Market recap for 19 January 2021

Nifty50: 14,521 ▲ 239 (+1.6%)

  Sensex: 49,398 ▲ 834 (+1.7%)

The markets opened with a gap-up and continued to rise for the rest of the day. The recovery was sharp after a two-day fall, with 46 out of the Nifty50 stocks closing in the green. 

All sectoral indices closed positive with most gains seen in the Nifty Realty (+4.1%) and Nifty Metal (+2.4%) indices. 

Here are the top stories of the day.

Paint stocks rise ahead of Indigo paints IPO

• India’s fifth-largest decorative paint maker, Indigo Paints, opens its ₹1,170 crore issue for application tomorrow. The price band is fixed at ₹1,488-1,490.
• Meanwhile, shares of other major paint makers were upbeat today with Akzo Nobel (+3.3%), Asian Paints (+2.4%) and Berger Paints (+1.9%) seeing gains. Even the smaller-sized Shalimar Paints (+13.7%) saw a sharp rise today. The pick-up in demand in the real estate sector also augurs well for the paint industry. 

Escorts gets nod for electric tractors

• Escorts has become the first Indian tractor manufacturer to receive permission to sell electric tractors in the country. The company has been exporting its electric tractors since 2019.
• Shares of the tractor maker gained 0.3% today. While Escorts’ tractor sales volumes are seeing strong growth, it seems investors are choosing to book profits. Shares of Escorts fell 4.4% in Q3, whereas the Nifty Auto index was up nearly 16% in the same period.

Bank of Maharashtra rises on improved net profit

• State-owned Bank of Maharashtra reported 14% YoY rise in Q3 net profit to ₹154 crore and 10% YoY rise in net interest income to ₹1,306 crore. 
• Its asset quality improved with net NPA at 2.59% in Q3 versus 3.30% in Q2 and 5.46% in Q3 last year. Its shares surged 7.4% today, coupled with high volumes. The central government owns 93.3% shares, and 2.3% is held by LIC, suggesting a shortage of float in case the demand for the stock rises.

Alembic gains on growth in formulation business

• The Vadodara-based pharma player posted a net profit of ₹259.2 crore for Q3, a 14% YoY growth. Its revenues from operations stood at ₹1,314 crore, a 9% YoY growth.
• The company attributed its growth to the 14% rise in its India formulations business, which stood at ₹418 crore. Meanwhile, its speciality segment and API business gained 16% and 21%, respectively. The positive results notwithstanding, the stock fell 3.2% today.

Closing bell

Most Asian indices (including Indian indices) rose sharply today ahead of US Treasury secretary nominee Janet Yellen’s speech. She is expected to call for generous government action to boost the economy. In anticipation, gold and silver prices also rose nearly 0.4% and 1.8%, respectively.

What is surprising is that the major European indices are trading flat as of now. Meanwhile, the India VIX, which was down more than 15% intraday, jumped and closed 6% lower than yesterday. Traders must be prepared for volatility in the days ahead. 

Good to know

What is a free float?

The free float represents the portion of shares of a company that are in the hands of public investors (retail & institutional) as opposed to the locked-in shares held by promoters or, in case of public sector enterprises, the government.

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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.