Market recap for 12 April 2021

Nifty50: 14,310 ▼ -524 (-3.5%)
Sensex: 47,883 ▼ -1,707 (-3.4%)

After a gap-down opening, the markets kept sliding down throughout the day. The selling pressure was broad-based, with 46 of the Nifty50 constituents closing in the red.

All sectoral indices ended weak, with the Nifty PSU Bank (-9.2%) and Nifty Media (-8.1%) being the top losers.

Sputnik V vaccine to get nod soon

• Amid the rising number of Covid cases and shortage of existing vaccines, the Russian Sputnik V vaccine is likely to get the emergency use authorisation (EUA) soon.
• The Russian Direct Investment Fund has partnered with several Indian pharma companies to manufacture the vaccine in India. These include Dr Reddy’s (+7.0%), Gland Pharma (+3.5%) and Panacea Biotec (+19.9%). Shares of all these companies were upbeat today despite a weak market.

Man Industries wins big-ticket project

• The Mumbai-based pipe manufacturer has received an order worth ₹766 crore from the domestic hydrocarbon sector. 
• With the new order, the company states that it has a total unexecuted order book stood at ₹1,900 crore, which is to be executed in FY22. This figure is higher than FY20 and 9MFY21 revenues. The stock was down 2.7% today and remained flat so far this year. 

Kalpataru Power arm bags large orders

• JMC Projects, a subsidiary of Kalpataru Power Transmission, has won orders totalling up to  ₹1,262 crore. The order comprises building projects in India worth ₹1,059 crores and water projects in the Maldives worth ₹203 crore.
• In FY21, the construction company won orders worth ₹7,900 crore. Today, its parent company’s stock fell 4.3%. However, it has risen about 18% in 2021 so far. On the other hand, JMC shares were down 7.7%, but are up about 13% this year.  

Coforge to acquire stake in SLK Global

• The IT services company has acquired a 60% stake in SLK Global for ₹918 crore. The latter offers digital solutions in the banking and insurance sectors. 
• SLK’s founder exited the company with the acquisition. However, key management personnel will remain in the company after the acquisition. Coforge’s stock was down 1.5% today but has risen about 15% since the beginning of 2021. 

Closing bell

At a time when the market was already battling the steady rise in inflation (data for March expected today), fresh concerns relating to the looming lockdown in Maharashtra spooked the indices. The bigger question is whether other states will follow suit, given the second wave is spreading more rapidly. Further, the fact that international markets are trading in the red added fuel to the fire today. The India VIX was up 16%, which indicates that volatility could rise going forward. 

Good to know

What is hedging?

Hedging is a strategy to reduce or offset risk in an investment. This is generally done by taking an opposite position in a related asset. For instance, if you are holding a particular stock in the cash market, the most common way to hedge it is by shorting futures or buying put options. It's worth noting that while hedging reduces the risk in your investments, it also reduces its ability to generate profits.

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