Today’s Market Summarised
- Nifty had a gap-up opening today. Trading for the day started with the index at 11,331 and we saw strong resistances form above 11,350. Soon, the index brokedown but recovered after taking a support at 11,270 level. Nifty closed the day just above 11,300, down by 0.07%.
- It was another mild day for the general Nifty 50 index. But, sectoral indices Nifty Media ( up 1.38%), Nifty Auto (up 1.22%) and Nifty Metal (up 1.10%) outperformed the market. Nifty Pharma (-0.97%) underperformed the market with SunPharma being the top loser in Nifty 50.
- Asian markets closed mixed. The fall in Indian markets can be loosely tied to the European markets opening and trading in red at around noon.
News Picks
- People’s favourite, Tata Motors, emerged as the top gainer in Nifty 50 closing with a price of Rs 131.10, up 4.59%. The stock was one of the major reasons for Nifty Auto outperforming the market. The company has been showcasing amazing growth numbers and innovative products to its customers for a while now, and sales numbers are showing the results. Auto stocks have been struggling recently, as the nation’s economy is struggling to get back on its feet. Hopefully we will see even more safe and stylish products from the automaker in the future.
- Shares of Affle India rose 1.70% to Rs 2,150, as the company announced it was acquiring 8 percent stake in Talent Unlimited Online Services Pvt Ltd (Bobble AI), India for a total cash consideration of Rs 19.8 crore.
- Tata Power closed the day at Rs 55.95, up 5.67%. Last day, the energy sector major had announced a 10.2% rise in net profits for Q1 2021.
- Ashok Leyland closed the trading at Rs 61.75, with an amazing jump of 14.46% for the stock. The company had earlier announced a Rs 388 crore net loss for Q1 2020.
- Shares of Aurobindo Pharma fell to Rs 881.60, down 5.63% for the day. The company had announced a net profit for Q1FY21 as profit figures rose 22.8% YoY to Rs 780.7 crore
- Shares of Bharat Forge flew past all expectation points for the day, closing at Rs 502.95, up 15.67%. The company had posted a 50% fall in profits YoY for Q1 2020, but its businesses had shown signs of quick recovery.
Markets Ahead
Nifty is very indecisive on moving above 11,350 for the week. We may see a major rally in the index if market heavy-weights HDFC, HDFC Bank and Reliance Industries give huge moves.
Continuing our discussions regarding gold prices in this column, the continual fall is a cause of worry for Indian banks. Earlier this month, the Reserve Bank of India (RBI) raised the loan-to-value (LTV) limit for loans against gold jewelry to 90% from 75%. The fall in prices of the collateral asset, will create a lot of problems for the banking industry. When the underlying asset loses value, bad loans may rise as loan availers feel it’s more economical to not pay interest and let the banks have the collateral. Also, this would mean RBI’s current policy is not a viable solution to India’s problem of lower household incomes. So what is next?