▲ Nifty: 11,971 (+0.31%) ▲ Sensex: 40,794 (+0.42%)
Today, the markets opened on a weak note and were dragged down due to profit booking in IT shares. However, buying in banking and NBFC shares triggered a recovery, which resulted in both the Nifty50 and Sensex closing in the green. The top five gainers in the Nifty50—Bajaj Finserv (+4.1%), SBI Life (+3.4%), Bajaj Finance (+2.8%), Indusind Bank (+2.4%) and ICICI Bank (+2.4%)—were BFSI companies. The Nifty Bank index ended with gains of 1.6%, whereas the Nifty IT index was down 1.2%.
Here are the top stories of the day.
Profit booking seen in Wipro after results
Shares of Wipro fell 7% after the IT major announced its Q2 results. While the sequential revenue growth* of 2.0% was in line with the market expectations, the stock witnessed some profit booking after it had already risen 20% this month before the results. One reason could be that there were no major upside surprises in the results. Even the buyback offer at ₹400 (~6% premium to yesterday’s closing price) failed to bring cheer to investors. IT majors such as Infosys (-1.7%) and TCS (-0.1%) also fell today.
*on constant-currency terms
Tata Steel Long Products hits upper circuit
Tata Steel Long Products (TSLP), one of India’s largest sponge-iron manufacturers, is back in the green after a weak Q1FY21. The company’s performance was crippled in April-June quarter due to the lockdown restrictions, while FY20 saw sluggish demand from the auto sector. In Q2FY21, the company posted a net profit of ₹59 crore, as against a loss of ₹131 crore in the previous quarter and a loss of ₹197 crore in Q2 last year. Phased relaxation of lockdown restrictions and a recovery in demand are likely to have helped the strong performance. Shares of TSLP hit the 20% upper circuit today. Tata Steel, which holds ~76% in the company, also rose 2%.
SBI Cards hits record high riding on festive fever
Shares of SBI Cards, India’s largest pure-play credit card issuer, were up 4% today and hit a new lifetime high of ₹891. Ahead of the festive season, the company has announced special offers and partnerships with online and offline retailers. SBI Cards was listed in March 2020 and saw a rather dismal debut, losing about 10% on its listing day from the issue price of ₹755. The stock had further dropped to a low of ₹495 in May 2020. However, the stock has seen a steady recovery over the last few months.
The intraday recovery and positive close of the market came as a bit of a surprise, given the weak opening and higher-than-expected consumer and wholesale inflation numbers. Tomorrow, IT stocks are expected to see increased action after Infosys announced better-than-expected sequential revenue growth for Q2, and an upward revision in its revenue growth outlook for FY21.