Market recap for 16 February 2021

Nifty50: 15,313 ▼1 (-0.0%)

Sensex: 52,104 ▼ 49 (-0.1%)

The markets saw a volatile session today, with the benchmark Nifty50 oscillating nearly 200 points during the day. After a gap-up opening, profit booking saw the indices sink into the red. However, a late recovery helped the indices close nearly flat for the day.

Among the Nifty sectoral indices, the Metal (+2.9%) and PSU Bank (+1.6%) were the top gainers, whereas IT (-1.5%) and Media (-0.8%) lost the most.

Here are the top stories of the day. 

Profit booking hits Varun Beverages

• The Gurgaon-based bottler and Pepsi franchisee managed to cut down losses to ₹7.2 crore versus ₹54 crore reported last Q4 (it follows a calendar year of reporting). Typically, the December quarter is a seasonally weak quarter for the beverage maker. Nevertheless, its revenues grew 9% to ₹1,351 crore. 
• The company attributes the improved quarter largely to cost optimisation measures during the pandemic. Following the positive results, profit booking hit the stock. It dropped 5.4% intraday but recuperated a little to close 4.4% down.

AstraZeneca’s Covid vaccine gets WHO authorisation

• The World Health Organisation (WHO) has authorised the drug maker’s Covid vaccine for emergency use. It is only the second vaccine after the Pfizer-BioNTech vaccine to be authorised by the WHO.
• The WHO said it has cleared the AstraZeneca vaccines made by the Serum Institute of India as well as those made by AstraZeneca-SKBio in South Korea.Shares of AstraZeneca Pharma India rose nearly 10% intraday, before closing 3.1% higher today.

Hike in auto prices likely as metals get costlier

• A sharp rise in raw materials such as steel and aluminium may result in a price hike from automakers around April-May this year, reports suggest. Most passenger car makers announced a price hike of up to ₹45,000 across their models in January.
• Despite renewed optimism in the Indian automotive sector, the rise in prices may hurt some segments more viz. truck companies which are just seeing positive growth and had to take a sharp price hike due to the transition to BSVI.

Jet Airways slumps as relaunch gets delayed

• As per reports, the relaunch of the grounded airline is expected to be delayed by 90 days due to delays in insolvency proceedings.
• The consortium led by UAE-based businessman Murari Lal Jalan and Kalrock Capital, which won the bid for the airline in October 2020, had earlier planned to relaunch the airline in April 2021. The stock, which has rallied over 250% since October 2020, fell 5% and hit the lower circuit today.

Closing bell

While the daily new Covid cases in India have dropped to around 10,000 (from a peak of 95,000+ in September 2020), the rise in fresh cases in Maharashtra is alarming. It could also prompt the state government to take some tough decisions. This comes at a time when conditions seemed favourable for the markets, with strong Q3 results, reasonable inflation and positive global cues. However, PSU banks saw strong buying interest after the government announced that four public banks would be privatised. The four shortlisted banks gained nearly 20% each today.

Good to know

What is CAGR?
Compound Annual Growth Rate, or CAGR, is the annually compounded rate of return. It is a measure of an asset's ability to grow over a given time frame. For example, to double your money in five years, it will have to grow at 15% CAGR. To double it in 4 years, you need a CAGR of 19%.

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