Morning Update for 16 July 2021

Indices at previous closing

Nifty50: 15,924 ▲+70 (+0.4%)
Sensex: 53,158 ▲+254 (+0.4%)
Nifty Bank: 35,907 ▲+239 (0.6%)

In the news

RBI estimates strong Q1 growth

• Indian central bank has said that the economy may have grown by 22.1% in the June quarter as the second wave ebbed and the vaccination drive picked pace. However, the RBI has also warned that a solid increase in aggregate demand is yet to take shape.
• Further, the RBI expects inflation to ease as the supply side measures take effect. It has also cited a study which predicts that in an optimistic scenario, the third wave could just be a ripple and normalcy will return by August. Overall, it seems that this optimism is getting factored in the markets, which closed at record highs today.        

Bandhan Bank’s loans, deposits fall in Q1

• The Kolkata-based private lender’s loans fell by 8% to ₹80,128 crore and deposits shrunk by 1% to ₹77,336 crore in the June quarter on a sequential basis. However, loans and deposits rose by 8% and 28%, respectively, year-on-year as per the company’s exchange filing.
• Its CASA ratio deteriorated to 37% from 43% as on 31 March 2021. The stock closed 0.6% higher today but has fallen 3% so far this month.

Sugar exports could hit record high

• India is expected to export 7 million tonnes of sugar this year, a record high as per the Indian Sugar Mills Association. This is expected to have a direct impact on the closing inventory of sugar, estimated to be at its 4-year lows. A low inventory coupled with healthy demand could keep domestic sugar prices buoyant. 
• Further, it is also expected that a significantly higher amount of sugar would be diverted for ethanol production in the next year. This has twin benefits for sugar companies. First, it reduces dependency on sugar, and second, ethanol sales give immediate cash flows compared to sugar, which has a longer cash flow cycle. While most sugar company stocks closed lower yesterday, they have delivered strong gains of over 100% in 2021. 

Sectoral indices (July 15)

Global markets (at 8:00 am)

Fact of the day 

Invented in 1983, the first mobile phone was the Motorola DynaTAC 8000X, which could store only 30 contacts and weighed 1.1kg. Guess its price? $3,995! 

Source: Medium

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