Markets hit new highs

Nifty50: 16,563 ▲33 (+0.2%)
Sensex: 55,582 ▲145 (+0.2%)

After a weak opening, the benchmark indices turned green and closed at new lifetime highs. However, the market breadth was negative, with 29 of the Nifty50 stocks closing in the red. 

Among the Nifty sectoral indices, Metal (+1.4%) and FMCG (+0.3%) made the strongest gains, while Media (-1.4%) and PSU Bank (-0.9%) were the weakest today.

Here are the top stories of the day.

RIL shares jump on Aramco deal

Shares of Reliance Industries rose about 2.5% intraday after the news that Saudi Aramco is in advanced stages of acquiring a stake in the company’s oil refining and chemicals business.

Through the deal, Saudi Aramco is expected to acquire about 20% of the Reliance unit. The all-stock transaction is worth roughly $25 billion of Saudi Aramco shares. With it, Reliance would have about 1% stake in the Saudi Arabian oil company. Reliance’s stock closed 1% higher today.

IPO stocks make mixed debut

Four stocks—Devyani International, Windlas Biotech, Exxaro Tiles and Krsnaa Diagnostics—debuted on the bourses with mixed reception. Devyani International, the franchisee of brands like Pizza Hut and KFC in India listed on the NSE at a 56% premium to its issue price of ₹90, and was the strongest debutant of the day. However, the share price couldn’t sustain at higher levels and saw profit booking later during the day. 

Shares of Exxaro Tiles and Krsnaa Diagnostics opened their innings with listing gains of around 5%, while Windlas Biotech listed 5% below issue price. 

Oil prices tank on demand fears

Crude oil prices showed weakness, indicating demand concerns in the light of the fast-spreading Delta variant and rising cases in the US and several major countries. 

Prices dropped for the third day in a row and have corrected over 8% so far this month. Meanwhile, shares of domestic oil exploration companies such as ONGC (-0.6%) and Oil India (-1.5%) closed in the red. 

Closing bell

Although the markets had a shaky start, they were comfortably in the green for most of the day. As with retail inflation, wholesale inflation too cooled off and comforted market sentiments. Metals stocks gained as the steel cycle continued its uptrend and investors saw a favourable outlook for Q2 as well.  Further, a rise in share price of index-heavyweight Reliance Industries helped the Indian markets to overcome the weakness seen in international indices. To sum up, benchmark Nifty50 closed at a lifetime high indicating that the broader uptrend is intact… so far.

Good to know

What is a yield curve?
A yield curve reflects the interest rates of bonds that have equal creditworthiness but different maturity dates. For instance, the most popularly tracked US Treasury yield curve reflects the relationship between these US government bonds with various maturities (from 1 month to 30 years). A normal curve (upward) reflects economic expansion, while an inverted (downward) curve means that the debt market expects recession. These yield curves indicate how investors perceive the macro risks and the economy.  

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Investment in securities markets is 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.