Nifty50: 17,369 ▲ +15 (+0.0%)
Sensex: 58,305 ▲ +54 (+0.0%)
As with nearly the entire week, the markets dilly-dallied all day, and managed to just about close flat. However, the market breadth was positive, with 30 of the Nifty50 stocks posting gains.
Media (+2.9%) and FMCG (+0.7%) were the top gainers among the Nifty sectoral indices, while Realty (-0.7%) and Financial Services (-0.2%) were the weakest today.
| Top gainers | Today's change |
| ONGC | ▲ 2.6% |
| Bharti Airtel | ▲ 2.6% |
| Nestle India | ▲ 2.5% |
| Top losers | Today's change |
| SBI Life | ▼ 3.7% |
| HDFC Life | ▼ 1.0% |
| Titan | ▼ 1.0% |
Here are the top stories of the day.
UCO Bank zooms on removal from PCA
The RBI has removed the Kolkata-based PSU lender from its prompt corrective action (PCA) list on account of improvement in its financial and credit profile. The PCA is an early-intervention mechanism to keep check on the financial health of a bank.
UCO Bank has been in the PCA list since 2017 due to high NPAs and negative return on assets. However, the bank’s profits have increased steadily over the past few quarters. Its profit jumped nearly 400% year-on-year to ₹10.1 crore in Q1FY22. The stock gained over 16% intraday, but later closed about 10% higher than yesterday.
Blue Dart to start trial vaccine delivery by drone
Shares of the express delivery service provider hit their 52-week high after the company announced flagging off the first test drone flight for Telangana Government’s ‘Medicine from the sky’ project’. Through the project, trial deliveries of medicines and vaccines will be conducted in the state using drones. Blue Dart has partnered with drone delivery startup Skye Air for the initiative.
With it, the Telangana’s will be the first state government to conduct beyond line of sight trials of drones. These trials will be conducted from 9–17 September. The stock closed 0.4% higher today, but has gained about 10% so far this month.
Reliance Infra wins arbitration case
As per reports, a two-judge panel of the Supreme Court has upheld an arbitration award from 2017 in favour of Reliance Infra. The stock was locked at its 5% upper circuit today.
As per the company, the award is worth over ₹4,660 crore including interest. It will use the proceeds to repay lenders, after which they are likely to be removed from the category of non-performing-assets.
Closing bell
While the markets bounced back and closed in positive today, on a weekly basis the indices broadly consolidated or remained flat. As we had mentioned earlier, such sideways movement is normal after a strong rally seen in the previous week. As we step into the next week, retail and wholesale inflation numbers are expected on Monday and Tuesday, respectively. The street expects retail inflation to remain steady and wholesale inflation to ease mildly. Meanwhile, as a larger part of the population gets vaccinated and the number of new cases remains under control, unlock-related segments such as multiplexes, hotels and travel services could gather investor interest.
Good to know
What is prompt corrective action?
The Prompt corrective action (PCA) framework has been implemented for banks with weak financial metrics. Under the framework, a bank is categorized as risky if it slips below a certain threshold on these three parameters - profitability, capital ratio and asset quality. If a bank is put under the PCA framework, the Reserve Bank of India can impose certain restrictions on the lender such as branch expansion, credit to risky customers and dividend payout. Usually, a bank is taken out of the PCA framework, after its financial conditions improve.
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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.