▲ Nifty: 12,874 (+0.74%) ▲ Sensex: 43,952 (+0.72%)
The markets opened with a gap-up and continued to trade in the green throughout the day, reflecting the optimism seen in the US markets following the news regarding Moderna’s Covid vaccine. Among the key sectoral indices, the Nifty Metal index gained the most (+2.49%) due to a strong jump in Tata Steel (+5.9%). Meanwhile, Nifty Media (-1.34%) was the top sectoral loser. Among the Nifty50 stocks, Tata Motors (+6.1%) and HDFC Life (+5.7%) were the top gainers, whereas BPCL (-4.2%), Hero Moto (-2.6%) and NTPC (-2.5%) were the top losers.
Here are the top stories of the day.
Travel theme takes off on vaccine news
Shares of airlines, hotels and tour operators attracted investors’ attention today as expectations are building up that the travel industry will be back on its feet after suffering from shutdowns due to Covid. The vaccine trials by US pharma companies Pfizer and Moderna have shown high effectiveness and are helping to bring back some cheer and confidence that travel could rebound. Airline stocks such as Indigo (+1.8%) and Spicejet (+6.0%) zoomed ahead. Similarly, shares of hotel companies such as Indian Hotels (+6.5%), Chalet Hotels (8.2%), EIH (6.9%) saw gains. Notably, travel giant Thomas Cook hit the upper circuit (+19.9%) today and has gained nearly 65.7% this month. Globally, too, bullish trends were seen across the travel-related companies.
Tariff-hike hopes trigger buying in Voda-Idea
As per media reports, Vodafone Idea Ltd (now rebranded as Vi) is considering a tariff hike in the range of 15–20% by the end of this year or early next year. The hike seems inevitable given that the company continues to be impacted by losses, customer churn and an overhang of AGR dues. Its average revenue per user (ARPU) of ₹119 at the end of the September quarter is significantly lower than that of Bharti Airtel (₹162) and Jio (₹145). The company plans to raise funds to the tune of ₹25,000 crore to repay debt and expenses. Whether peers will follow suit on the tariff hike and to what extent users’ mobile bills will rise remains to be seen. Meanwhile, shares of Vodafone Idea (+1.1%) and Bharti Airtel (+0.6%) were up today.
Eveready surges as Q2 net profit triples
Shares of Eveready soared 7.6% as the company’s consolidated net profit for Q2 rose 216% to ₹57.2 crore on a year-on-year basis. However, the battery maker’s revenues grew at a modest pace of 7% to ₹372.6 crore. The company attributed revenue growth in batteries and torches to healthy demand and sharp reduction in cheap Chinese imports. Superior product mix in favour of the profitable battery and flashlight segment helped operating margin expansion from 9.1% last year to 20.3% in Q2 this year. The company expects to maintain high margins in the upcoming quarters as imports continue to remain low and demand remains high.
Closing bell
Banks continued to drive up the markets even as oil & gas and IT stocks took a breather today. During this month, the Nifty Bank index (+22.1%) has outperformed the Nifty50 index (+10.6%) by a wide margin. In general, investors' concerns have now moved from ‘when will the vaccine arrive?’ to ‘how the vaccine will be distributed?’ And distribution doesn’t look like a huge challenge. One could expect markets to consider inflation and interest rates more seriously now.
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Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.
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