▲ Nifty: 11,930 (+0.14%) ▲ Sensex: 40,593 (+0.21%)
Hi there!
Today, despite a strong opening, the Indian markets gave away most of their early gains, owing to selling in banking shares. Among the sectoral indices, the Nifty IT (+1.6%), Nifty Pharma (+0.9%) and Nifty FMCG (+0.3%) indices gained, while all other indices closed in the red. Infosys (+2.9%), ITC (+2.7%), UPL (+1.9%) and Dr Reddy's (+1.5%) were among the top gainers in the Nifty, while Bharti Airtel (-2.8%), JSW Steel (-2.7%), GAIL (-2.6%) and HDFC Life (-1.9%) were among the Nifty top losers.
Here are the top stories of the day.
Macroeconomic indicators throw a googly
The Index of Industrial Production (IIP), which measures the change in the value of output produced by manufacturers, miners and power utilities stood at -8.0% for the month of August. While the figure for August is negative, it is quite a recovery from -57.6% recorded for the month of April. Going forward, one would expect further recovery owing to the relaxation of lockdown restrictions and the lower base (-4.3%) of September 2019. Meanwhile, the Consumer Price Index (CPI), which measures inflation at the consumer level, jumped to 7.3% in September, the highest in eight months. The figures were higher than the expectation of around 6.8%. The sharp rise could be attributed to inflation in food and beverages (9.7%), which faced supply disruptions during lockdown. If the inflation rate continues to rise, one would expect RBI to rethink its accommodative stance, which it has taken to trigger the economic revival.
Vedanta dips after failed delisting
Shares of Vedanta Ltd fell over 20% today after the company failed in its attempt to delist the stock from the exchanges. In a regulatory filing, Vedanta said its buyback offer is deemed to have failed as per the terms of the delisting regulations after promoter Vedanta Resources did not receive the required number of shares to delist the firm. Shareholders tendered a total of 125.47 crore shares against the 169.73 crore shares sought by promoters. Overall, the share price of Vedanta has dropped nearly 29% this month. Hindustan Zinc, in which Vedanta holds close to 65%, was also down 5% today. Recently, questions were raised regarding Vedanta’s decision to not distribute to its shareholders a dividend worth ₹4,500 crore, which it received from Hindustan Zinc.
Bittersweet listing day for IPOs
The IPO market saw a mixed bag of returns as two of the recent IPOs listed on the exchanges today. The shares UTI AMC listed 11.5% lower than their issue price, whereas shares of Mazagon Docks debuted at a premium of 49% on listing day. The strong opening of Mazagon Docks didn’t come as a surprise given that the issue was oversubscribed by a whopping 157 times. Going by the dismal debut of UTI AMC, investors are likely to turn choosy in the upcoming IPOs.
Closing bell
Finance Minister Nirmala Sitharaman today announced the government's plan to boost capital expenditure and stimulate consumer demand. However, the ₹73,000 crore stimulus failed to cheer investors, as the markets closed almost flat. Meanwhile, the India VIX has gained nearly 15% in the last six trading sessions, hinting at volatility in the days ahead. Investors seem to be banking on defensive sectors in volatile markets, as witnessed by the gains seen in the IT, FMCG and pharma indices, amid a broad fall in other sectors.