Showtime for multiplexes

Nifty50: 17,855 ▲+1 (+0.01%)
Sensex: 60,077 ▲+29 (+0.04%)

After a strong opening, the markets witnessed profit booking and closed flat. The market breadth was evenly split with 25 stocks posting gains. 

Among the Nifty sectoral indices, Auto (+3.2) and Realty (+2.9%) were the top gainers. Whereas, IT (-2.8%) and Pharma (-0.9%) were top losers.  

For more updates on F&O, click here.

Here are the top stories of the day.

Multiplexes to reopen in Maharashtra

Maharashtra, the biggest market for the theatre industry in India, has allowed the opening of multiplexes and single screen cinemas from 22 October ‘21. The state reportedly contributes around 25% to 30% of box office collections from Hindi content while the number goes up to 40% for English content. 

Experts believe this is an affirmative step for the revival of cinemas with the big Hindi films planning a theatrical release this festive season, which is just around the corner. Following the development, the shares of PVR (+5.3%) and Inox Leisure (+7.0%) were up sharply. 

Hotel stocks surge on revival hopes

Shares of domestic hotels surged over the expectation of a revival in the business due to pent up travel demand and ease of restriction on the movement. This also comes at a time when luxury chains like Indian Hotels are raising money to expand their capacity.

Analysts believe that the hotel industry is well-positioned to benefit from the holidays during the upcoming festive season. Shares of Indian Hotels (+5.7%), Chalet Hotels (11%) and EIH (19.8%) made strong gains today.  

Top developers bet on office properties 

Top property developers are betting big on commercial properties with an eye on demand revival expected next year. The growth and hiring in IT, BFSI, and health sciences sectors has fueled the expansion of their real estate footprints. 

As per property consultants, the supply for commercial properties will be 33 mn sqft. to 38 mn sqft. between 2021 to 2023. Top developers such as Prestige Estates (+9.3%) and DLF (+2.1%) are looking to add 40 mn sqft. and 11.4 mn sqft. respectively across major cities like Bengaluru, Chennai and Noida.

Closing bell

The markets played a balancing act today. In the Nifty50 pack, an equal number of stocks rose and fell. Similarly, while IT and pharma stocks dragged the index down, auto, realty and banking stocks pulled it up leading to a flat close. Amid this, traders must draw their attention to three things. First is a jump in the India Vix, indicating an expected rise in volatility ahead. Second is the sharp run-up in the US 10-year Treasury yields. And finally, an upward bias in the US dollar index. Typically, a rise in any or all of these could build pressure on the equity markets. 

Good to know

What are variable and fixed costs? 

A variable cost is an expense that rises with an increase in the operations of a company. For instance, the cost of the raw material will rise in proportion with the increase in production. Whereas, a fixed cost is in contrast to the variable cost and doesn’t fluctuate along with a change in the production. It remains fixed for a specific period. For example, the cost of renting a property won’t change even if the company’s sales rise in a particular period.  An investor must keep an eye on these costs as they have an impact on the profits of a company. 

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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.