Weekly Market Analysis 08-10-2021

Benchmark Indian equity indices had the best week since September 3, as the indices ended higher for the week on strong domestic and global cues. A positive signal was sent by the RBI after the central bank in its monetary policy decision kept key rates unchanged and remained ‘accommodative’. 

The BSE Sensex regained and closed above the psychological 60,000 mark. The Nifty also rose but closed slightly below 17,900 level. For the week, Sensex closed 2.20% higher at 60059.06. The Nifty ended 2.07% higher at 17895.20.

Broader markets also rose as the small cap index and mid cap index ended higher for the week. Nifty Smallcap 100 index closed 3.7% higher on a weekly basis. BSE Smallcap jumped 4%. In the midcap category, Nifty Midcap 50 rose 4% for the week, while BSE Midcap rose 2.43%.

On a weekly basis, top gainer in Nifty were Tata Motors (14.9%), ONGC (10.1%), Titan (9%), IndusInd (6.4%) and Mahindra &Mahindra (6%). Top losers were Cipla (-7%), Grasim Industries (-4.7%), Shree Cements (-4.6%), Nestle India (-2.9%) and Kotak Mahindra Bank (-2.9%).

Among Nifty 500 stocks, Nazara Technologies soared 34.5%. Other top gainers were IRCTC (28.6%), Chambal Fertilizers (27.8), Deepak Nitrate (21%) and Lemon Tree Hotels (20.2%).

Company News

Tata Consultancy Services: The IT services company said on Friday late evening that its net profit for the quarter ended September 2021 rose 28.75% to Rs 9,624 crore compared to Rs 7,475 in the same quarter last year. On a sequential basis, profits rose 6.84% over the first quarter. Revenue from operations was up 16.77% year-on-year to Rs 46,867 crore from Rs 40,135 crore.

Reliance Industries: Shares of the company jumped 5.85% during the week. The company said that Reliance Retail Ventures (RRVL), RIL’s retail arm, and US-based 7-Eleven will open convenient stores in India. The first store will open on Saturday (October 9, 2021) in Andheri East, Mumbai. RIL also became the first Indian company to cross Rs 18 lakh crore in market capitalisation.

Sobha: Shares of the company rose nearly 10% during the week after the realty company said it has registered 49% growth in sales bookings at Rs 1,030.2 crore during the Jul-Sep quarter of this fiscal on better housing demand. Housing sales bookings in volume terms rose to 13.48 lakh square feet in Q2 of this fiscal from 8.91 lakh square feet in the year-ago period.

MCX and IEX: Shares of both the companies soared after the Supreme Court agreed to allow the introduction of new market instruments for electricity trading amid coal shortage crisis. The introduction of new market instruments for electricity trading will be as per the terms mutually agreed between the power regulator Central Electricity Regulatory Commission (CERC) and market regulator Security Exchange Board of India (SEBI). According to the agreement, CERC will regulate all the physical delivery based forward contracts, while the financial derivatives will be regulated by SEBI.

Tata Power and TVS Motor: The two companies signed an MoU to establish electric vehicle charging infrastructure. According to the MoU, Tata Power will deploy solar power technologies at certain locations of TVS Motor. The partnership also aims to create a large dedicated electric two-wheeler charging infrastructure across India to accelerate electric mobility in the country.

Thomas Cook: The company’s shares rose more than 20% during the week after the Indian government said it will start granting fresh tourist visas for foreigners. Other stocks in the tourism and hospitality sector like IRCTC, Lemon Tree Hotels, EIH, Indian Hotels also gained. Foreign tourists coming via chartered flights will be allowed from Oct. 15 while tourists entering India by flights other than chartered aircrafts will be permitted from Nov. 15, the government said in a statement on Thursday.

Economy News

The Reserve Bank of India concluded its three-day Monetary Policy Meeting on October 8. The Monetary Policy Committee (MPC) decided to maintain its status quo and kept the interest rate unchanged . RBI’s six-member Monetary Policy Committee decided to keep the policy repo rate under the liquidity adjustment facility (LAF) at 4%, while the reverse repo rate remained at 3.35%. The marginal standing facility (MSF) rate and the bank rate stood at 4.25%. Out of the six members of MPC, five supported the accommodative stance, while Jayanth Varma voted against the accommodative stance.

The central bank has slashed the inflation estimates for fiscal year 2022 to 5.3% from the 5.7% estimated earlier. RBI also lowered the inflation forecast for the following quarters. They are as follows: Q2FY22 at 5.1% vs 5.9% earlier; Q3FY22 at 4.5% vs 5.3% earlier; Q4FY22 unchanged at 5.8%; Q1FY23 at 5.2% vs 5.1% earlier.

IHS Markit released the services sector Purchasing Managers’ Index data on Tuesday. India’s services sector also expanded in September, similar to manufacturing sector, as lockdown restrictions eased and footfalls increased boosting sales, according to IHS Markit report. The seasonally adjusted India Services Business Activity Index posted 55.2 in September, signalling an increase in output. However, the index was slightly lower than 56.7 registered in August.

Global Markets

The US markets gained for the week as energy-related shares rose after crude oil and natural gas prices advanced. OPEC+ decided not to increase production drastically and stuck to their existing agreement for a gradual increase in oil output. For the week, the Dow jumped 1.22%, the S&P 500 rose 0.79% and the Nasdaq inched up 0.09%.

Markets breathed some relief as worries over debt ceiling waned during the week after Senate Republicans agreed to take up a bill to raise the Treasury’s borrowing limit by $480 billion.

In Asian markets, Nikkei 225 index fell 2.51% and the broader TOPIX index was down 1.23%, as higher oil prices fuelled inflation worries. However, China’s CSI 300 rose 1.31% and Shanghai Composite index was up 0.67% as investors looked beyond China’s property market crisis and the government’s regulatory clampdown. China’s Caixin/Markit services Purchasing Managers’ Index rose to 53.4, compared with 46.7 in August, indicating an expansion in the services market.