Market recap for 16 December 2020

Nifty50 13,682 ▲ 114 (+0.8%)

Sensex 46,666 ▲ 403 (+0.8%)

The Indian markets had a gap-up opening and gained further toward the close of the day. In all, 36 of the Nifty50 stocks advanced from yesterday. 

All sectoral indices were in the green except for the Nifty PSU Bank index (-1.6%) which suffered due to a 6% fall in PNB. 

Here are the top stories for the day.

Realty rises

• The Nifty Realty index rose 5.1% today and is the top sectoral performer this month, rising about 17% so far in December. Thanks to low home-loan rates, stamp-duty cuts and lucrative incentives offered by well-funded builders, certain cities have seen demand recovery in the residential real estate market. 
• In Maharashtra, October sales were 1.3 times higher than in January. Further, the demand momentum has continued even after the festive season. 
• Shares of real estate players such as Indiabulls Real Estate (+11.7%), DLF (+9.7%), Godrej Properties (+3.9%), Sobha (+4.7%) and Oberoi Realty (+4.6%) gained today.

Whopper Christmas gift

• Investors in the shares of Burger King IPO must be a happy lot. The stock has now tripled its issue price of ₹60, and that too within three days of listing. 
• While the 156x oversubscription indicated immense demand for the stock, low retail holding of about 4% is being cited as one of the reasons for high demand. Other QSRs, chiefly Westlife (+12.8%) and Jubilant Foodworks (+3.4%), too saw investor interest.

Sugar stocks turn sweeter

• The government has approved an export subsidy of ₹3,500 crore to help sugar mills clear outstanding dues to sugarcane farmers. The move is expected to benefit 5 crore farmers.  
• Shares of sugar companies—Uttam Sugar (+7.6%), Simbhaoli Sugar (+4.6%), Dalmia Bharat (-1.9%), Shree Renuka (+2.6%), Bajaj Hindusthan (+2.2%)—were all up today. Higher exports, supported by the subsidy, would further help manage the inventory situation as India is expected to have a bumper sugar output this year.

Trade deficit narrows

• India’s exports in November dipped by around 9% due to lower shipments of engineering, chemicals and gems & jewellery. On the other hand, imports saw a sharper decline of 13% due to lower oil imports.  
• In this fiscal, the trade deficit stood at $42 billion compared to $113 billion last year. This typically means lower forex outflow.

Closing bell

The rally that we are seeing in equities is not limited to India. Most equity markets globally are showing bullish trends. In India, the rally is broad-based with the Nifty50 (+5.5%), Nifty Midcap 100 (+6.0%) and Nifty Smallcap 100 (+5.9%) all showing similar gains so far in December. With each day of rise, traders may be wondering how long the rally would last? The answer is—at least from a short-term perspective—till the liquidity continues to flow in.

Good to know

What is a trade deficit?

Trade Deficit is the difference between the value of a nation's imports and exports. If the imports exceed exports, it results in a deficit, and if exports exceed imports, it results in a surplus.

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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.