Weekly Market Analysis: Sensex, Nifty fall; Paytm, Sapphire, Nykaa, Coal India in focus

Benchmark Indian indices closed lower during a volatile week as inflation worries weighed on investors’ sentiments. The Sensex closed 1.73% lower at 59636.01 and Nifty ended 1.87% down at 17764.80.

Foreign Institutional Investors sold for Rs 4411 crore and Domestic Institutional Investors bought for Rs 3926.6 crore.

Top losers for the week among Nifty sectoral indices were Metal (-4.5%), PSU Bank (-3.5%), Commodities (-2.9%), Media (-2.3%), Pharma (-1.7%). Top gainers were IT (1.2%), FMCG (0.8%) and Auto (0.5%).

In Nifty 50 index, the following stocks gained: Maruti Suzuki (8.9%), Power Grid (5.7%), Asian Paints (5.3%), ITC (3.3%) and Tech Mahindra (3%). The following stocks were laggards: Tata Steel (-8.7%), Coal India (-8.1%), Shree Cements (-6.4%), Bajaj Auto (-5.4%) and BPCL (-4.7%).

Company News

Reliance Industries Ltd: The largest private sector company by market capitalisation in India said that it has withdrawn its application submitted to the National Company Law Tribunal (NCLT) for segregating its oil-to-chemicals (O2C) business. In a statement, the company said that due to the evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business.

One 97 Communications (Paytm): The company which had the biggest IPO in Indian stock market history had a drubbing on its stock market debut as its shares crashed 27.40% to close at Rs 1560.80, from its issue price of Rs 2150. Research firm Macquire initiated coverage on Paytm with an underperform rating and reduced target price of Rs 1200 per share.

Sapphire Foods: The quick service restaurant company made a positive stock market debut as its shares listed at Rs 1,350, a 14% premium to issue price of Rs 1,180 per share. The company hit a high of Rs 1380.05. However, it lost earlier gains and closed at Rs 1211.55.

Nykaa: The company reported a consolidated net profit of Rs 1.2 crore in Q2FY22 from Rs 27 crore in the year-ago period. Revenue from operations stood at Rs 885.3 crore in Q2FY22, up 47% from Rs 603.8 crore in Q2FY21. Marketing support revenue grew by 68% year-on-year.

Coal India: Shares of the company fell 8.14% on a weekly basis after the company reported tepid results. The company reported nearly a flat consolidated net profit in the second quarter of FY22 at Rs 2936.91 crore, as against Rs 2948.12 crore in the year-ago period. Its consolidated revenue rose to 23,291.08 crore, from Rs 21,153.07 crore in the year-ago period.

Economy News

India’s inflation based on wholesale price index (WPI) jumped to 12.54% in October 2021, as against 1.31% in the year-ago period.

In addition, the country’s Index of Industrial Production (IIP) for the month of September rose by 3.1%, from 1% in the same period last year, according to the data released by statistics agency. IIP surged 11.9% in the month of August.

India’s merchandise exports in October 2021 rose 43.05% to $35.65 billion, from $24.92 billion in October 2020. Imports stood at $55.37 billion, up 62.51% in dollar terms over the same period previous year.

Trade deficit stood at $19.73 billion in October 2021, compared to a deficit of $9.15 billion in October 2020.

Global Markets

In the US markets, major indices closed mixed for the week as investors evaluated strong economic data and robust quarterly results against inflation concerns and continued supply constraints. On Tuesday, the Commerce Department reported that retail sales jumped 1.7% in October as against 0.8% in the previous month of 2021. Industrial production in October rose 1.6% as against a fall of 1.3% in the previous month. For the week, the Dow dropped 1.38%, the S&P 500 rose 0.32% and the Nasdaq jumped 1.24%.

In the Asian markets, Japan’s major indices rose marginally as the government announced a massive economic stimulus of $490 billion to revive the ailing economy. For the week, Nikkei 225 closed 0.46% higher and Topix rose 0.19%.

China’s markets ended mixed for the week as the CSI 300 index closed flat as it rose just 0.03% on a weekly basis and the Shanghai Composite index edged up 0.6%. Alibaba shares fell more than 10% after the tech company missed both revenue ans earnings expectations. In addition, realty firms struggled to raise funds amid a slowdown in China’s economy.