Second wave may not hurt for long

Nifty50: 15,722 ▲+42 (0.2%)
Sensex: 52,484 ▲+166 (0.3%)

After a weak start, the markets inched back into positive territory in the second half of the day. Strong buying in the last hour helped the benchmark Nifty50 register the first gain of the week.

The market breadth was also healthy, with 28 of the Nifty50 stocks closing in the green. Among the Nifty sectoral indices, Pharma (+0.6%) and Media (+0.5%) were the strongest, while Metal (-1.4%) fell the most.

Here are the top stories of the day.

Housing launches drop, but sales rise

• New home launches in the top seven cities dropped 24% between January-May 2021 from a year earlier, as per the analytics firm PropEquity. The drop is attributed to developers focusing on clearing unsold inventory and due to a halt in construction activity amid the second wave. 
• Meanwhile, home sales rose 23%, and as restrictions ease, new sales are expected to gather further momentum. The Nifty Realty index has gained nearly 10% in 2021. 

Second wave impact to be limited to Q1

• The economic damage inflicted by the second wave in India will remain limited to the June quarter, according to Moody’s Investor Service. With consumers and businesses adapting to the new normal and targeted lockdowns in place, it expected the impact of the second-wave to be much softer than the first one. 
• The global credit rating agency estimates that India’s GDP will grow at 7% in the current financial year. It also expects mobility and economic activities to accelerate in the second half of FY22 as the vaccination drive picks pace. 

NCC bags five new orders in June

• Hyderabad-based construction company has announced that it has received five new orders totaling ₹2,149 crore in June ‘21. The company clarified that all these orders are received from government agencies and do not include any internal orders.  
• The execution period of these orders ranges from 24 to 40 months from the date of award. Meanwhile, shares of NCC 3.4% were upbeat today with high volumes indicating investor interest. Its shares have gained over 56% this fiscal. 

NMDC iron ore sales rises in June

• The state-owned mining company’s iron ore sales jumped 28% in June 2021 as compared to June 2020, aided by an 18% rise in production during the same period.
• NMDC is the country’s largest iron ore producer, with an production of 35 million tonnes. For Q4FY20, the company’s consolidated net profit surged 717% YoY to ₹2,835 crore, supported by a 115% jump in revenue from operations to ₹6,847 crore. Shares of NMDC were down 0.8% today.

Closing bell

Indian markets are see-sawing between weekly gains and losses over the last four weeks. This week, Nifty50 was down nearly 0.9%, dragged by Metals and Banks. A stock or index typically moves in one of the three trends—up, down or sideways. Currently, the benchmark Nifty50 is moving sideways in the range of 15,450 and 15,900. A breakout on either side will give clarity on the market direction in the days ahead. Next week, TCS is expected to declare its results on 8 July and kickstart the Q1 earnings season. There are two things that investors will look out for in the results—how various companies handled the second wave and the management commentary on outlook for the rest of FY22. 

Good to know

What is market breadth?
Market breadth refers to the number of stocks that are rising in comparison to those that are falling on an exchange or index such as Nifty50. It reflects the overall health of an index and its sentiments. For instance, if the majority of the stocks are advancing, it means that the sentiment is strong and indicates broader participation. On the other hand, if most stocks are declining, it means that bearish momentum is gaining ground.

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