Stock market cheers China dumping Xi Jinping’s’ ‘Zero Covid Policy’ -

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By S Jha

New Delhi, December 27: The global equity markets are giving 24-gun salute to China abandoning ‘Zero Covid Policy’. The suicidal ‘Zero Covid Policy’ of Chinese President Xi Jinping has been buried in the South China Sea for all practical purposes, as authorities lifted most of the restrictions.

With the mandatory quarantine norms now gone in China, the world is now hoping that the supply side constraints will ease which may help ease inflation. The global economy has been pushed into recessionary shadow solely on account of the supply side constraints caused by the ‘Zero Covid Policy’ of China and the Russian invasion of Ukraine. The subsequent hawkish rate hikes by the US Fed and its peers across the globe had given multiple jolts to the economic growth and also the equity markets.

After the bull took full control of the Dalal Street on Monday, the bourses stayed in the sideways mode in the early hours of the trade. But the principal beneficiary of the easing of the Chinese curbs is seen to be metals, and Hindalco, Tata Steel and JSW Steel gave leadership to the markets to lift the indices to the higher levels. The metal prices in the global markets are rising, which augur well for the metal stocks in India, which had been battered in the last few months, losing as much as 50 per cent from their peaks. Copper prices are up by over 3.3 per cent to $3.9, the highest since November 11, as a fallout of China announcing easing of coronavirus rules. The renewed demands for metals, including copper, steel and aluminum, can bring a new momentum to the equity markets even while the banking space has been going strong this year.

The foreign institutional investors against had a net sell of Rs 868 crores. But their domestic counterparts continued buying into the markets, pumping in a net of Rs 622 crores. The turnaround in the global equity market has come despite the age-old notion that there is a selloff in the year-end.

Vedanta and NMDC also strongly gained in the market. Kitex, the kidswear garmet manufacturer, zoomed by over 13 per cent, making a move after a long period of consolidation, when the scrip had underperformed the broader market. This textile company has completed its shift in the base from Kerala to Telangana, with a massive capex. Centum gained almost 20 per cent, while the sugar stocks again buzzed in the Tuesday session.