▼ Nifty: 11,131 (-0.20%) ▼ Sensex: 37,668 (-0.17%)
Although the Nifty50 ended the day in the negative, the last-hour buying in banking stocks helped the overall markets recover from the day's lows. Bank stocks, which were under pressure over the last two days, saw buying interest at lower levels. Axis Bank (+2.4%), HDFC Bank (+1.3%) and Kotak Bank (+0.6%) were among the top gainers, while Bharti Airtel and Bharti Infratel lost over 8% each.
Here are the top stories of the day.
Voda-Idea, Airtel face heat from Jio's aggressive pricing
The action in the telecom sector continues after Reliance Jio announced aggressive postpaid plans. Shares of Airtel (-8.1%) and Vodafone Idea (-10.7%) dropped sharply today. Postpaid customers are known to be sticky and deliver better average revenue per user (ARPU) as compared to prepaid customers. Jio's new offering could trigger a churn from incumbents unless they match the offerings, which in turn could result in lower revenue and/or higher costs. Further, the burden of AGR dues (10% of AGR dues to be paid by 31 March 2021) weighs over Airtel and Vodafone Idea. Meanwhile, Reliance Industries (RIL) shares were up 0.7% today. RIL also saw investor interest as it announced that it has sold 1.28% in its retail arm to private equity firm KKR for ₹5,550 crore.
SP Group companies gain on plans to exit Tata Sons
Shapoorji Pallonji (SP) Group, which holds 18.4% in Tata Sons, has offered to sell its entire stake for a massive sum—estimated to be as high as ₹1.75 lakh crore. The windfall could help the cash-strapped SP Group solve its financial problems by not only becoming debt-free but also provide surplus capital for its businesses. The shares of SP Group's listed companies—Sterling & Wilson Solar (+19.9%) and Forbes & Co (+5.0%)—surged on this development. Meanwhile, shares of TCS were down 2.4% on the expectation that Tata Sons may reduce its stake in TCS to raise funds to buy back the stake from SP Group.
IPOs in demand despite shaky market
Profit booking seems to be the flavour of the week in the Nifty50. The benchmark index is down 3% since Monday. However, this has not dampened the demand for IPOs. On the contrary, IPOs closing today have received huge over-subscriptions—Chemcon (148 times) and CAMS (47 times)—as of 5 pm today. The Angel Broking IPO, which closes tomorrow, is already fully subscribed. The high subscription numbers could be due to the stellar listing gains of the recent IPOs of Happiest Minds and Route Mobile. Further, investors are seeking better opportunities in an otherwise shaky market.
Closing bell
As per a UN report, the global economy is expected to contract 4.3% in 2020. Equity markets are likely to reflect this reality as the positive effects of the stimulus-fueled growth start fading, and possibilities of additional stimulus become uncertain. Looking at the recent trend, it seems like investors are starting to turn risk-averse, be it equities or bullion.