4th March, 2021

Untitled 5 4th March, 2021

 

Previous Day’s Market Update

Nifty  closed at 15245 up by 326.5 points

Sensex closed at 51444.65 up by 1147.46 points

India’s home grown COVID vaccine, COVAXIN, of Bharat Biotech showed interim vaccine efficacy of 81% in late-stage clinical trials. This is better than the guidance of 60% given by the company last year. In the largest trial conducted in India, more than 25,800 participants were involved. This included 2433 people over 60 year and 4500 with comorbidities. Based on the tests, COVAXIN had demonstrated high clinical efficacy trend against COVID-19 as well as immunogenicity against variants. Participants received vaccine or placebo in 1:1 ratio, showing vaccine candidate was well tolerated. COVAXIN was approve in Jan-21.

Equity markets have created wealth to the tune of Rs.941,000 crore in the last 3 days and the rally on Wednesday was led by Reliance, financials and metal companies. On Wednesday, Sensex advanced 1148 points to 51,445 while Nifty climbed 327 points to 15,246. Both indices have successfully scaled back above their critical support levels. Indian markets also largely echoed the global sentiments. Reliance surged over 4.5% on getting the largest chunk of the spectrum on offer. Even as auto stocks stayed under pressure, the VIX tapered further to 22 levels. A total of 342 stocks on the BSE hit new highs on Wednesday. Tata Steel was the biggest percentage gainer followed by Bajaj FinServ, RIL, Bajaj Finance, UPL and Hindalco. Hero Moto was among the losers followed by Maruti, Bajaj Auto, M&M and BPCL.

India’s largest mortgage lender HDFC will raise Rs.5,000 crore via the issue of non-convertible debentures or NCDs on a private placement basis to qualified institutional buyers. HDFC paper normally has strong demand in the market. The issue is expected to remain open on 05-March. The issue will have a base size of Rs.2000 crore with a green-shoe option of Rs.3,000 crore. HDFC needs a continuous flow funds into its war chest to augment long-term resources. The funds will be deployed for financing and refinancing activities in the home loans segment. Bonds will mature in Mar-23 and carry annual coupon of 5.30%.

Steel exports could remain low in Mar-21 due to strong domestic demand and robust realisations in India. As per India Ratings, finished steel exports in Jan-21 was 6% lower sequentially at 0.58 MT 16% lower yoy. Steel producers are focused more on domestic sales. This is in contrast to the pandemic scenario when export volumes had grown 23% at 8.84 MT. Meanwhile, the reduction in import duties to 7.5% on all semi and finished-alloy and non-alloy steel products will have a stabilising impact on domestic supplies. India Ratings pointed out that domestic HRC are still 40% higher yoy. India’s crude steel output stood at 10 MT.

NCLT upheld the Doha Bank petition resulting in 100% recovery for financial creditors of Reliance Infratel to Rs.3515 crore. Doha Bank, had filed an application against RCOM Corporate Guarantee Holders seeking priority payment for financial creditors from the proceeds of its resolution plan. Reliance Jio had acquired the assets of Reliance Infratel under NCLT resolution. Doha Bank had contended that direct lenders to Reliance Infratel had first rights over proceeds of the resolution plan over corporate guarantee holders. Now NCLT has upheld the Doha Bank plea. The plan allows distribution of Rs 4,400 crore to the lenders.

India’s services activity or the PMI – Services expanded at the best rate during Feb-21 even as job create continued to trend lower. PMI Services figure surged from 52.8 in Jan-21 to 55.3 in Feb-21. While a figure above 50 is expansionary, this surge reflects positive momentum too. February marks the 5th consecutive month the PMI Services has been above 50 levels. While domestic demand led to a surge in new work intake, global travel restrictions curbed global demand for services and that stayed under pressure. Hence, new export orders fell for the 12th month in succession. Combining the manufacturing and services PMI, the composite PMI for Feb-21 came in at 57.3 in Feb-21 compared to 55.8 in Jan-21. However, the Markit report also noted that despite growth new business, service sector employment fell further in Feb-21.

World Market Update

Untitled 2 4th March, 2021

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