Market recap for 8 April 2021

Nifty50: 14,873 ▲ 54 (+0.3%)
Sensex: 49,746 ▲ 84 (+0.1%)

After a gap-up opening, the markets saw strong buying interest for much of the day. Despite some selling pressure in the last hour, the Nifty50 remained in the green, with 31 of its constituents closing higher.

Among the sectoral indices, buying was strongest in Nifty Metal (+3.9%), followed by Nifty IT (+1.1%). Meanwhile, the Nifty PSU Bank (-0.8%) and the Nifty Bank (-0.6%) were the top losers today.

Buying spree continues in JSW Steel

• Shares of the steelmaker rose for 9 days in a row and gained over 40% in that period. In Q4, its crude steel production grew 6% YoY. Interestingly, the company’s plant capacity utilization increased to 93% in Q4 from the low of 66% in Q1 of FY21.
• Reports suggest that the company has taken a hike in steel prices to the tune of ₹4,000-4,500 per ton for April deliveries. The stock closed 9.5% higher today. 

Cement stocks surge on demand forecast

• Thursday witnessed a rally in cement stocks, with strong gains seen in Ambuja Cements (+5.8%), Shree Cement (+4.7%), Ultratech Cement (+4.1%) and JK Cement (+3.3%).
• The buying interest comes on account of a double-digit growth forecast in the cement sector during Q4FY21. As per reports, growth is a result of the relatively weak Q4FY20, along with demand in semi-urban and rural housing and the government's thrust on infrastructure activities. The latter two factors could also rub off on demand in FY22.    

Fertilizer stocks rally on strong outlook

• Shares of fertilizers makers such as Deepak Fertilizers (+12.1%) and Rashtriya Chemicals & Fertilizers (7.6%) and National Fertilizers (11.7%) surged today on the expectation of higher demand. 
• A bumper Rabi harvest and good monsoon during the Kharif season have boosted demand for fertilizers. With a forecast of normal monsoons, rural demand is expected to remain strong, which augurs well for the fertilizer industry.

Cadila gets USFDA nod for multiple drugs 

• Cadila Healthcare has received USFDA approval to sell its Ibrutinib capsules, a drug used to treat cancers. The company will sell two versions of the drug—70mg and 140mg—which have a combined market of $778 million (approx ₹5,800 crore)  
• Further, the company has also gotten the regulatory nod for its Macitentan tablets, used to treat high blood pressure. The stock gained 2.0% today.

Closing bell

While the markets had full support from metal and IT stocks, banking stocks dampened today’s rally. Going forward, high commodity prices and logistics costs could put input cost pressures across various sectors, particularly manufacturing. This could have a cascading effect on inflation, interest rates and corporate performance. Further, the rate-sensitive banking sector may have to bear the brunt. 

Based on business updates released by various companies, the markets are quickly discounting the growth before the actual Q4 results are announced. This opens up the risk of profit booking on the day of results if the actual results are below expectations. 

Good to know
What is other income?

Other income is the income that a company derives from activities unrelated to its main business. For instance, if a cement producer invests some of its money in mutual funds, the profits generated through this investment will fall under other income. Types of income that are commonly classified as other income are interest income, gains on the sale of assets and gains from foreign exchange transactions. 

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