Market recap for 13 January 2021

Nifty50: 14,564 ▲ 1.4 (0.0%)

     Sensex: 49,492 ▼ 24.7 (-0.0%)

After a gap-up opening, markets saw selling pressure and declined rapidly. However, they did see some buying interest at lower levels during the second half of the day and closed nearly flat. 

Among the sectoral indices, Nifty PSU Bank (+3.2%) and Nifty Auto (+0.8%) were the top gainers, whereas Nifty Pharma (-0.9%) and Nifty Realty (-0.3%) were the top losers.

Here are the top stories of the day.

IT majors post strong Q3 results

• Infosys and Wipro announced their Q3 results today. In terms of constant currency revenue growth, Infosys reported a 5.3% QoQ rise and Wipro grew 3.4%. Earlier this week, TCS reported a growth of 4.1%.
• Infosys posted net profit of ₹5,197 crore, better than street estimates of ₹5,060 crore. It has raised its full-year revenue guidance to 4.5–5% (from 2–3% earlier) and for operating margin guidance to 23–24% (from 21–23% earlier). Its shares gained nearly 10% this month, ahead of the results. 
• Wipro’s net profit stood at ₹2,968 crore, higher than the estimated ₹2,551 crore. Ahead of the results, its shares have gained nearly 19% this month.

USFDA approves Granules India’s diabetes drug 

• Granules India announced that it received USFDA approval for its diabetes management drug. The market for this drug is about $192 million in the US.
• In 2020, shares of Granules India saw high investor interest and rose over 180%. The company is expected to announce its Q3 results on 28 January. Its shares gained 1.7% today.

SBI gains as PSU banks surge

• SBI (+4.6%) was among the top gainers in the Nifty50 today and has seen high investor interest over the last two days. 
• The street is factoring in the earnings recovery, market shares gains led by the bank’s retail/digital focus and better growth outlook. Shares of other public sector banks such as Bank of Baroda (+6.5%) and Canara Bank (+3.7%) also gained today.

Airtel zooms on 100% FDI approval

• Bharti Airtel surged 6% intraday after the Department of Telecommunications approved 100% FDI investments in its downstream companies. The stock closed with a modest gain of 1.8%.
• For Q3, the street is expecting Airtel to lead subscriber addition given that it is in a sweet spot compared to Vodafone Idea, which is witnessing a churn, and JIo, which is facing challenges due to farmer protests.

Closing bell

At one point today, it seemed as if the markets were firmly in the grip of bearish claws. However, the bulls bucked up and helped the markets to rise. The IndiaVIX index, which indicates expected volatility over the coming days, has been quietly inching up and has risen nearly 13% so far this week. As mentioned earlier, this month could witness volatility as expectations over Q3 results, the Union Budget and the RBI policy could sway the markets. 

Good to know

What is FDI?
A foreign direct investment (FDI) is an investment wherein a foreign entity takes controlling ownership in a local business.  With FDI, the foreign entity brings to table its knowledge, management skills and technology along with capital.

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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.