Bulls charge ahead

Nifty50:  18,477 ▲+138 (+0.7%)
Sensex: 61,765 ▲+459 (0.7%)

After a strong opening, the markets touched a new high today. Of the Nifty50 pack, 28 stocks posted gains. 

Among the Nifty sectoral indices, PSU Bank (+3.9%)  and Metal (+3.8%) were the top gainers. Whereas, Pharma (-0.8%) and Media (-0.7%) were the top losers.

For more updates on F&O, click here.

Here are the top stories of the day.

UltraTech reports flat Q2 profit

In the September quarter, India’s largest cement manufacturer reported a marginal 0.3% year-on-year increase in its net profit to ₹1,314 crore. This was almost in-line with the street estimate of ₹1,377 crore. The company’s net sales rose to ₹11,743 crore, up by 14.4%. 

The profit was impacted by a sharp rise in input costs of raw materials like coal and pet coke, which led to a 17% year-on-year rise in energy cost. Continuous increase in input cost is likely to pose a challenge for the industry, according to the management. However, it also believes that recovery in rural housing and pick-up in infrastructure-led construction activity is likely to drive cement demand. Meanwhile, shares of UltraTech Cement remained flat today.

Housing sales on road to recovery

As per reports, home sales across eight major cities grew 59% on a year-on-year basis in the September quarter and a total of 55,907 new housing units were sold in these markets during the three-month period.

According to reports, the growth was majorly driven by lower interest rates, increased affordability of housing and gaining the concept of home ownership amidst the pandemic. Of the total units launched in Q3, 33% were from the ₹45-75 lakh price bracket. Of the total launches, Mumbai (33%) and Ahmedabad (21%) saw the highest quarterly launches. Meanwhile, shares of Mumbai based realtors showed mixed performance today with Oberoi Realty (+0.9%) and Godrej Properties (-0.1%).

Paras Defence’s shares soar

The defence and space technology company’s shares were locked in a 20% upper circuit today. This comes after the company announced that it will engage in maintenance, servicing and repair of defence equipment and naval vessels.   

This will be done through association with Krasny Defence Technologies, which is a prominent player in the defence equipment maintenance space. Shares of Paras Defence had made a bumper debut on the exchanges on October 1 and have surged by 328% in comparison to their issue price of ₹175.   

Closing bell

For the third day in a row, Nifty50 has gapped up and closed higher. Typically, as the markets get stretched in one direction, the probability of a counter move gradually increases. Such counter activity could be either in the form of correction or sideways movement. Meanwhile, Indian markets brushed off cues from international indices, most of which are trading in red today. The India VIX rose by 9% today and suggested that higher volatility could be in the offing. Traders should not take the unidirectional rally in the markets for granted.

Good to know

What is the Nifty50 Equal Weight Index?

This index represents an alternative weightage strategy to the Nifty50 index. While it includes the same companies as the Nifty50 index, the difference is in the weightage assigned to each stock. The equal weighted index will give 2% weightage to each company unlike the current market cap-based weightage given in the Nifty50 index. As DSP AMC launches it’s Nifty50 Equal Weight ETF, click here to understand all the crucial aspects of the scheme.

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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.