Market recap for 22 February 2021

Nifty50: 14,675 ▼306 (-2.0%)

Sensex: 49,744 ▼ 1145 (-2.2%)

The markets opened on a weak footing and continued their downward trajectory throughout the day. Of the Nifty50 stocks, 41 closed in the red.

Among the sectoral indices, only the Nifty Metal index (+1.6%) managed to close in the green, while the Nifty Meda (-3.4%) and Nifty IT (2.8%) ceded the most. 

Here are the top stories of the day. 

Multiplexes tumble on lockdown fears

• With the rollout of the vaccine, it seemed that multiplexes could be in for some better times ahead. However, the news of a spike in Covid cases and impending risks of lockdown dim hopes for the multiplexes in the near term. 
• Further, consumer behaviour towards out-of-home content consumption remains to be seen as OTT usage continues to grow. Meanwhile, shares of PVR (-6.7%) and Inox (5.9%) fell along with the general decline in the market. 

Copper surges on optimistic outlook

• The expectations that as countries come out of the Covid crisis, the demand for metals will far outstrip their supply. Copper has been rising for 11 months now and gained over 18% this month, so far. 
• Today, MCX Copper prices were up more than 1.3%. Today, in another weak market, metal stocks shined. Shares of Hindustan Copper (+14.3%), Vedanta (+5.9%) and Hindalco (+2.0%) saw high investor interest.

L&T wins ‘large’ power transmission deal

• The power transmission and distribution (PT&D) business of the construction major has bagged large domestic and international contracts. As per company specifications, large contracts refer to deals worth ₹2,500-5,000 crore. 
• It secured two engineering, procurement and construction contracts to set up over 400 MW solar photovoltaic projects in Gujarat. Other domestic projects include those at Rajasthan, West Bengal and Tamil Nadu. It has also bagged an order from Qatar to install equipment that helps improve electricity grid stability.

Trent catches momentum after Q3 results 

• The easing of Covid-related restrictions along with improving consumer sentiments helped Trent work its way back to recovery in Q3. After consolidating for the last two months, the stock seems to have garnered buying interest. 
• The stock beat the weakness in the market, and closed 1.7% higher. The stock has jumped 26% in February. Its movement this week has taken the stock near its lifetime high of ₹804.7. 

Thomas Cook gains on fund-raising plans 

• The travel company aims to raise ₹450 crore through preference shares from its promoter, Fairbridge Capital. The announcement comes after Thomas Cook recently withdrew its buyback offer. 
• The fundraise also follows the company’s Q3 results where it recorded a consolidated net loss of ₹66 crore, largely owing to Covid restrictions. After the announcement, the stock jumped over 5% intraday, but lost all gains and closed about 1% down.

Closing bell

Generally, the fear of a particular negative event happening is more devastating than the event itself. The risks due to a looming lockdown are probably being factored in by the market, as new Covid-cases spike. The markets are already down five days in a row.

The India Vix jumped nearly 15% today, indicating that traders expect volatility to increase in the coming days. Amidst this, the midcap and smallcap stocks seem to be holding their ground, as their indices fell about 1.3% each compared to a fall of over 2.0% in Nifty50, today.

Good to know

What is asset under management?
Assets under management (AUM) is the total market value of the investments that a person or entity (say a mutual fund or a venture capital firm) manages on behalf of its clients.

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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.