BENGALURU, Dec 31 (Reuters) - Indian shares on Friday locked
in their best year since 2017, driven by an economic recovery
from the pandemic-led slump and infusion of massive liquidity,
even as valuation concerns and a raging new coronavirus variant
brought in some caution towards the year-end.
The NSE Nifty 50 index gained 0.87% to 17,354 and
the benchmark S&P BSE Sensex rose 0.8% to 58,253.82.
The NSE and BSE indexes rose 24% and 22%, respectively, for the
India's blue-chip Nifty 50 was one of the best performer
among emerging markets in Asia in 2021, and outpaced the MSCI
World Index which rose 17%.
"What we saw over the past two years was mostly a liquidity
supported rally. If the U.S. Federal Reserve goes ahead with a
faster than expected tapering and there is reversing of interest
rate cycle, then these are definitely going to impact the
market," said Ajit Mishra, VP - Research, Religare Broking.
"Almost all the sectors are trying to recover to pre-COVID
levels and these kind of repeated infections (like the Omicron
variant) will definitely dent the sentiments."
Indian equities scaled a record high in October, but have
retreated nearly 7% on worries over high valuations and the
spread of Omicron across the globe.
Indian authorities began to impose stringent rules on
Thursday to prevent mass gatherings at New Year parties and
public venues to combat a spike in COVID-19 infections.
This year also saw several initial share sales, including
those of India's biggest from digital payments start-up Paytm
, as ample liquidity and strong retail participation
pushed the stock market to record levels.
Meanwhile, Indian ministers on Friday deferred plans to hike
tax rates on textile items, the federal finance minister said,
after protests by industrial associations and some states.
The Nifty bank and metals indexes
were the top boosts on Friday, rising 1.2% and 1.9%
(Reporting by Nallur Sethuraman and Chris Thomas in Bengaluru;
Editing by Shailesh Kuber)