic equities logged robust returns led by broad-based buying across sectors. In the just-concluded weekly trade, better-than-expected corporate earnings and positive global cues boosted sentiments.

Consequently, the NSE Nifty50 rose by 3.4 per cent over the week, similarly, the S&P BSE Sensex gained by 3.7 per cent. Nevertheless, a sharp selloff across crypto assets capped gains.

"The equity market closed on a stronger note with continuing improvements in the number of fresh cases and recoveries, which is a clear indication that probably the pandemic is peaking out, and we may see the economy coming out of the lockdown earlier than expected," said Joseph Thomas, Head of Research, Emkay Wealth Management.

"The more or less upbeat results season also has endowed the markets with enough reasons to gather comfort about the future." According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services: "The overall structure of the market remains positive from the long term perspective."

Global economic revival

"Global economic revival, the risk of pickup in inflation and development on the Covid-19 front domestically would decide the market direction going ahead." Recently, the number of new Covid-19 infections have come down, whereas, recovery rate has picked up pace.

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Investors believe that the trend will lead to a gradual lifting of regional lockdowns. Besides, it is expected that a higher vaccine supply in the coming days will accelerate the revival process.

In addition, Geojit Financial Services Research Head Vinod Nair: "The entry of new vaccines in the market which will ease supply crunch and a steady decline in the new covid cases are factors boosting investor confidence in the market."

"Hence the market will continue to focus on covid numbers to pump in more optimism into the market due to a relatively quiet week for economic data."

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