Markets volatile but resilient

Nifty50: 17,353 ▼ -8 (-0.0%)
Sensex: 58,250 ▼ -29 (-0.0%)

The benchmark indices showed weakness intraday, but recovered toward the end of the session and closed flat. The ​​market breadth was positive with 28 of the Nifty50 stocks posting gains.

Among the Nifty sectoral indices, Bank (+0.8%) and PSU Bank (+0.7%) were the strongest gainers, while IT (-0.7%) and Media (-0.6%) ceded the most today.  

Here are the top stories of the day.

Voda-Idea shares fall

After rising nearly 10% intraday, shares of Vodafone Idea plummeted and ended 2% below yesterday’s closing price. The stock faced selling pressure after the cabinet meeting did not consider the telecom department’s proposals to provide financial relief to the telecom sector. 

Interestingly, Vodafone-Idea share had risen over 40% in the past six trading sessions, ahead of the Cabinet meeting. Shares of industry majors - Jio’s parent Reliance Industries (-0.6%) and Bharti Airtel (-0.3%) - closed on a weak note. 

Ramkrishna Forgings bags export order

The Kolkata-based engineering company has won an export order worth ₹130 crore from a new customer, an original equipment manufacturer in a commonwealth of independent states (CIS) country. As per the deal, the company will receive €5 million (~₹44 crore) per annum for three years. 

In addition to the order announcement, the management expects to deliver strong performance this year on back of upcoming festive season and recovery in commercial vehicles sales in the domestic market. The stock jumped nearly 5% intraday and finished 1.6% higher than yesterday’s closing.   

FMCG sales slump in August

The sales of fast-moving consumer goods dropped by 14.5% month-on-month in August as shops sold off their excess stock. According to a retail intelligence platform, general stores had heavily stocked up FMCG products in June and July to meet the rising consumer demand with subsiding second wave. 

Within the FMCG segment, most categories witnessed a decline in sales, barring packaged food which grew 8%. Meanwhile, the Nifty FMCG Index was flat today, but it gained nearly 10% last month. Industry majors such as Hindustan Unilever (+0.8%), Nestle (-2.3%) and Brittania (-0.6%) showed mixed performance today.

Closing bell

Since the last two days, markets are showing signs of consolidation with the Nifty50 index closing almost flat. Amid this, sectoral rotation seems to be underway with IT stocks witnessing profit booking, and banking stocks seeing renewed interest. So far this week, the Indian markets have shown relative resilience compared to the US and European indices which have shown weakness. Meanwhile, with Friday being a holiday in India, one could expect volatility to rise tomorrow.

Good to know

What is short selling?

Short selling is a strategy through which a trader aims to make a profit out of a fall in the price of a security. In such a strategy, a trader sells first in anticipation of price drop and then buys later at lower prices to make a profit. However, contrary to the expectation if the price starts rising, the trader could suffer a loss. Traders can short sell in shares on intraday basis or can use derivatives to trade intraday or on a positional basis. 

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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.