Market recap for 12 January 2021

Nifty50: 14,563 ▲ 78 (+0.5%)

  Sensex: 49,517 ▲ 247 (+0.5%)

After a shaky start, the markets resumed their upward march and remained firm till the closing bell rang.

Among the sectoral indices, Nifty PSU Bank (+5.9%) and Nifty Realty (+2.7%) were the top gainers, whereas Nifty Pharma (-1.2%) and Nifty FMCG (-0.5%) were the top losers.

Here are the top stories of the day.

Sunteck gains as new bookings rise

• Mumbai-based Sunteck Realty saw a sharp recovery in new bookings to ₹349 crore, up 75% QoQ and 7% YoY. The company believes that the reduction in stamp duty and low interest rates are expediting home-purchase decisions. 
• As construction activity returns to pre-COVID levels, the company is accelerating its work on projects to make up for lost time. The stock gained 1.7% today.

PSU banks see high investor interest

• As per RBI’s Financial Stability Report, PSU banks are seeing a steady uptick in credit growth. Loans grew 4.6% YoY in September 2020, as compared to 3% in March 2020.
• Further, the rebound in the overall economic scenario not only augurs well for new loans but also increases the likelihood of an improvement in asset quality. Shares of PSU banks such as SBI (+3.7%), PNB (+4.3%), Bank of Baroda (+10.6%), Canara Bank (+6.8%) and Union Bank (+5.7%) saw strong investor interest today.

Fundraising plans boost Indiamart 

• Indiamart, the online B2B marketplace, aims to raise around ₹1,000 crore possibly via the qualified institutional placement (QIP) route. The exact quantum of funds raised will be revealed on 18 January, during the company’s board meeting. 
• It is expected that the funds raised will be used for potential acquisitions. The stock rose 2.7% today. The stock has been steadily rising of late, gaining nearly 26% in December and 28% in January, so far.

Tata Chemicals to buy Archean’s salt unit  

• According to reports, Tata Chemicals is in talks to acquire Archean Group’s industrial salt division valued at ₹450 crore. The Chennai-based group is a manufacturer of industrial salt, industrial chemicals and fertilisers.
• Media reports suggest that the deal could materialise this month. Shares of Tata Chemicals rose 4.9% today. It has seen a strong run-up in Q3, gaining nearly 60%.

Closing bell
The markets have been rising for 10 weeks straight. Such an extended rise without any corrections is rarely seen and indicates the strength of the bulls. That said, it will be interesting to see the impact of the CPI inflation numbers, which will be announced today. The street expects the number to drop to 5.3% from 6.9% seen in November. Falling vegetable prices (due to a better crop) are expected to curb overall inflation.

Interestingly, at 5.3% the CPI will be comfortably below RBI’s upper tolerance level of 6%. Meanwhile, market expectations for the IIP reading (which will also be announced today) are not that encouraging. It is expected to drop to 1.1% versus 3.6% in November.

Good to know

What is a QIP?
Qualified institutional placement (QIP) is a tool to raise capital wherein a listed company can issue equity shares to institutional buyers such as mutual funds. In a QIP, the issuing company does not have to undergo elaborate procedures (such as in an IPO) to raise this capital.

Yay ? or  ? Nay?
We'd love your thoughts on this market recap.

Haven't tried out Upstox yet? Click here to open your account now!

Disclosures and Disclaimer

Investment in securities markets are 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.