Market recap for 5 April 2021

Nifty50: 14,637 ▼ -229 (-1.5%)
Sensex: 49,159 ▼ -870 (-1.7%)

Despite strong international cues, Indian markets opened weak and stayed in negative territory throughout the day. A rally in IT and metal stocks helped the indices pare some of the losses in the second half of the day. Nonetheless, 37 of the Nifty50 stocks ended in the red.

Only two sectoral indices—Nifty IT (+1.9%) and Nifty Metal (+0.8%)—closed in the green. Meanwhile, Nifty PSU Bank (-4.1%) and Nifty Bank (-3.4%) were the top losers.

Here are the top stories of the day.  

Maha restrictions hurt multiplex and travel stocks

• Following the announcement of stricter restrictions in Maharashtra, selling pressure was seen in shares of multiplex chains such as PVR (-5.2%) and Inox (-3.8%) and mall operators like Phoenix Mills (-7.2%) and Shoppers Stop (-5.5%). 
• The new restrictions also weaken revival prospects for the travel industry. As a result, shares of airlines like Indigo (-4.0%) and Spicejet (-4.9%) tumbled, along with hotel stocks such as Indian Hotels (-4.0%) and Lemon Tree (-5.0%). 
• In contrast, with testing gaining pace, stocks of diagnostic chains like Dr Lal PathLabs (+6.1%), Thyrocare (+7.6%) and Metropolis (+2.7%) saw buying interest.

Adani Ports to fully acquire K’patnam Port

• Adani Ports has announced the acquisition of the remaining 25% stake in Krishnapatnam Port, which is an all-weather port in Andhra Pradesh. The company, which currently owns 75% stake in the port, will pay ₹2,800 crore for the remaining stake.
• Shares of the company rose over 1% today in an otherwise weak market. The stock has gained over 53% in 2021. The company is rapidly expanding its port network, which can handle 24% of the country's total port capacity.

Time Technoplast gets nod for CNG cylinders

• Time Technoplast has received approval from the Petroleum and Explosives Safety Organization (PESO) for its carbon-fibre composite CNG cylinders. The company estimates the annual market size for this product to be over ₹800 crore, for which it is the only local manufacturer. 
• The company has received orders worth over ₹50 crore and expects other tenders to finalise in the coming months. Its stock rose 5.8% today and has risen 32.5% in 2021 so far. 

Manufacturing PMI falls to 7-month low        

• The India Manufacturing PMI, considered the barometer of industrial activity in the country, came in at 55.4 for March 2021. This is the lowest reading in 7 months and lower than the February figure of 57.5.
• According to IHS Markit, the escalation of the Covid-19 pandemic constrained demand growth, while the rise in input buying was curtailed by cost pressures. Further, the survey also noted that with the increased restrictions and lockdown measures, Indian manufacturers may experience a challenging month in April.

Closing bell

Investor sentiments were severely impacted after India reported more than 1 lakh new cases yesterday, which is the highest daily count since the time pandemic has struck. While the vaccine roll-out is happening at a steady pace, the markets seem to be fearing wider lockdowns, which could slow down business activity. Stocks of banks were worst impacted today as investors have started looking at risks rather than growth. Today’s fall was largely the outcome of the domestic situation, as major international markets are trading in the green. This week, the RBI will announce its interest rate decision, and the street expects it to keep interest rates steady.

Good to know

What is the liquidity ratio?

Liquidity ratio is calculated by dividing the company’s total current assets (cash, receivables and inventory) by its total liabilities (payables and outstanding expenses). It’s a measure of the creditworthiness and financial stability of a company. A regular default of short term-liabilities may indicate that the company could go bankrupt.

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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.