Heavyweights lead the rally

Nifty50: 17,377 ▲+54 (+0.3%)
Sensex: 58,296 ▲+166 (+0.2%)

After opening at a new lifetime high, the markets lost some of their steam, but remained above their Friday closing. The Nifty50 was almost evenly split, with 24 of the benchmark index’s stocks closing in the green.

Among the sectoral indices, Realty (+3.1%) continued its surge from last week, followed by IT (+1.5%). The Bank (-0.4%) and Financial Services (-0.2%) indices were the top losers today. 

Here are the top stories of the day.

Engineers India bags large contract

The state-owned engineering company has received an order worth ₹1,039 crore from the Chennai Petroleum Corporation. Under the contract, Engineers India will undertake engineering, procurement and construction management of the 9 MMTPA Cauvery Basin Refinery. The project is scheduled for completion in 42 months.

As per the company’s Q1FY22 filing, its orderbook stood at ₹7,530 crore. Interestingly, 60% of the order book includes consulting orders which deliver an average 30% margins compared to an average 5% margins in the turnkey projects business. The stock gained 2.3% today. 

Ashoka Buildcon soars on highway deal

Shares of the highway developer surged nearly 7% intraday after the company bagged a ₹1,567 crore deal from Adani Road Transport. The Engineering, Procurement and Construction contract involves six-laning a section of the NH-19 in West Bengal.

As of June 2021, the company’s order book stood at ₹9,472 crore. The stock closed 1.3% higher today, but has been in consolidation mode since mid-July. 

Bajaj Healthcare launches Covid treatment

The company has launched the API and formulation of an antiviral drug meant for use in the treatment of Covid. Called DGJAJ, the drug was developed in collaboration with the Defence and Research Organisation (DRDO). 

As per the drugmaker, its formulation helps quicker recovery of hospitalised patients, and reduces dependence on supplemental oxygen. The company’s shares gained 4.5% intraday and closed 2% higher. Bajaj Healthcare’s shares are listed only on BSE. 

Closing bell

Markets started the week with a flying start and continued their upward journey from last week. Support for the rise came from index-heavy weights such as Reliance Industries and Infosys, which were top gainers in the Nifty50. This week, the markets could struggle for cues primarily because the US markets are closed today on account of Labor Day, while the Indian markets will be closed on Friday for Ganesh Chaturthi. Furthermore, the markets have witnessed a strong rally in the past few sessions. In this context, traders must watch out for the market’s momentum. Generally, markets are prone to consolidation or profit booking after a sharp run-up.  

Good to know

What is open interest?
Open interest (OI) refers to the number of outstanding derivatives contracts, which haven’t been settled yet. For instance, if a trader goes long and buys two contracts the open interest will be two. Similarly, another trades goes short and sells one contract, now the total open interest will be three. Until their counterparty exits the position, it will be considered as ‘open’. Traders use OI data to understand the strength of a trend e.g. rising pricing coupled with increasing OI indicates continuation of uptrend. Similarly, falling prices coupled with rising OI indicates continuation of the downtrend.  

Yay 👍 or Nay 👎?

We'd love your thoughts on this market recap.

Haven't tried out Upstox yet? Click here to open your account now!

To catch our latest educational videos, join our Telegram channel here.

Disclosures and Disclaimer

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.