Benchmark stock market indices opened higher on Monday, starting the week on a positive note. Pharma and healthcare stocks jumped in early trade on the back of Sun Phrama announcing the biggest acquisition in its history, agreeing to buy US-based Organon & Co. in an all-cash deal valued at $11.75 billion, including debt.
The S&P BSE was up by 523.17 points to 77,187.38, while the NSE Nifty50 jumped 158.35 points to 24,056.30 as of 9:22 am.
Vinod Nair, Head of Research, Geojit Investments Limited, said that with the geopolitical situation showing no improvement and crude inching higher the implications for India’s macros and markets continue to be negative in the near-term.
“Markets will continue to remain volatile responding to news. Even though geopolitics and energy crisis are dominating the news a major factor impacting stock markets continues to be the AI trade,”: he added.
The US market, driven by AI trade, is at record highs and Nvidia has crossed market cap of $ 5 trillion. AI leaders like South Korea and Taiwan are attracting huge FPI flows at the cost of emerging markets like India. It is important to understand that one stock in Taiwan (TSMC) and two stocks in South Korea ( Samsung and SK Hynix ) account for lion’s share of the portfolio flows into these two countries. This is unlikely to continue for long. Any reversal of AI trade will also alter the direction of portfolio flows.
In the current state of total uncertainty investors can wait and watch the geopolitical developments and take decisions as clarity emerges. Despite the macro threats emerging from the energy crisis India’s growth momentum is showing resilience and optimism as indicated by the recent rising private capex numbers.