Market recap for 18 January 2021

Nifty50: 14,281 ▼ 152 (-1.0%)

  Sensex: 48,564 ▼ 470 (-0.9%)

The markets started on a weak note and continued to slide downward for the rest of the day. Market breadth was negative with 44 of the Nifty50 stocks closing in the red. 

All sectoral indices ended negative with the most pain seen in Nifty Metal (-4.0%) and Nifty Pharma (-2.7%). 

Here are the top stories of the day.

L&T Finance Holdings recedes on weak Q3

• Shares of L&T Finance Holdings fell 6% today as it reported a 51% decline in consolidated net profit for Q3 owing to higher expenses. Its net profit plunged to ₹287 crore from ₹591 crore in Q3 last year. 
• Meanwhile, the company achieved a 51% QoQ growth in disbursements, the highest quarterly disbursement since Q1FY20, driven by rural and infra sector lending.

Trident reports bumper Q3 profits 

• The textile maker reported a consolidated net profit of ₹112 crore for the third quarter, a 200% surge from ₹37 crore in the same period last year. The company reported a consolidated revenue of ₹1,303 crore, a 20% YoY increase. 
• Recently, the company secured a patent in Europe for a method of manufacturing fabric, which is used in making soft towels. The shares of the company have gained about 39% in January and were up 1.3% today.

L&T wins big-ticket rail project

• The construction arm of L&T has bagged a large project from the Rail Vikas Nigam in Uttarakhand. 
• The project, which is for constructing a broad-gauge line between Rishikesh and Karanprayag, is estimated to be valued between ₹2,500 and 5,000 crore. The company aims to complete the project in 60 months. 
• Amid a weak market, L&T’s shares were down 1.9% today.

DHFL soars on Piramal takeover

• Shares of the troubled NBFC were locked in its 5% upper circuit after its creditors approved the ₹37,250 crore resolution plan submitted by Piramal Capital and Housing Finance.
• Besides the Piramal Group, the Adani Group and US-based Oaktree Capital Management were also bidders for the company. In Q3, shares of DHFL have risen by 130% in anticipation of a potential deal.

Closing bell

The markets witnessed across-the-board selling today. Further, the cues from major global equity markets were also negative. Major Indian IT companies have already declared their results, and most of their stocks have succumbed to profit booking after the results. If the stocks of other sectors face a similar fate post results, the markets could weaken further.

The Budget is exactly two weeks away, and before that, the markets have to cross the derivatives expiry hurdle. The India VIX is inching up, indicating heightened volatility in the days ahead.

Good to know

What is a circuit breaker?

A circuit breaker is a limit placed on price movements set by exchanges to temporarily stop the trading when the shares or indices have fallen or risen by a certain percentage in a day. They are intended to prevent any free fall or an uncontrolled rise.

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