Market recap for 3 December 2020

Nifty50 13,133 ▲ +20 (+0.15%)

Sensex 44,632 ▲ +14 (+0.03%)

After a gap-up opening, the Nifty50 declined and remained subdued for the rest of the day. It seemed as if traders preferred a ‘wait-and-watch’ strategy ahead of the RBI’s interest rate decision tomorrow. Meanwhile, Asian markets ended the day on a positive note, whereas European indices were flat to negative. The Nifty PSU Bank index zoomed 4.8% with solid gains registered by nearly all major PSU banks including Bank of Baroda (+7.9%), SBI (+3.8%) and PNB (+5.3%). The Nifty IT index was down 0.5%, mainly due to TCS (-1.4%), Infosys (-1.3%) and L&T Infotech (-1.1%). 

Top gainers (Nifty50)

Top losers (Nifty50)

Here are the top stories for the day.

Services PMI dips in November

Manufacturing PMI numbers, released earlier this week, showed that the Indian manufacturing sector lost some steam in November 2020. Today, the Service PMI gave similar indications as the figure for November dropped to 53.7 from 54.1 in the previous month. Growth constraints and travel restrictions dented the Services PMI. Nonetheless, a number above 50 means expansion in activity.  

Maruti surges ahead on strong outlook

India’s largest carmaker was the top gainer (+7.3%) in the Nifty50 today. The rise in shares was supported by above-average volumes and has come after two months of sideways movement. The strong investor interest was seen after the management stated that the company expects 2021 to be better than 2020 as the economy rebounds. The strong revival in sales is expected given that sales during April-June 2020 were extremely weak. For November, the domestic passenger vehicle volumes dipped 1.7% over the same period last year. For December, however, the management expects retail sales to be strong as there are pending orders with its dealerships. Further, as per media reports, the rate of enquiries has sustained even after the festive season.

Tata Chemicals hits record high

Soda-ash maker Tata Chemicals hit a new lifetime-high after gaining 6.4% today. The stock surged 22% in November and has further risen 16% in December. As per bulk deal data, promoter Tata Sons increased its stake in the company by 0.71%. As of September 2020, Tata Sons cumulatively owned 35.47% of the company. Generally, the increase in promoter stake in a company boosts investor confidence. Further, the expected demand recovery in the auto and real estate sectors augurs well for the demand for soda ash, which is a key component in the manufacture of glass used in windshields and windows.

Closing bell

Although the markets closed in the green today, the movement of the indices was against the current upward trend. The gap-up opening and decline thereafter indicates profit booking. Tomorrow, as the RBI announces its decision on interest rates, volatility is expected in rate-sensitive sectors such as banks, auto and real estate. 

Good to know

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