Market recap for 19 March 2021

Nifty50: 14,744 ▲ 186 (+1.2%)

Sensex: 49,858 ▲ 641 (+1.3%)

The markets opened weak today. However, strong buying interest in the second half helped the benchmark indices break their five-day-long losing streak; 42 of the Nifty50 stocks closed in the green.

The Nifty Realty (-0.5%) was the only sectoral index to decline, while the Nifty FMCG (+2.4%) and Nifty Metal (+2.0%) were the top gainers among the indices.  

Here are the top stories of the day.  

Multiplex shares tumble on Covid surge

• Due to a spike in infections, Maharashtra has imposed stricter norms, such as a mandatory Covid-negative report for entry into public spaces such as malls and hotels.
• Given the restrictions, multiplex stocks PVR (-2.3%) and Inox Leisure (-2.8%) along with shares of malls like Phoenix Mills (-3.0%) and Shoppers Stop (-1.3%) witnessed heavy selling pressure. 

Pricey yarn hurts garment makers

• Supply shortage has caused a near-50% surge in the price of yarn, which is used in making garments. As per reports, production cuts during the pandemic coupled with pent-up demand could likely be factors causing the price hike. 
• Listed garment stocks showed mixed reactions today. Dollar Industries (+0.8%) and Rupa (+3.9%), which have reportedly passed on the increased costs to the buyers, were positive. However, Alok Industries declined 0.7% and Page Industries closed flat. 

IT companies rise on Accenture’s guidance 

• Shares of Indian IT majors were upbeat today after consulting major Accenture revised its FY21 revenue guidance from 4-6% to 6.5-8.5%. 
• This is Accenture’s second guidance revision in FY21. Accenture reported an 8% YoY growth in its second quarter (it follows September to August fiscal). Indian IT companies gained HCL Tech (+1.5%), Infosys (+0.7%) and TCS (+0.6%). 

Indo Count surges on capex plan

• The textile maker has announced plans to expand and modernise existing capacities with a capex of ₹200 crore to meet increasing demand and to grow business volume. The capex will be funded by a mix of internal accruals and debt and is expected to be operational in the second half (October-March) of FY22.
• The company expects these investments to increase its revenue by ₹600 crore over the next two years. Although the stock closed 7.5% higher today, it has declined 14.5% so far in 2021. 

Closing bell

Today, the Indian markets did a U-turn of sorts. While the scenario was gloomy in the morning, the markets looked upbeat at the time of closing. Reliance Industries and FMCG majors did the heavy lifting and pulled up the indices. It is worth noting that today's movement happened without any support from global cues, which continue to remain negative. Further, there are no major domestic events next week. Thus, today’s strong rise must be taken with a pinch of salt, especially because it is a bounce back after five consecutive days of fall.

Good to know

What is price correction?

Typically, a downward movement in the price of an individual stock or any other asset is referred to as a correction. If prices have been rising in the market as a whole, and then fall dramatically, this is known as a correction within an upward trend. Price correction can be due to macroeconomic issues like the current COVID-19 pandemic, sectoral challenges, or even business or management issues.

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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.