Investors check into hotel stocks

Nifty50: 17,895 ▲+104 (+0.5%)
Sensex: 60,059 ▲+381 (+0.6%)

After a gap up opening, the markets continued to trade in green. However, of the Nifty50 pack, only 23 stocks advanced. 

Among the Nifty sectoral indices, IT (+1.9%) and PSU Bank (+1.6%) were the top gainers. Whereas, Realty (-2.2%) and FMCG (-0.5%) were the top losers.

For more updates on F&O, click here.

Here are the top stories of the day.

Tata Motor’s big EV play

According to the reports, the automaker is looking to raise $1 billion for its electric vehicle (EV) unit through a stock sale. The reports add that the company’s EV unit is valued at $8 billion and has attracted interest from global private equity funds. 

In FY21, the company’s EV unit accounted for only 2% of the total sales. But, the company is planning to ramp its presence in the EV segment with 10 electric car model launches by 2025. Meanwhile, shares of Tata Motors were up 1.6% today and nearly 15% in this week.      

Hotel stocks surge on occupancy recovery

On the back of rapid and consistent recovery in occupancy levels, hotels stocks are witnessing increasing interest from investors. Amid the second wave in May, according to experts, the occupancy levels had dropped to 20%. But in the July-August period, occupancy levels have improved to over 60%.

Further, analysts believe that a recovery in business travel and allowing foreign tourists to travel in India would provide impetus to occupancies in the upcoming quarters. Shares of listed hotel players, including Indian Hotels Company (+3.5%), Lemon Tree Hotels (+6.7%) and EIH (+3.0%) witnessed strong buying interest.

Wockhardt jumps on stake sale buzz

Mumbai based pharmaceutical company Wockhardt's shares zoomed 11% intraday over the reports of a stake sale to Serum Institute of India which is the world’s largest vaccine manufacturer.

As per reports, the Covishield manufacturer may acquire 10% stake in Wockhardt at a ₹7,000 crore valuation, nearly 25% higher than its current market capitalization. This comes after it sold its selected divisions of it’s generic business in India to Dr Reddy’s Laboratories, last year. Meanwhile, shares of Wockhardt pharma closed with 5% gains.

Closing bell

The RBI kept the interest rates unchanged. It also maintained its accommodative stance and said that it will continue to do so as long as it was necessary to revive growth. The concerns over inflation are also fading as the street expects September retail inflation to drop to 4.5% from 5.3% recorded for August. These two things i.e. the inflation under control and lower interest rate regime built positive sentiments and helped the markets to end the week on an optimistic note.

Good to know

What is RSI divergence?

RSI divergence indicates to technical analysts that the price action and the Relative Strength Index Indicator (RSI) are no longer showing the same momentum. It can give a leading signal of change in the trend. A positive divergence takes place when the price makes a lower low but RSI makes a higher low, indicating that price fall has lost the momentum. Similarly, a negative divergence is seen when price makes a higher high, but RSI makes a lower high suggesting that the bulls have lost power. Click here to deep dive into an intraday RSI Positive Divergence Strategy. 

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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.