Supply issues may hamper Auto sector & more

Nifty50: 17,362 ▼ -15 (-0.0%)
Sensex: 58,279 ▼ -17 (-0.0%)

The markets witnessed a see-saw movement and closed marginally negative today. However, the market breadth showed weakness, as 31 of the Nifty50 stocks closed in the red.

Gainers in the Nifty Sectoral indices included FMCG (+0.3%) and Financial Services (+0.1%), while Realty (-2.3%) and IT (-1.3%) were the top losers today.

Here are the top stories of the day.

Supply issues may hamper Auto sector

Amid rising demand, automotive dealers are faced with paucity of supply because of the semiconductor shortage. As per auto dealers association, FADA, dealer-level inventory levels are at their lowest this fiscal.

Meanwhile, total auto retail sales in August ‘21 saw a growth of 14.5% year-on-year, however, the number is still nearly 15% lower than August ‘19, which was a pre-pandemic normal month. The Nifty Auto index has declined about 4% in the last two months. Auto majors such as Maruti, M&M and Tata Motors have fallen about 3-13% during that period. 

JSPL jumps on better August sales

In its latest monthly update, Jindal Steel & Power Limited reported sales of 7.1 lakh ton in August, up 6% MoM and 4% YoY. The rise in sales comes despite subdued construction activities due to the ongoing monsoons.

The share of exports in total sales volumes rose to 42% from 40% in July. Meanwhile, the company expects the domestic demand to rebound sharply post monsoons. Its shares rose 2.1% today, but trade nearly 20% below their 52-week high, achieved in May 2021.  

Panacea Biotec soars on Sputnik V delivery 

The vaccine and pharmaceutical maker has manufactured and supplied 1 million doses of Russian Sputnik V vaccine. This is the company’s first shipment of this vaccine and it will be distributed in India through Dr Reddy’s. 

In April this year, the Panacea Biotec had signed an agreement with the Russian Direct Investment Fund to manufacture 100 million doses of Sputnik V vaccine. Meanwhile, the shares of Panacea Biotec were up 8.1% today. 

Closing bell

While the market movement was jittery today, the benchmark indices closed almost flat. It is normal for markets to take a breather, in the form of profit booking or consolidation after a sharp rally. Today, it closed sideways and showed signs of consolidation. International indices too were a mixed bag. However, as we had mentioned yesterday, amid such conditions, a trader must remain cautious and look out for any indication of loss in the market momentum. 

Good to know

What is inventory?
Inventory refers to finished goods and raw materials owned by a company. On the balance sheet, it is mentioned as a current asset. Monitoring inventory levels is extremely important for the company management as well as investors. For instance, if a company is able to sell its inventory at a faster rate compared to its competitors it is considered more efficient. Optimum level of inventory helps a company in improving its cash flow. 

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