Auto prices on fast lane

Nifty50: 15,692 ▲+2 (+0.0%)
Sensex: 52,372 ▼-13 (-0.0%)

After a gap-up opening markets were steady in the first half of the session. However, they saw some selling pressure in the second half and closed flat for the day. In all, 27 of the Nifty50 stocks closed in green. 

Among the Nifty sectoral indices, Realty (+3.6%) and Bank (+0.3%) were top gainers, whereas IT (-0.4%) and Metal (-0.2%) saw some weakness. 

Here are the top stories of the day.

Maruti Suzuki raises prices

• India’s largest car manufacturer today announced that it will increase the prices of its popular brand Swift and all CNG variants with immediate effect. The company said that it will be hiking prices by ₹15,000 due to an increase in input costs. 
• The prices of its other models will also be hiked soon, the company added in its exchange filing. Rising input cost is an industry-wide phenomenon and as seen in the past, other players could follow suit. Shares of Maruti Suzuki were up 0.5% and the Nfty Auto index was up 0.1% today.  

Godrej Prop to invest over $1 bn in couple of years

• The Mumbai-based real estate developer will invest over $1 billion (about ₹7,500 crore) in the next couple of years. It will acquire and develop new projects to achieve its target of higher growth.
• The company was the largest developer by value and volume of sales in FY21. It recorded sales bookings of ₹6,725 crore in the last fiscal, surpassing nearly ₹6,000 crore achieved by Macrotech Developers (earlier known as Lodha Developers). The company said business was impacted in FY21 due to the pandemic but expects FY22 to be a year of strong growth. Shares of Godrej Properties were up 2.5% today.

SFB holding companies’ shares surge 

• Shares of Equitas holdings and Ujjivan Financial Services were locked in the 20% upper circuit today. This comes after the Reserve Bank of India allowed small finance banks to merge with their holding companies on completion of five years from the date of commencement of business. 
• With the merger, the so-called holding company discount will disappear. After the merger, investors of the holding companies will get shares of SFBs in a swap deal as these holding companies will cease to exist. 

Crude oil falls on rising cases  

• Crude oil prices fell due to concerns over the impact of rising cases on economic growth. The spread of the Delta variant is leading to a rise in cases globally, including in the UK and US. 
• Further, the OPEC+ alliance had earlier failed to reach an agreement on increasing production levels. Analysts believe that crude oil prices could remain volatile till there is clarity from OPEC and its allies. After hitting nearly $77 per barrel last week, US crude oil is currently trading below $75.  

Closing bell

Looking at the intraday selling today, it seemed as if the markets got cold feet ahead of the inflation and IIP data release today. Meanwhile, the international indices gave mixed cues, as Asian indices were up and the European markets were down. While the FII flows have been shaky so far this month, the positive flows from domestic institutions are playing the balancing act. Traders would now pin hopes on the data releases this week and the ongoing result season to trigger a break on either side in the benchmark Nifty50, which is locked in a range. 

Good to know

What is a reverse merger?
A reserve merger refers to a private company taking over a publicly-traded company or when an entity buys out its parent company. In the first case, it is one of the ways for a private company to go public. And in the second case, the reserve merger is done to create a larger company. For instance, in 2002, parent company ICICI merged with ICICI Bank to create a large bank that can cater to multiple segments. 

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