▲ Nifty: 11,662 (+1.38%) ▲ Sensex: 39,574 (+1.54%)
The Nifty50 has risen 8% in the last seven trading sessions with banking and IT stocks driving this surge. Both the Nifty Bank and Nifty IT indices gained nearly 11% during the same period. Today, 37 of the Nifty50 stocks ended positive. Among the top gainers were Tata Motors (+7.7%), HDFC (+7.5%) and Adani Ports (+3.5%), whereas Britannia (-1.5%), Coal India (-1.3%) and Wipro (-1.2%) were top index losers.
Here are the top stories of the day.
HDFC twins play index torch-bearers
HDFC and HDFC Bank together account for 16.1% weightage in the Nifty50, and the twins clearly drove up the country’s flagship index today. In Q2FY21, HDFC witnessed a strong recovery with individual loan disbursements reaching 95% of pre-Covid levels. In fact, the total value of loan disbursements in the month of September is higher by 11% on a year-on-year basis. Positive trends were also seen in HDFC Bank, which saw a 16% growth in loans and a 20% rise in deposits (YoY). As the business of these industry leaders moves back to normal, their shares rose today—HDFC (+7.5%) and HDFC Bank (+2.6%).
Paint stocks glisten green after hitting record highs
What happens when the real estate sector makes a comeback, and housing loans disbursements increase? Shares of paint companies shine and that’s exactly what we saw today. The top two players in the paint industry—Asian Paints (+3.1%) and Berger Paints (+2.4%)—hit new all-time highs. It seems like the market expects an improvement in revenue and margins in Q2. The upcoming festive season could also add to the cheer. Asian Paints will declare its Q2FY21 results on 22 Oct while the date for Berger Paints’ results is yet to be announced.
Tata Motors zooms on strong JLR sales
Shares of Tata Motors soared 7.7% on the back of a strong 53% quarter-on-quarter growth in Jaguar-Land Rover (JLR) sales in the quarter ending September 2020. The company recorded strong sales growth in the UK (232%), Europe (79%) and the US (21%). However, sales in these regions are yet to reach pre-Covid levels from a year ago. China, which used to be the largest market for JLR in FY18, saw volumes decline in the last two years. However, green shoots are visible with a 4% YoY increase in volumes from the first country to emerge out of lockdown. JLR retailers worldwide are now open and the company’s plants are ramping up production to meet increasing demand.
Closing bell
Market sentiments are positive for now and they reflect the industry’s optimism. The Services PMI is at a six-month high, while the Manufacturing PMI is at its highest in over eight years. As we enter the Q2 results season one could expect heightened stock-specific activity.