A stop-start day in the markets

Nifty50: 15,811 ▲+12 (0.0%)
Sensex: 52,551 ▲ +76 (0.1%)

Market witnessed a sharp recovery from an initial fall and closed nearly at its opening level. Market breadth was even, with 25 of Nifty50 stocks ending in the green. 

Among the sectoral indices, PSU Bank (0.5%) and IT (0.3%) were the only indices that closed positively, whereas Realty (-1.5%) and Metal (-0.6%) were the top losers. 

Here are the top stories of the day.

BHEL slumps on Q4 loss

• Shares of the state-owned engineering company dropped as low as 19% intraday after it reported a loss for yet another quarter. For Q4, BHEL’s loss stood at ₹1,036 crore even as revenues grew 42% year-on-year to ₹7,171 crore. 
• The knock in the profit was due to higher expenses. As on March 2021, its order book stood at around ₹1.02 lakh crore, which is 6x its FY21 sales. Its stock pared some of the early losses to close 11.5% lower.   

Two-month IPO drought ends

• After a gap of two months, the Indian stock markets are witnessing IPO action. Automotive ancillary company Sona Comstar launched its ₹5,550 crore IPO on Monday. The company has a global customer base and makes components for combustion as well as electric vehicles.  
• Besides the auto parts manufacturer, Kolkata-based steel products maker Shyam Metalics & Energy also initiated its IPO today. The company focuses on long steel and ferro alloy products and has a track record of strong operating profitability. You can apply for these IPOs on Upstox here.

Parag Milk Foods posts weak quarter

• Shares of Parag Milk Foods fell almost 9% intraday after the company reported a net loss of ₹9.6 crore in the March quarter. It had posted a net profit of ₹10.1 crore for the year-ago period. Meanwhile, total revenue declined 19% to ₹434 crore.
• The company said that the prices of milk increased after the easing of lockdown restrictions in the first wave and peaked in Q4FY21. However, milk prices have started softening in the current quarter and procurement has increased. Meanwhile, the stock closed 5.4% lower today but has risen over 31% this fiscal.

Amara Raja’s diversification bid

• The battery maker has decided to jump onto the accelerating trend of green mobility. The company has said that it will expand its lead-acid batteries business and will set up a strategic business unit for new energy.
• The new business unit will focus on lithium cell and battery packs, EV chargers, energy storage systems and advanced home energy solutions, among other products. Shares of Amara Raja rose almost 2% today.

Closing bell

After initial weakness, the markets steadily clawed back up. The recovery was supported by index heavyweights Reliance Industries and Infosys, which gained over 1% each. Even though at the end of the trading session the indices had recouped the losses, the inflation data posed some concerns. The wholesale price index rose to an all-time level. No doubt the base of May 2020 was low, but the rise in fuel and other commodities prices can’t be ignored. The US Fed is expected to announce its interest rate decision on Wednesday and volatility is expected to be high until then.

Good to know

What is the Wholesale Price Index?

Wholesale Price Index tracks changes in the prices of goods at the wholesale level, such as commodities sold in bulk and traded between businesses rather than bought by consumers. The rise or fall in wholesale prices can trickle down to the retail level if businesses decide to pass on the price hike or reduction to the consumers.  

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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.