Market Recap for 2nd September 2020

Here are the top stories for the day.Today, the Nifty50 gained marginally, supported by a strong performance by global equity markets as well as encouraging data emerging from the domestic market. Most sectoral indices closed in the green, with strong gains posted by the Nifty Media (+3.4%) and Nifty Metal (+1.7%) indices. The Nifty Midcap 100 (+1.4%) and Nifty Smallcap 100 (+1.7%) indices showed signs of bounce back after sharp declines seen on Monday.

After dismal Q1, are green shoots showing already?

While the GDP for Q1 contracted 23.9%, other recent data releases indicate signs of economic recovery. As mentioned in our newsletter yesterday, the manufacturing PMI (purchasing managers’ index) data for August has risen to its highest level in the last five months. Further, August auto sales volumes too have bounced back, owing to the pent-up demand and festive season stocking. Meanwhile, India's Maharatna coal producer, Coal India, reported a 9.3% rise in coal sales in August versus the same period last year. Similarly, NMDC, India's largest producer of iron ore, reported a 20.1% jump in iron ore sales for August on a year-on-year basis. It remains to be seen how much of this growth sustains in the rest of FY21. Meanwhile, shares of Coal India rose 2.1% ahead of its Q1 results, today.

Adani Green up 10%; group is the largest solar power asset owner in the world

Adani Group has been ranked the largest solar power generation asset owner in the world. Adani’s solar portfolio is 12.32 GW, which exceeds the total installed capacity of the U.S. in 2019. The group is targeting an installed capacity of 25 GW of renewable power by 2025. Its renewable energy company, Adani Green Energy, gained 10% today (its lifetime high) and has risen over 225% in 2020. Interestingly, other Adani Group companies were also in the limelight. Adani Gas (+7.6%), Adani Enterprises (+4.0%), Adani Port (+3.2%), Adani Power (+0.9%) and Adani Transmission (+4.3%) all ended in the green.

Vodafone Idea rises 12.4% on fundraising news 

The Vodafone Idea board of directors will meet on 4 September to evaluate fundraising plans. The stock gained 12.4% after the news. The company is expected to target a big fundraise, since there is now clarity on both the quantum of AGR dues and the repayment timelines. Further, the company could even raise funds by monetizing assets, notably, its fibre assets and data centres. Amidst all this, any news of a tariff hike could act as a sentiment booster.

Closing bell

In the US, the tech-based rally continues to remain strong. Video conferencing giant Zoom jumped more than 40% on Tuesday on the back of solid Q2 results and raised its revenue forecast for fiscal year 2021. In India, market movements will not only take global cues but will also be impacted by any signs of additional stimulus for economic recovery after poor Q1 GDP numbers.