Rebound

Nifty50: 16,658 ▲ 410 (+2.5%)

Sensex: 58,142 ▲ 1736 (+3.0%)

• The markets opened with a gap up and continued to move higher before trading sideways for the second half of the day
• In all, 47 of the Nifty50 stocks closed in the green indicating broad based buying.
• The Nifty Midcap and Small cap index also witnessed a sharp recovery today. 

All the Nifty sectoral indices closed in the green, with Metal (+5.7%) and Realty (+5.3%) being the top gainers.

For more updates on F&O, click here.

Here are the top stories of the day.

Fuel price rise to dent two-wheeler sales 

High crude oil prices and the looming hike in  fuel prices has put two-wheeler dealers in a spot of bother. Any further hike in prices can dampen the resurgence of demand at the time when the restrictions are easing.

According to reports, two-wheeler inventories are running at a high of 60-90 days compared to the normal period of 25-30 days. Manufacturers would need to slow down dispatches if sales don’t pick up. Sales of entry-level two-wheelers, which reportedly comprise 75% of total retail sales, are likely to see a degrowth of 25% if petrol prices remain above the ₹100 mark.

Aluminium producers to benefit from price surge

Indian aluminium manufacturers like Hindalco and Vedanta are likely to benefit from the recent surge in aluminium prices due to fears of energy supply disruption. India reportedly has the second-largest aluminium production capacity in the world at 4.1 million tonnes per annum (mtpa) followed by Russia at 3.9 mtpa.

Indian aluminium manufacturers are largely dependent on domestic coal and are unlikely to see any major cost escalation in energy costs, which in turn can boost its profitability. India reportedly exports 55% of the domestic primary metal and exports are expected to remain strong as supplies from Russia and Europe get impacted.

BEL signs contract with MoD

The Ministry of Defence signed a contract with Bharat Electronics Limited (BEL) worth ₹1,075 crore for the retro-modification of the commander sight in battle tanks. Commander sight is an optical observation device on the tank, which is fitted with image converter (IC) tube-based sight for night viewing.

BEL is a government-owned aerospace and defence electronics company. It primarily manufactures advanced electronic products for ground and aerospace applications. The stock is down nearly 12% from its 52-week high of ₹228 it touched on 12 November 2021.

IPO Corner

According to the reports, LIC is holding 7-8 roadshows daily for potential investors. This could be a signal that the state-owned life insurance company is going ahead with the IPO despite the market turmoil. The government is reportedly looking to woo around 180 institutional investors for the LIC IPO.  

Good to know

What is dead cat bounce?

A dead cat bounce is a short and often sharp rally in a stock market that occurs after a prolonged decline. In technical analysis, the bounce is considered to be a continuation pattern, where at first the bounce appears to be a reversal of the downtrend but is quickly followed by a continuation of the downtrend. The name ‘dead cat bounce’ is based on the notion that even a dead cat will bounce if it falls far and fast enough.

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