Nifty Recovered on mRNA COVID Vaccine and RIL Optimism

  • Market Overview

India’s benchmark stock index Nifty (NSEI) closed around 15576.20 Wednesday, almost flat, but recovered from a moderate intraday plunge of more than 100 points after a report that Pfizer (NYSE: PFE ) said over 50M mRNA COVID vaccines ready to be delivered to India; talks ongoing for partial indemnity. Pfizer also said govt sources confirm that indemnity for vaccine liability will be given to Pfizer in India; it will be in line with the approach taken by U.S. & other countries administering such vaccines.

The reports also suggested that as of now, a complete waiver won't be given on the Pfizer vaccine by India. As per sources, normal reactions (side effects) to the vaccine are indemnified but the serious life-threatening reaction amounting to death or serious ailment like paralysis can't be given wavier and will carry liability. However, the talks are ongoing on priority and are expected to conclude by the end of this month.

As the U.S. has now enough stockpiles to vaccinate the entire population, mRNA COVID vaccine manufacturers like Pfizer/BTT and Moderna has now the adequate capacity to supply countries like India. These mRNA vaccines are superior to normal adenovirus vaccines (COVIDSHIELD, COVAXIN) in terms of both quality and quantity (ease of manufacturing on a huge scale in a short time unlike adenovirus platform). India’s problem may be lack of adequate extreme cold chain logistics, but if Pfizer/Moderna can offer some solution (like supply in powder/dry form in semi-fridge condition like Russian Sputnik vaccine), then it will be a great thing for India to eradicate COVID in a shorter timeframe.

On Wednesday, apart from m-RNA COVID vaccine optimism, Nifty was also boosted by a late rally in index pivotal Reliance Industries Ltd (NS: RELI ) (ahead of AGM); it contributed over +24 points in Nifty. There was a report that the oil-to-mobile conglomerate (RIL) may announce a 5G roll out, Jio-Google 5G smartphone, and an affordable Jio laptop.

After the market hours, RIL MD/CEO Ambani announced 5G testing with Qualcomm (NASDAQ: QCOM ) at 1GBPS speed, pre-payment of $7.8B of long-term foreign currency debt in FY21, strong balance sheet, upbeat retail grocery business (JioMart) but subdued refining business amid the destruction of oil demand in COVID lockdown 1.0. In the last 6-trading days, RIL jumped over +12% on hopes of petchem business margin expansion, rights issue, and blockbuster announcement in the AGM. Looking ahead, above 2215, RIL will move towards 2255 levels (new lifetime high) and fresh meaningful rally will be only sustaining above 2285-2315 zones for 2840-2965 levels by mid-2022.

All focus will be now on RBI (4th June), whether RBI announced QE-Lite 2.0, and its projections about the economy amid the COVID tsunami and full/partial lockdowns across India. On Wednesday, the Indian market was boosted by PSU Banks (SBI (NS: SBI ) optimism), metals (local steel price hikes), automobiles (better than expected sales in May), realty (new tenancy act proposal/reform), energy (higher oil prices and RIL optimism), MNC (higher USDINR ), infra, pharma, media, and selected private banks. The market was dragged by techs/IT (Infy insider trading fiasco) and FMCG (subdued report card by ITC (NS: ITC )).

Nifty was boosted by RIL, SBI, Tata Steel (NS: TISC ), Maruti (NS: MRTI ), UPL (NS: UPLL ), JSW Steel (NS: JSTL ), Indusind Bank, Adani (NS: APSE ) Ports, HDFC (NS: HDFC ) Life, Tata Motors (NS: TAMO ), Powergrid, and Bajaj Auto (NS: BAJA ). Nifty was dragged by ITC, HDFC Bank (NS: HDBK ), HDFC, Infy, TCS (NS: TCS ), Axis Bank (NS: AXBK ), Kotak Bank, Asian Paint, ICICI Bank (NS: ICBK ), and Tech-M.

Technical View: Nifty and Bank Nifty Future

Technically whatever may be the narrative, Nifty Future now has to sustain over 15525/15675-15725/15800 and Bank Nifty Future 35900-36550 levels for a further rally; otherwise except some corrections.


Nifty 50 Futures (IND50)

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