Market recap for 23 March 2021

Nifty50: 14,814 ▲ +78 (+0.5%)
Sensex: 50,051 ▲ +280 (+0.5%)

The markets were volatile throughout the day but remained largely in the green. The Nifty50 was almost evenly split, with 28 of its constituents closing higher today.  

Meanwhile, Nifty PSU Bank (+2.9%) and Nifty Bank (+1.7%) emerged the strongest among the sectoral indices, with the Nifty Metal (-0.6%) and Nifty FMCG (-0.3%) being the top losers. 

Here are the top stories of the day.  

SC waives compound interest for borrowers

• The Supreme Court has ordered the waiver of compound interest for all borrowers who availed of the loan moratorium under RBI’s Covid provisions. As per reports, the total cost borne by the government due to the waiver is estimated at ₹13,500–14,000 crore. 
• The interim relief granted to not declare certain borrowers as non-performing assets (NPAs) has also been lifted. The news brought cheer to the banking stocks, which was evident in the 1.7% surge in the Nifty Bank index. 

Liquor stocks rally on revised age limit

• The Delhi government has reduced the legal age for drinking from 25 years to 21 years in the capital. The street expects that this will increase the demand for alcoholic beverages. 
• In response, shares of liquor makers such as United Spirits (+2.0%), United Breweries (+1.7%), Radico Khaitan (+6.8%) and Globus Spirits (+4.3%) were upbeat today. 

Corporate action triggers buying in agrochem stocks

• The shares of Alkyl Amines surged 12% intraday after the company announced a 5:2 stock-split. The stock closed with gains of nearly 10%.
• Meanwhile, agrochemical company Insecticides India announced a buyback, which caused its shares to surge 14% intraday. However, the subsequent selling pressure brought the gains down to 6.2% by the end of the trading session.

Crude oil drops on demand recovery fears

• After hitting a high of nearly $68 on 8 March, crude oil prices have dropped by 12%. New pandemic-related restrictions and slow vaccine rollout in Europe have raised concerns over the demand recovery. 
• Further, analysts believe that global travel restrictions will remain for the time being. Thus, a recovery in oil demand in the second half looks doubtful

Closing bell

The Indian markets inched higher in what seemed like a relief rally, driven mainly by banks. The buying interest comes after the weakness seen last week. Further, correction in crude oil prices and US Treasury yields also soothed investor sentiments. However, one must note that other global cues are not supportive, as most international equity markets closed in the red today. For traders, it is time to be cautious and adjust trading strategies to suit changes in the trend.

Good to know

What is a DVR share?

DVR (differential voting rights) shares are called so because investors holding them have different voting rights (generally lower) than the investors holding regular shares of the company. The reason that a company floats DVR shares is that it wants to avoid a takeover and limit the dilution of voting rights from the management, while satisfying the company’s capital needs.

DVR shares are traded on stock exchanges in the same manner as ordinary equity shares. These shares offer an additional dividend to their holders to compensate for their lower voting rights.

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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.