Airline stocks take flight

Nifty50: 17,585 ▼-44 (-0.2%)
Sensex: 59,015 ▼-125 (-0.2%)

Despite a strong opening, markets gave up their gains and ended lower. Out of the Nifty50 pack, 34 stocks declined. 

Among the Nifty sectoral indices, Media (0.9%) and Financial Services (0.6%) gained the most. Whereas, Nifty PSU Bank (-2.9%) and Metal (-2.3%) were the top losers.

Here are the top stories of the day.

Aviation stocks fly as air traffic improves

The domestic air passenger traffic saw a 34% month-on-month growth to 67 lakh passengers in August as more people took to the skies amid easing restrictions and declining cases. However, the total number of passengers was still below March ‘21 levels of 78 lakh fliers, before the second wave hit the country. 

Shares of market leader Indigo (+10.3%) and budget carrier Spicejet (+3.6%) rose sharply coupled with high volumes indicating strong buying interest. 

Hero Motocorp to take a price hike 

India’s largest two wheeler maker, Hero Motocorp has announced price hikes across its range of motorcycles and scooters. The price hike is being undertaken to offset the impact of rising commodity prices. 

The price hike will be upto ₹3,000 across the range and will be effective from September 20. Meanwhile, the company is optimistic about demand on the back of the upcoming festive season. 

AC makers shares rebound 

The shares of air conditioner makers rebounded from their intraday lows on the expectation of revival in sales during the upcoming festive season. These companies had a washout summer (April-June) due to the second wave. 

However, experts believe that the AC manufacturers have higher raw material inventory and are in a position to push sales for the upcoming festive season. At the same time, AC makers are also benefiting from a ban on the import of components and AC units from China. So far this month, shares of Voltas (+26%), Havells (+16%) and BlueStar (+10%) have delivered strong gains. 

Closing bell

Markets took a breather today after rising for three consecutive days. However, on a weekly basis, markets rose for the fourth week in a row. Indian markets have been upbeat despite volatility seen in most international indices. Lack of any major negative triggers are helping markets stay buoyant. Meanwhile, progressive measures such as relief to the telecom sector, production-linked incentive scheme, etc. are helping to keep investor confidence high. Next week, the US Fed is expected to announce its interest rate decision. Experts believe that the Fed could start cutting stimulus in 2021, but will continue to keep interest rates unchanged. 

Good to know

What is RoE?

The return on equity (RoE) indicates how much money a company makes on the investments made by its shareholders. It is calculated by dividing the net income or net profit by shareholders equity. Investors must look at this ratio to understand how efficiently a company uses its shareholders’ money. However, it is important to note here that what is deemed as a good RoE would depend on the sector in which a company operates. 

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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.