▲ Nifty: 11,050 (2.26%) ▲ Sensex: 37,388 (+2.28%)
After falling for the first four days of this week, the markets finally did a U-turn. The bounce-back saw all indices ending the day in positive territory. In sharp contrast to Thursday, 47 out of the Nifty50 stocks rose today. Bajaj Finserv (6.6%), HCL Tech (5.3%) and Cipla (5.1%) were among the top gainers. Meanwhile, SBI Life (-1.1%) BPCL (-0.8%) and UPL (-0.5%) were the only losers. Overall, the Nifty50 lost nearly 4.0% this week.
Here are the top stories for the day.
GMR Infra soars on SEZ stake divestment
GMR Infrastructure announced that it will sell its entire 51% stake in Kakinada SEZ Limited for ₹2,610 crore. This move will help the company reduce its debt, and understandably led to strong buying in the stock, which gained 10.6% today. As of June 2020, GMR Infra’s consolidated net debt stood at ₹26,300 crore. The company is undergoing a strategic group restructuring, following which it would emerge as India’s only pure-play listed airports company.
BPCL slumps on privatisation delays
BPCL shares fell nearly 9% this week, which indicates that investors are losing interest in the stock amid delays and protests around the company’s privatisation. As per reports, it could take anywhere between 7 and 21 months for the sale to be completed, owing to procedural and pandemic-induced delays. The delay in stake sale would mean fiscal deficit woes for the government at the time when the deficit has overshot the FY21 budget estimates.
Pharma stocks gain on USFDA approvals
Granules India hit a new lifetime high during intraday trade, after receiving USFDA approval for its sleeping aid drug. Further, as per reports, three private equity players are eyeing a majority stake in the company. Its shares ended the day with gains of 4.8%. Similarly, pharma major Cipla received USFDA approval for its multiple sclerosis drug. This drug is a generic equivalent of Biogen IDEC’s Tecfidera, which clocked $3.8 billion in sales in the US during the 12-month period ending July 2020. Shares of Cipla were up by 5.1%. Overall, the Nifty Pharma index was up 2.3% today.
Sharply falling markets usually see sharp bounce-backs. That’s precisely what we saw today. However, Asian indices were mixed and key European indices were clearly down. Whether we are in a ‘buy-on-decline’ or a ‘sell-on-rise’ market will be clear after we see how the US markets end this week.