Market recap for 17 March 2021

Nifty50: 14,721 ▼ 189 (-1.2%)

Sensex: 49,801 ▼ 562 (-1.1%)

Today, the Indian markets fell for the fourth consecutive day. The selling pressure was seen across the board, with 48 of the Nifty50 stocks ending in the red.

All the Nifty sectoral indices declined today, with PSU Bank (-3.7%) and Nifty Bank (-2.9%) being the top losers.

Here are the top stories of the day.  

Vedanta promoters pledge entire stake

• Promoters of the mining major Vedanta have pledged their entire stake, around 55%, in the company in a bid to raise funds.
• The funds raised will be used to acquire shares of Vedanta and also repay the debt of other promoter companies. Vedanta’s shares fell about 1% in a weak market.

ABB Power bags BALCO order

• ABB Power Products has bagged a ₹124 crore project from Bharat Aluminum Company (BALCO).
• The company will deliver its gas-insulated switchgear substations, which will replace the existing apparatus at BALCO’s Korba plant in Chhattisgarh. Shares of ABB Power were up 2.2% intraday. They, however, succumbed to market weakness and closed 1.3% down. 

BPCL falls on underwhelming dividend 

• The state-owned oil marketer’s stocks plunged 5% after it announced a lower than expected interim dividend. The street expected the company to declare a handsome dividend after the sale of its Numaligarh Refinery, which was sold for ₹9,876 crore. 
• Analysts expected a dividend to the tune of ₹30-60 per share. In comparison, the company declared ₹5 per share.  

Gold back on investors’ radar

• International gold prices have fallen nearly 20% after hitting a nine-year high in August 2020. Last week, gold saw some buying interest and rose about 1.7% in the US markets. 
• Media reports suggest that inflation, and not Covid, is now the top risk to the markets. With inflation inching up, it comes as no surprise to see renewed investor interest in gold, which traditionally is seen as a hedge against inflation. 

Closing bell

Weak global cues, rising US Treasury yields, domestic inflation concerns and the fear of the second wave of Covid infections in India are cumulatively weakening investor sentiments. Today, the market gave a decisive downward move as suggested by the long red candlestick on the daily charts. The capitulation of the bulls was evident in the Nifty Midcap 100 (-2.4%) and Smallcap 100 (-2.2%) indices, which were performing strongly so far this year. The US Fed is expected to announce its interest rate decision tonight, which could have a bearing on foreign fund flows.

Good to know

What is a junk bond?

These are bonds issued by companies that are struggling financially and have a high risk of defaulting on their principal or interest payments to investors. Given the higher risk, junk bonds offer investors higher yields than bonds of financially sound companies. This is similar to borrowers with low credit scores being charged high interest rates by lenders to offset any risk of default.

Yay ? or  ? Nay?
We'd love your thoughts on this market recap.

The IPOs of Kalyan Jewellers, Suryoday Small Finance and Nazara Technologies are live! You can subscribe to these public issues with Upstox here.

Haven't tried out Upstox yet? Click here to open your account now!

Disclosures and Disclaimer

Investment in securities markets are 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.