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Indian equity benchmarks continued their bull run for fourth straight session on Wednesday, with Sensex reclaiming the psychological 60,000 levels and Nifty ended above 17,900 mark. Markets made cautious start, amid concerns about increasing cases of the Omicron variant of COVID-19. Traders also remain worried with a private report indicated that growth might be impacted by up to 0.30 per cent in the March quarter as normal economic activities come under pressure due to restrictions being imposed by more states to curb rising Omicron cases. However, key gauges soon turned positive, as traders turned optimistic with State Bank of India former chairman Rajnish Kumar’s statement that country needs to accelerate economic growth to above eight per cent to achieve its target of becoming a $5-trillion economy by 2025.

Sentiments remained positive in the second half of the session, as commerce ministry is planning to launch Brand India Campaign to give momentum to exports of both services and products in new markets, as the country’s outbound shipments all set to cross $400 billion this fiscal year. This campaign would serve as an ‘umbrella campaign’ for promoting goods and services exported by India. Traders took some support with Apparel Export Promotion Council (AEPC) Chairman A Sakthivel stating that strong demand and healthy order books will further help in boosting the country's exports in the coming months. Traders overlooked report that India's services sector expanded for a fifth straight month in December, though the growth pace was slower  against the previous month, as demand rose but concerns over another wave of COVID-19 and inflationary pressures cast a shadow over the outlook. Services Purchasing Managers' Index, compiled by IHS Markit, eased to 55.5 in December from 58.1 in November, the lowest since September but still well above the 50-mark that separates growth from contraction. 

On the global front, European markets were trading higher even as the euro zone services PMI was finalized at 53.1 in December, down from November's 55.9. The Composite PMI was finalized at 53.3, down from November's 55.4, signaling the softest expansion in combined manufacturing and services output since March. Asian markets ended mostly in red on Wednesday as Covid-19 worries lingered and investors awaited the minutes from the U.S. Federal Reserve's latest meeting for clues on the central bank's interest rate hike moves. Geopolitical tensions also remained in investors' radar after North Korea reportedly fired a suspected ballistic missile off its east coast.

Back home, on the sectoral front, road sector stocks were in focus as domestic rating agency Icra said the Indian road logistic sector is likely to witness healthy growth in FY2022 on the back of demand recovery and improved business activities. Stocks related to pharma industry were in limelight with Ratings agency ICRA in its latest report stated that the Indian pharma industry is estimated to grow at 9-11 per cent in 2021-22 and in the next few quarters, supported by gradual recovery post the impact of COVID-19.  Textile industry’s stocks too were buzzing as Union Minister Piyush Goyal said the government is making efforts towards gaining access to new markets and getting concessional duties on textile products through free-trade agreements.

Finally, the BSE Sensex rose 367.22 points or 0.61% to 60,223.15 and the CNX Nifty was up by 120.00 points or 0.67% to 17,925.25.          

The BSE Sensex touched high and low of 60,332.72 and 59,661.38, respectively and there were 18 stocks advancing against 12 stocks declining on the index.     

The broader indices ended mixed; the BSE Mid cap index rose 0.36%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Bankex up by 2.43%, Finance up by 1.85%, Metal up by 1.61%, Oil & Gas up by 1.43% and Realty up by 1.25%, while IT down by 1.87%, TECK down by 1.52%, Power down by 0.32%, Healthcare down by 0.31% and Consumer Durables down by 0.11% were the top losing indices on BSE. 

The top gainers on the Sensex were Bajaj Finserv up by 5.09%, Bajaj Finance up by 4.44%, Kotak Mahindra Bank up by 3.70%, Axis Bank up by 2.56% and Tata Steel up by 2.46%. On the flip side, Tech Mahindra down by 2.87%, Infosys down by 2.71%, HCL Technologies down by 1.69%, Wipro down by 1.13% and Power Grid Corporation down by 1.00% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that the Indian pharma industry is estimated to grow at 9-11 per cent in 2021-22 and in the next few quarters, supported by gradual recovery post the impact of COVID-19. In a sample of 21 Indian pharmaceutical companies, it said revenue growth was moderate at 6.4 per cent in the second quarter of FY22, down from 16 per cent in the first quarter of 2021-22.

According to the report, the normalisation of the base and pricing pressures in the US market were the major reasons for slowing growth momentum in Q2 FY22, even as growth under domestic and emerging markets remained healthy. In FY22, the sample set is estimated to have witnessed growth of 13-15 per cent in the domestic market, 14-16 per cent in the emerging markets and 9-11 per cent in the European business. In the domestic market, it said a combination of steady normalisation in hospital footfalls and field force operations, given the relatively lower restrictions on account of COVID-19, continued traction in acute therapies and better pricing supported healthy revenue growth across companies.

Going forward, the ratings agency said sustenance of trend in doctor visits and elective surgeries given the news around the Omicron variant, and performance of new launches in addition to revenue growth momentum in the acute segment will remain key monitorables. It said the outlook for the pharma sector remains stable led by healthy revenue growth and margins. It expects the sample set's capital structure and coverage indicators to remain comfortable despite higher capex and R&D (research and development) expenses given the robust cash levels.

The CNX Nifty traded in a range of 17,944.70 and 17,748.85 and there was 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 4.95%, Bajaj Finance up by 4.39%, Kotak Mahindra Bank up by 3.46%, JSW Steel up by 3.37% and Grasim Industries up by 3.06%. On the flip side, Tech Mahindra down by 2.84%, Infosys down by 2.69%, HCL Technologies down by 1.66%, Divi's Lab down by 1.38% and Wipro down by 1.09% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 16.20 points or 0.22% to 7,521.35, France’s CAC increased 34.92 points or 0.48% to 7,352.33 and Germany’s DAX increased 100.30 points or 0.62% to 16,252.91.

Most of the Asian markets finished in red on Wednesday, with the risk aversion in the market ahead to the release of the US Federal Reserve's December meeting minutes which might provide clues on Central bank’s interest rate hikes. Asian indices also got saddled with the hefty sell off in technological sector stocks in line with US tech shares. Meanwhile, accelerating covid-19 cases also dulled investors' sentiments. Heng seng stocks eased as investors got wary of huge tech sell off amidst several recent billion-dollar divestment plans of Tencent Holdings. China’s Shanghai also settled negative after the country's top market regulator imposed fines against Alibaba, Tencent Holdings and Bilibili Inc for failing to properly report about a dozen deals.

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