Weekly Market Report 24-09-2021

The two Indian benchmark indices – Sensex and Nifty – witnessed a stupendous rally this week and both the indices gained for the fifth straight week. Sensex crossed another milestone of the 60,000-mark and Nifty was nearer to the 18,000-mark as there were heavy inflows from both Domestic Institutional Investors and Foreign Institutional Investors.

The Sensex closed 1.8% higher at 60,048.5 and Nifty ended 1.5% higher at 17,853.2 on a weekly basis. Top gainers in Nifty on weekly basis were Bajaj Finserv (10%), HCL Technologies (7.5%), ONGC (6.5%), Coal India (6%) and Bajaj Finance (4.9%). Top losers were Tata Steel (-8.2%), BPCL (-4.9%), Tata Consumer (-4.3%), Shree Cements (-3.8%) and JSW Steel (-3.4%).

For the week, DIIs were net buyers at Rs 3048.3 crore and FIIs were net sellers at Rs 8.38 crore. Though FIIs were net sellers on a weekly basis, they were net buyers on four out of five days of the week.

Realty index was the star performer. Nifty Realty closed 21.2%  and BSE Realty ended 21.3%.  Nifty Media index also shot up  led by Zee Entertainment. IT stocks rose, tracking robust results from Accenture, indicating that Indian IT companies are also expected to post good results. Nifty IT rose 4.1%. MindTree jumped 10% and Larsen & Toubro Infotech gained 9%.

Company News

Zee Entertainment shares rose 24.84% in the week after the company announced that it will merge with Sony Pictures Networks India (SPNI). Sony Pictures Entertainment, the parent company of SPNI, is likely to infuse growth capital, so that SPNI has approximately $1.575 billion to use to enhance the merged entity’s digital platforms across technology and content, bid for broadcasting rights in the rapidly growing sports landscape and pursue other growth opportunities. Sony Pictures Entertainment will hold a majority stake in the combined company, according to the company.

In the realty space, Godrej Properties, Oberoi Realty and DLF saw its shares zoom 34.5%, 25.8% and 22.6%, respectively. Godrej Properties said that it had sold Rs 575 crore-worth residential properties in a single day at the launch of the second phase of its project Godrej Woods in Noida. There was overwhelming response from customers to its unique forest-themed phase named Evergreen, taking its total sales in the project to approximately Rs 1,140 crore in the past 6 months, according to the company. This positive development gave a boost to other realty stocks as investors expected the trend to continue ahead of the upcoming festive season.

It is also worth mentioning that both private and public sector banks have decreased housing loan interest rates to  record low in the past couple of weeks. Kotak Mahindra is giving housing loans at 6.5% per annum and SBI’s interest rate is just 6.7% and Bank of Baroda’s rate is 6.75%, subject to terms and conditions. HDFC, the biggest mortgage lender, also reduced its rates to 6.7%. This is likely to lead to a spurt in booking of residential properties. It is also likely to have a rub-off effect on other NBFCs.

As the the reopening of the economy continued, hotel stocks gained some traction. Top Union Home Ministry officials are also mulling over opening up the country for foreign tourists. Some prominent hotel like EIH shares jumped 17.1% on a weekly basis. Indian Hotels soared 20%, Chalet Hotels rose 20.2%.

Steel companies like Tata Steel, JSW Steel and other metal stocks and the metal index were under pressure during the week and it was the biggest laggard due to weakening demand from the construction industry as monsoon sets in and also weighed by less demand from auto companies which are facing semi-conductor issue.

Global Markets

In the US markets, major benchmark indices pared some losses during the week and ended marginally higher. For the week, the Dow gained 0.6%, the S&P 500 rose 0.5%, and the Nasdaq inched up 0.02%.

The widely watched and important event, the Federal Reserve’s monetary policy meeting, concluded on Wednesday. As investors expected, the FOMC members reiterated that they would soon consider tapering and reduce interest rates. 

Fed’s Chair Jerome Powell said the central bank is expected to start the tapering process in November and complete the process by mid 2022. The next FOMC meeting is on November 2 and 3.

In addition, officials also published updated quarterly forecast that showed officials are now evenly split on whether or not it will be appropriate to begin raising the federal funds rate as soon as next year. Most of the officials also expect the rate to be increased three times by 25 basis points.

In Asian markets, China’s Evergrande Group, one of the biggest reals estate companies, is likely to file for bankruptcy as it defaulted on paying interests. It also had an overall negative impact on the markets. It is to be seen if the Chinese government will bailout the company. Hang Seng fell 2.92% and Shanghai Composite index inched down 0.02%. CSI 300 fell 0.13%.

Japanese markets were volatile last week and was closed on two days for holidays. For the week, Nikkei fell 0.82% and Topix was down 0.43%.