Market recap for 19 April 2021

Nifty50: 14,359 ▼ -258 (-1.7%)
Sensex: 47,949 ▼ -882 (-1.8%)

Following a steep gap-down opening, the markets remained in the red all day. Although selling pressure eased throughout the trading session, just five of the Nifty50 stocks managed to close in the green.

Among the sectoral indices, only Nifty Pharma (+0.1%) recorded gains, while Nifty PSU Bank (-4.3%) and Nifty Realty (-4.0%) were the top losers of the day.

Macrotech Developers lists at a discount

• Shares of Macrotech Developers, better known by the name Lodha, listed at a 10% discount over its issue price of ₹486. The stock slid further down to ₹422.6, but managed to close at ₹457.9. 
• Subscribed 1.4 times overall, the IPO saw a lukewarm response compared to subscription levels seen in recent IPOs. Further weakness in the realty sector also weighed on the stock. The Nifty Realty index is down 10% so far this month.

Bank stocks hit by fear of bad loans

• The fears of rising bad loans have started creeping back due to the rising Covid cases and regional lockdowns in the country. The damage reflected in the Nifty Bank (-2.4%) and PSU Bank (-4.3%) indices. 
• Among the individual stocks, RBL Bank (-6.6%), Federal Bank (-5.8%) and Bandhan Bank (-5.4%) witnessed selling pressure coupled with a rise in volumes. However, it must be noted that share prices of large banks—HDFC Bank (-1.12%), ICICI Bank (-1.1%) and Axis Bank (-3.1%)—did recover intraday after the first hour of selling.

Jubilant Pharmova develops oral Remdesivir

• Shares of Jubilant Pharmova, part of the Jubilant Bhartia Group, surged over 10% intraday after the company announced the development of the novel oral form of Remdesivir.
• The company states that it has successfully completed animal and human trials of this form of the antiviral drug, used to combat Covid. It now seeks authorisation for further trials on the drug from the Drug Controller General of India (DCGI). The stock gained 6.3% today.

Surge in cases hurts multiplex stocks

• Rating agency CRISIL has downgraded the ratings of bank facilities of multiplex operators such as Inox and PVR. The rating action comes in the light of medium-term weakness in their business risk profile. 
• Given the recent restricted conditions, releases of strong content scheduled in Q1FY22 are likely to be delayed, affecting the operations of multiplexes. The shares of Inox (-4.1%) and PVR (-3.6%) have contracted about 11% and 18% so far in April.

Closing bell

The sharp fall from today’s opening set aside any bullish cues from the international equity markets. Rapidly rising cases pose the risk of disturbing the economic recovery and could also affect corporate profits. Meanwhile, the India VIX spiked by 10% today indicating that traders expect higher volatility in the coming weeks. The performance of the sectoral indices suggests that investors are flocking toward defensive stocks, namely. Pharma, FMCG and IT.

Good to know

What is an open-market buyback?

A company can buy back its shares from its shareholders either via the open market route or through a tender offer. Under the open market mode, the company can purchase its shares at prevailing rates directly on the stock exchanges. During such a buyback, the company buys its shares up to a certain predetermined price limit. In comparison, in a tender offer, the company reaches out to its investors to buy back its shares at a fixed rate.

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

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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.

Nifty50: 14,359 ▼ -258 (-1.7%)
Sensex: 47,949 ▼ -882 (-1.8%)

Following a steep gap-down opening, the markets remained in the red all day. Although selling pressure eased throughout the trading session, just five of the Nifty50 stocks managed to close in the green.

Among the sectoral indices, only Nifty Pharma (+0.1%) recorded gains, while Nifty PSU Bank (-4.3%) and Nifty Realty (-4.0%) were the top losers of the day.

Macrotech Developers lists at a discount

• Shares of Macrotech Developers, better known by the name Lodha, listed at a 10% discount over its issue price of ₹486. The stock slid further down to ₹422.6, but managed to close at ₹457.9. 
• Subscribed 1.4 times overall, the IPO saw a lukewarm response compared to subscription levels seen in recent IPOs. Further weakness in the realty sector also weighed on the stock. The Nifty Realty index is down 10% so far this month.

Bank stocks hit by fear of bad loans

• The fears of rising bad loans have started creeping back due to the rising Covid cases and regional lockdowns in the country. The damage reflected in the Nifty Bank (-2.4%) and PSU Bank (-4.3%) indices. 
• Among the individual stocks, RBL Bank (-6.6%), Federal Bank (-5.8%) and Bandhan Bank (-5.4%) witnessed selling pressure coupled with a rise in volumes. However, it must be noted that share prices of large banks—HDFC Bank (-1.12%), ICICI Bank (-1.1%) and Axis Bank (-3.1%)—did recover intraday after the first hour of selling.

Jubilant Pharmova develops oral Remdesivir

• Shares of Jubilant Pharmova, part of the Jubilant Bhartia Group, surged over 10% intraday after the company announced the development of the novel oral form of Remdesivir.
• The company states that it has successfully completed animal and human trials of this form of the antiviral drug, used to combat Covid. It now seeks authorisation for further trials on the drug from the Drug Controller General of India (DCGI). The stock gained 6.3% today.

Surge in cases hurts multiplex stocks

• Rating agency CRISIL has downgraded the ratings of bank facilities of multiplex operators such as Inox and PVR. The rating action comes in the light of medium-term weakness in their business risk profile. 
• Given the recent restricted conditions, releases of strong content scheduled in Q1FY22 are likely to be delayed, affecting the operations of multiplexes. The shares of Inox (-4.1%) and PVR (-3.6%) have contracted about 11% and 18% so far in April.

Closing bell

The sharp fall from today’s opening set aside any bullish cues from the international equity markets. Rapidly rising cases pose the risk of disturbing the economic recovery and could also affect corporate profits. Meanwhile, the India VIX spiked by 10% today indicating that traders expect higher volatility in the coming weeks. The performance of the sectoral indices suggests that investors are flocking toward defensive stocks, namely. Pharma, FMCG and IT.

Good to know

What is an open-market buyback?

A company can buy back its shares from its shareholders either via the open market route or through a tender offer. Under the open market mode, the company can purchase its shares at prevailing rates directly on the stock exchanges. During such a buyback, the company buys its shares up to a certain predetermined price limit. In comparison, in a tender offer, the company reaches out to its investors to buy back its shares at a fixed rate.

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

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.