Indian equities are in a solid uptrend amid resumption of FII buying, watered down Fed taper tantrum concerns, and a pick up in the vaccination drive.
On Thursday, the S&P BSE Sensex added 514 points, or 0.9 per cent, to end at 57,852.5 while the Nifty50 ended above the 17,200 for the first time at 17,234, up 158 points or 0.92 per cent.
Even in the broader markets, the BSE MidCap index advanced 0.9 per cent while the BSE SmallCap added 0.8 per cent.
However, a consistent rise in the coronavirus cases and fear of a third Covid wave is driving investors towards defensive bets. India reported over 49,000 new cases of Covid-19 in the last 24 hours, marking a 12 per cent rise in daily infections. This was also the biggest single-day rise in two months.
Reflecting the sentiment, the Nifty FMCG index and the IT index have risen 9.5 per cent and 7 per cent, respectively over the past one month, relative to a 7 per cent rise in the Nifty50 index.
Even on Thursday, both these indices gained 1.5 per cent each, outperforming all other sectoral and benchmark indices.
Given this, volatility, along with sector rotation, could be on cards over the next couple of sessions even as the overall trend remains positive.
Now, going into trade on Friday, investors will track stock-specific news, macroeconomic data, updates on Covid-19, and global trends.
All eyes would be on the Services PMI data of August, slated to be announced later in the day, after recently released Manufacturing PMI data showed a blip in the factory output.
In the primary, the three-day IPOs of Vijaya Diagnostics and Ami Organics will close today.
So far, the public issue of Ami Organics has been subscribed nearly 4 times while that of Vijaya has been subscribed around 50 per cent.
Globally, the US non-farm payroll data and Euro zone’s retail sales data for July will be the key data points to be tracked.