Today’s Market Summarised
Nifty opened the day with a gap-down at 14,996 and tried to move up. But after touching a day-high in the early part of the day, it moved down and consolidated. Nifty moved sideways and fell 170 points after European markets opened at 1:30 pm. 14,950 acted as good support and the index closed just below it at 14,933, down 142 points or 0.95%.
Bank Nifty too opened with a gap-down at 35,222 and consolidated. It traded sideways and even broke 35,000 in the day. But the index of banks moved up after this fall, and closed at 35,228, down 574 points or 1.6%.
Every sectoral indices in NSE closed in the red today. Nifty PSU Banks(down nearly 4%) and Nifty Metal(down 2.7%) were the top losers.
All Asian and European markets are in the red today, with fear of higher bond yields again killing global markets.
News Picks
As crude oil prices once again increased, shares of ONGC and GAIL featured among the top-gainers in Nifty 50. Global crude oil prices are at a 14-month high.
Metal stocks fell sharply after going up last week. Arcelor Mittal owned by Billionare Lakshmi Mittal has revived plans for entering the Indian market with a Rs 50,000 crore investment with Odisha for steel plant.
Wipro fell more than 4% after the company’s deal for acquiring Capco was not well received by the market. It was a deal worth more than Rs 10,000 crore. For the first 2 years, profit and margin will be affected because of the acquisition.
Kotak Bank was the only gainer in Bank Nifty today going up more than 1.3%. We had discussed about how the bank has signed a deal to handle the salary accounts of Indian Army personnel.
Tata Motors shares fell 2.67% as Jaguar-Land Rover sales fell in the UK yesterday.
Gold prices hit a 9-month low today, down 11% in just 2021. Share prices of gold loan companies Muthoot and Manappuram Finance were down 1.89% and 4.22% respectively.
India VIX was up 6% today, after being up 10% yesterday.
Shares of Heranba listed at Rs 900 against IPO price of Rs 627. Closed at Rs 825 for the day. Today is the last date to apply for MTar IPO.
ICICI General Insurance shares gained more than 1% as the company announced a Rs 4/share interim dividend.
Markets Ahead
We had talked about how gold prices were falling yesterday. Today it reflected in prices of gold loan companies fell as investors get scared of high level of defaults. Imagine if you took a loan for Rs 50,000 by keeping Rs 60,000 worth of gold as collateral. If that gold is worth only Rs 40,000 today, won’t you not repay that loan? This is why investors of Manappuram and Muthoot are scared. Banks too face such a problem but they are not heavily dependent on gold prices. For example, 90% of Muthoot Finance’s assets are in gold loans.
Crude oil prices falling earlier were because of expectations that The Organization of the Petroleum Exporting Countries(OPEC) would increase outputs. But OPEC made the unexpected decision to NOT increase production, even asking New Delhi to ‘use the cheap oil bought last year’. So you and I may not see petrol prices falling anytime soon.
Anyway, another week has come to an end. Hope everyone has the perspective of this week’s returns made from market this week. If not, you can try out Tradebook in the marketfeed app.
Rising bond yields are yet to cool down, and once it does, markets may stabilise. Last Friday, Nifty had witnessed a great fall. Hoping that in the coming days, we can see slight pullbacks. Also, Nifty Smallcap gained 4% this week while Nifty Midcap gained 3.5%. Consolidation in Nifty, but broader markets performed well.
Looking forward to an even better next week. Have a cup of tea and enjoy the weekend, but don’t forget to also open some charts and mark some good opportunities.
Catch you all on The Stock Market Show tonight!