Here's a quick wrap-up of the highlights this week.
This week in stocks
Markets close higher for the week, again
This week, the Nifty50 rose 1.5% and posted gains for the third consecutive week. Given the strength on display, it seemed as if the Indian markets lost sync with the international indices, which were rather subdued by inflation concerns.
The week was filled with domestic data releases and events, including GDP, PMI and most recently the RBI’s interest rate decision. The markets were perhaps unsurprised by the central bank’s decision to keep the interest rates unchanged and maintain its accommodative stance. However, the RBI has lowered the growth outlook for FY22 from 10.5% to 9.5%.
Sectoral trends
Realty sector leads the way
All the sectoral indices closed the week higher, except for the IT sector, which witnessed some profit booking after strong gains last week. Among the sectoral indices, Nifty Realty rose 6.7% mainly supported by strong buying interest in stocks such as Oberoi Realty and Phoenix Mills. While lower home loan interest rates are clearly a positive, the recently approved the Model Tenancy Act provided a boost to the sector.
The Act clearly lists the obligations of tenants and landlords. For instance, the kinds of repairs each party is responsible for, the amount of security deposit, etc. Clarity on such aspects is expected to bridge the trust gap between the two parties. Real estate experts believe that this can attract more investors in properties and help build the rental housing supply pipeline. It may also be helpful for working professionals, students and migrant populations looking for rental accommodations.
Key earnings
Motherson Sumi’s profits grow three-fold
The auto-ancillary major’s total revenues rose 19% YoY as the company’s domestic wiring harness and its plastic modules division witnessed strong growth. However, profits for Q4 grews at a faster clip—up 290% YoY—to ₹714 crore backed by higher revenue and lower tax expenses. The growth is largely attributed to a pick-up in industrial activity, globally. Its orderbook of €15.6 billion (approx ₹1.4 lakh crore) has a large contribution from electric vehicles (EVs). This highlights the fact that its product profile is geared to adapt to the rising demand for EVs in the future.
Given that the pandemic related stress is fading in the US and major European countries, companies with greater exports could see improved demand from those regions. Recently, another auto-ancillary major Bharat Forge reported a surge in exports. Motherson Sumi’s stock hit a new lifetime high and closed 7% higher this week.
Key data release
RBI’s liquidity boost for pandemic-hit sectors
One of the key features of the RBI’s June Monetary Policy was liquidity relief for pandemic-affected sectors. The central bank provided a special credit line worth ₹15,000 crore for pandemic-hits sectors like, hospitality, restaurants and tourism. Additionally, it reserved ₹16,000 crore for small businesses. It will also infuse money into the economy by buying government bonds worth ₹1.2 lakh crore in the September quarter. To know more about the monetary policy, watch our video here 👇
Major earnings next week
- Monday: MRF, Mrs Bectors Food Specialities
- Tuesday: Petronet LNG, Engineers India
- Wednesday: Bata India
- Thursday: NHPC, Mazagon Dock
- Friday: CG Power, BEML
Key data releases next week
- Wednesday: Crude oil inventories (US)
- Thursday: CPI, Initial jobless claims (US)
- Friday: IIP (India)
Would you pay to tweet?
In the world of marketing, there’s an adage that goes “if you don’t pay for the product, you are the product.” To test an alternative revenue model, Twitter has launched its subscription service ‘Twitter Blue’ in Canada and Australia for around $3 (about ₹220) per month. The perks? For starters, you have a 30-second window to edit your tweet after you’ve sent it. There’s also a ‘super follow’ button for individual users who charge subscriptions. Plus, there’s a dedicated reading mode to scan lengthy threads and a feature that limits the speed of misinformation spreading. And in case you’re wondering… no, your tweets can’t exceed 280 characters. While the service is yet to be launched in India, would you pay to tweet?
We'd love your thoughts on this market recap.
Haven't tried out Upstox yet? Click here to open your account now!
To catch our latest educational videos, join our Telegram channel here.
Disclosures and Disclaimer
Investment in securities markets is 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.
Download the Upstox App Today