Metals ‘steel’ the show

Nifty50: 15,778 ▲+69 (+0.4%)
Sensex: 52,653 ▲+209 (+0.4%)

After a gap-up opening, markets stayed in the positive territory for the rest of the day. Despite this bullishness, 27 of the Nifty50 stocks closed in red. 

Amongst the Nifty sectoral indices, Metal (+5.0%) and PSU Bank (+3.2%) were top gainers whereas FMCG (-1.0%) and Auto (-0.4%) were top losers for the day. 

Here are the top stories of the day.

Steel stocks rally on Chinese tariff plan

• According to reports, China is expected to impose tariffs on its steel exports to cut production in a bid to limit pollution and to ensure adequate steel availability in the country. This may include an export tariff of 10–25% on steel products like hot-rolled coil. This comes after the country has already withdrawn incentives on steel exports offered to Chinese steel mills.
• After this move, Chinese steel could become costlier, making it less competitive in global markets. This is likely to result in dual benefits for Indian steel producers. First, some of the steel demand could move to India, and second, steel prices could increase. Against this backdrop, shares of Tata Steel (+6.8%), JSW Steel (+3.3%), SAIL (+5.6%) and Jindal Steel (+4.1%), were upbeat today.

Tatva Chintan makes strong debut

• The shares of the specialty chemicals manufacturer listed at a premium of 95% today against the issue price of ₹1,083 per share. This comes after the company's IPO was oversubscribed 180 times.
• Meanwhile, the IPO season continues. On Day 3, pharma company Glenmark Life Sciences was subscribed more than 40 times. Further, auto components maker Rolex Rings' IPO, which is open till 30 July, has been oversubscribed by more than 7 times. You can apply for this IPO on Upstox by clicking here.

Tejas Networks surges after stake sale

• The shares of the telecom equipment manufacturer hit the 5% upper circuit today, after the company said that Panatone Finvest is acquiring a majority stake in it for ₹1,850 crore. The Tata Sons’ subsidiary will buy a 43% stake at ₹258 per share, which is at a 5.7% premium to today’s closing price of ₹244 per share. 
• The company management said that it will use the proceeds to invest in R&D, sales, marketing, people and infrastructure. The acquisition deal will also trigger an open offer for 26% of the company’s shares, in which existing investors have the option to tender their shares. 

Closing bell

The US Fed announced that it will keep interest rates low and continue its monthly bond buying program till it sees substantial progress in the economy. While the street was expecting the interest rates to remain unchanged, the reiteration that the bond buying program will continue was positive. Asian as well as European equity markets were up today. Further, the estimates beating June quarter results of US-based tech giants like Apple, Microsoft, Google have kept the market sentiment upbeat. The Nifty IT index is up 1.6% so far this week. 

Good to know

What is F&O expiry?
The Futures & Options (F&O) expiry refers to the day on which the current derivative contracts expire and have to be settled. On the very next day, new contracts are added. On Indian stock exchanges, the monthly F&O contracts expire on the last Thursday of each month. The settlement of the contracts can happen either through physical delivery or by cash. Certain indices such as Nifty and Bank Nifty also have weekly derivatives, which expire every week on Thursday. 

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Investment in securities markets is 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.