US Equities close at record level in pre-holiday rally - Reliance Securities

Pre-Market Views - Dec 24, 2021 - Mr Mitul Shah, Head Of Research at Reliance Securities.

US equities closed at a record level in a pre-holiday rally along with positive data that suggested the Omicron variant was less likely to impact on the economy. The S&P closed at an all-time high and gained 0.62%, while the Dow ended up 0.55%, while Nasdaq closed 0.85% higher. The markets weighed a trove of economic releases ahead of the holiday weekend. The Labor Department reported that initial jobless claims at 205,000, sustaining a downward trend from the highs of their pandemic peak. Meanwhile, U.S. consumer prices accelerated at the fastest pace in nearly four decades as shoppers confront rising inflation levels ahead of the holidays.

Domestic equities extended gains on a third straight day, tracking strength across global markets despite increasing cases of the Omicron variant of COVID-19. Gains were across most sectors, led by financial, auto, metal and healthcare stocks, pushed the indices higher. Nifty gained 0.7%, broader markets also strengthened, with the Nifty Midcap 100 ending 0.9% higher and its Smallcap counterpart rising 1.3% for the day. The government's focus is clearly on supporting growth through sufficient liquidity and low interest rates despite street fears over rising inflation, changes in interest rate policy by global economies and high commodity prices. However, India is at the beginning of capex revival phase and therefore corporate earnings recovery looks sustainable and premium valuations might sustain. We believe that India is better placed compared to major global economies in terms of handling Covid and its spread, while revival of capex and higher growth potential over next 1-2 years would keep Indian economy expansion ahead of many other nations. This would lead to bounce back in Indices going into 2022. The markets are likely to see gap up opening today. SGX nifty is up 77 points to yesterday's closing. Asian markets trading in green (Nikkei up 0.83%, while Hangseng is largely flat).

Source : Equity Bulls

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PreMarketViews USMarkets RecordHigh PreHolidayRally RelianceSecurities DOW NASDAQ