Daily Market Highlights AUG 16

5 Daily Market Highlights AUG 16

Previous Day Market Update 

Sensex closed at 55437.29 up by 593.31 points

Nifty closed at 16529.10 up by 164.70 points

For the week ended 13 August, 8 out of the 10 most valuable companies on the Nifty added market value to the tune of Rs.160,400 crore. TCS and RIL contributed the bulk of this rise. During the week, TCS gained Rs.56,133 crore and Reliance added Rs.35,311 crore. TCS is inching closer to RIL in overall valuations. Among others Infosys added Rs.23,522 crore, HDFC Bank Rs.17,371 crore, HDFC Rs. 13,305 crore and HUL Rs.7,671. Bajaj Finance and SBI saw market cap fall by Rs.4,289 crore and Rs.3,838 crore respectively.

Vodafone Idea lost 1.24 crore subscribers in the Jun-21 quarter as COVID 2.0 badly hit its operational and financial performance. Its customer base has now shrunk to 25.54 crore customers. However, most of the loss of customers was in the 2G segment with the 4G segment seeing only modest customer losses. Jio gained the most from Vodafone’s falling market share adding 1.44 crore subscribers in the first quarter. In the last two years, Vodafone Ideas has lost 6.46 crore customers, while Bharti and Jio added 15 crore.

Apart from Reliance, Adani Enterprises, IOC and NTPC are betting big on hydrogen as fuel in the quest to go carbon-free. Hydrogen is the cleanest form of energy and can be produced from resources like natural gas, biomass, and renewable power like solar and wind. Prime Minister Modi just announced the setting up of the National Hydrogen Mission. Apart from the transport sector, hydrogen can be used in chemicals, steel, heating and power. Adani has partnered with Maire Tecnimont for green hydrogen projects in India.

Foreign portfolio investors invested Rs.2,085 crore into equities in August month-to-date. This surely feels much better than the Rs.11,308 crore outflows in July. FPI flows in 2021, now stand at Rs. 51,121 crore. FPI flows were buoyed by improved macroeconomic data like higher exports, growth in IIP and sharply lower retail inflation, which fell 67 bps to 5.59%. Interestingly, these flows come at a time when the Sensex has crossed the 55,000 mark and most FPIs have been sceptical about emerging Asia for some time now.

National Stock Exchange reported that it had seen 50 lakh new investor registrations in FY22 so far, with 8 more months to go. That represents nearly 63% of the new investor registrations of around 80 lakh in the whole of FY21. This was disclosed by Vikram Limaye. In fact, NSE has seen 1.70 crore fresh investor registrations in last two years. In FY21, the average daily turnover on the equity segment was up 70% while the derivatives segment saw 32% growth. There has been a deluge of young investors in equities.

The pandemic and its aftermath may have raised a question mark over India’s plans to become a $5 trillion economy by 2025, according to global academic experts. The view is that India’s economy would still be smaller in 2021 compared to 2019, hinting at about 3 lost years in the growth process. The worrying issue is that de-growth in India has been much deeper and structural compared to other EMs or the developed nations. With India’s GDP at around $2.6 trillion, it may take 7-8 years of normalized growth for $5 trillion.

CMS Info Systems, which is backed by Baring Private Equity, has filed DRHP with SEBI for its proposed Rs.2000 crore IPO. The entire issue will be an offer for sale by Sion Investment holdings, an affiliate of Baring Private Equity. CMS has been PE owned for nearly 13 years. Initially, Blackstone took controlling stake in CMS in 2008, which was later bought over by Baring in 2015. CMS is into ATM, cash management, ATM installation and maintenance services. It had earlier planned to list in 2017, but had later shelved it.

The Tata Steel CEO, T V Narendra, has confirmed that the company was going ahead aggressively with its growth and deleveraging plans. With record profits in the quarter and a turnaround in Tata Steel Europe, the company sees this as the best opportunity to deleverage the balance sheet. Narendran expects the growth to continue as Chinese capacity stagnates but infrastructure demand is likely to boom. He has also clarified that the European operations will stay. He confirmed that Europe was no longer a cash drain.

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