Market recap for 3 March 2021

Nifty50: 15,245 ▲ 326 (+2.1%) 

Sensex: 51,444 ▲ 1,147 (+2.2%)

The markets opened with a gap-up today, and after some initial weakness, steadily rose to close about 2.2% higher. With today’s gain, both the Nifty50 and Sensex have fully recouped the losses made on Friday. In all, 43 of the Nifty50 stocks advanced today. 

Except for the Nifty Auto index (-0.6%), all sectoral indices closed in the green today, with the Nifty Metal (+3.3%) and Nifty PSU Bank (+3.1) posting the strongest gains.

Here are the top stories of the day.

Sugar shares gain on rising global prices

• Shares of sugar manufacturing companies such as Bajaj Hindusthan (+20.0%) and Dwarikesh Sugar (+10.0%), Shree Renuka (+9.6%) and Triveni Engineering (+4.3%) were upbeat today. Globally, sugar prices have risen nearly 30% in the last six months due to supply concerns from Brazil, the world’s largest sugar producer.
• Further, the firmness in sugar prices is accentuated by expectations of lower than anticipated surplus stocks in India, which is the second-largest producer. Any rise in exports from India will further reduce inventory and could trigger a price rise in domestic markets.

Forging stocks up on spurt in US truck sales

• A three-fold YoY increase in sales of heavy trucks in the US led to a surge in stocks of Indian forging companies such as MM Forgings (+7.3%), Ramkrishna Forgings (6.0%), and GNA Axles (+0.5%). These companies derive 53%, 40% and 35% of their revenues from exports, respectively.  
• In 2020, March, April and May had a severe negative sales impact due to Covid. Thus, the low-base effect could play a part. Reports suggest that sales of heavy trucks will be in the range of 2.5-2.8 lakh units in 2021, about 4-8% higher than earlier estimates. 

RPP Infra surges on big-ticket orders

• The Chennai-based construction company today announced four order wins totalling up to ₹1,000 crore. After the news broke, the stock jumped about 12% intraday before closing 4.9% higher. 
• All four orders are in the state of Tamil Nadu and are a mix of water resource and highway development projects. With the new order wins, RPP’s outstanding order book stands at ₹3,200 crore, more than 5 times its FY20 revenues. 

MTAR Tech IPO oversubscribed on Day 1

• The initial public offer (IPO) of MTAR Technologies was oversubscribed by 3 times on the first day of the issue. The Hyderabad-based precision engineering company manufactures equipment for the defence, aerospace and nuclear energy sectors.
• The IPO is open for bids till 5 March 2021 at a price band of ₹574-575 per share. You can apply for it here.

Closing bell

The markets zoomed past last week’s high and shrugged off the negativity created by the spike in the US treasury bond yields. The rise in the markets was also supported by positive cues from the Asian and European markets. While the situation looks hunky-dory, traders must continue to watch out for any adverse movement in the US treasury yields and prices of major commodities such as copper, as these could affect overall investor sentiments.

Good to know

What is active fund management?
Active fund management is an investment approach that purposely shifts funds either between asset classes (stocks, bonds, etc.), sectors (sector rotation), or between individual securities (security selection) in order to seek superior returns.

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Investment in securities markets are 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.