Market Recap for 11th September

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▲ Nifty: 11,464 (+0.13%)      ▲ Sensex: 38,854 (+0.04%) 

Today, the Indian markets showed signs of indecision after sharp gains seen yesterday. The global markets provided mixed cues as the US markets ended in the red, while key Asian indices were in the green. The Indian IT sector clearly outshined other sectors, with the Nifty IT index gaining 1.29% in the day. During the week, the Nifty50 rose 1.1% after dropping 2.6% in the previous week. 

Here are the top stories of the day.

Yes Bank soars on hints of revival

Investors seem upbeat about Yes Bank and it showed in its stock price, which was locked in the 5% upper circuit today. There are several factors that seem to augur well for the bank. For one, the bank has fully returned the ₹50,000 crore special liquidity facility (SLF) received from the RBI, ahead of schedule. Second, Crisil recently upgraded its rating on the bank’s certificate of deposits. Further, the bank also successfully raised equity funding of ₹15,000 crore through a follow-on public offering (FPO) in July this year. The bank's restructuring plan looks well on track under the new board and management. 

Hindustan Copper shares jump with 40% rise in Q1 profit

State-run Hindustan Copper's Q1 revenue from operations grew to ₹431.4 crore (up 41.8% year-on-year) and the profit after tax stood at ₹29.6 crore (up 40.1% YoY). The share price jumped 5.8% on the back of a strong performance in the quarter when operations were adversely affected due to the lockdown. However, the previous year’s closing stock helped clock in the sales growth. The company is a vertically integrated copper producer, engaged in mining and processing copper ore to produce refined copper. Over the past few months, Copper prices have risen by nearly 50% owing to a revival in demand from China, disruption in the global supply chain due to the pandemic, and the ongoing stimulus packages by various governments to counter economic fallout. 

IT stocks rise amidst domestic uncertainty

The broader markets have been indecisive, with the Nifty trading nearly flat since the start of September. Amidst this indecision, the Nifty IT index has gained over 4% since the start of this month. It seems that investors are taking refuge in the IT sector stocks amidst domestic challenges, viz. the Indo-China tensions, weak domestic demand (reflected in Q1 GDP contraction), and uncertainty over interest waivers weighing on the banking sector. Among the large-cap IT firms, Wipro has gained nearly 8.2% and TCS is up 5.6% since the start of September. Only time will tell whether the uptick in the shares is based on expectations of better Q2 results or on technical indicators

Closing bell

The government has set up an expert committee to assess the impact of the interest waiver on the Covid-19-related moratorium. Sentiments toward banking shares could sway until the panel report is out (expected in a week), because any complete waiver of interest could hit the banks hard.