Daily Market Highlights May 10

Untitled 5 Daily Market Highlights May 10

Previous Day Market

Sensex closed at 49,206.47 up by 256.71 points

Nifty closed at 14,823.15 up by 98.35 points

During the week ended 07 May, a total of 8 out of the 10 most valuable companies in the Nifty added Rs.81,251 crore in market cap. Apart from Reliance Industries and Infosys; all other high-value stocks gained in the week. Among the big gainers, TCS added Rs.34,623 crore in market cap, HUL Rs.13,898 crore, and HDFC Rs.13,728 crore. Among other key gainers, Kotak Bank added Rs.6,213 crore, ICICI Bank Rs.4,429, and SBI Rs.4,239 crore. Among losers, Reliance Industries lost Rs.40,034 crore while Infy lost Rs.639 crore.

Indian mutual funds were net buyers in the equity markets for the second month in succession with net buying of Rs.5,526 crore in the month of Apr-21. FPIs sold heavily in Apr-21. The market correction did give some confidence to mutual funds to bet on equities as an asset class. In addition, 3 robust quarters of results have made valuations look a lot more attractive. Softening bond yields are also driving investors to equity investing. In Apr-21, MFs infused Rs.5,526 crore on top of Rs.4,773 crore invested in March 2021.

Avenue Supermarts, the owner of the D-Mart retail brand, reported a 52.76% jump in net profit at Rs.414 crore for the Mar-21 quarter on a consolidated basis. The total consolidated revenues for the Mar-21 quarter stood 18.5% higher at Rs.7,412 crore. EBITDA margin expanded 160 bps to 8.3% while the PAT margins expanded 120 bps at 5.5%. The next quarter could see some pressure due to more stringent norms for retail operations. D-Mart admitted that higher inventory levels may be a risk due to optimism.

IDFC First Bank net profits were up 78% at Rs.128 crore in the Mar-21 quarter. The total income for the quarter was also higher by 5.6% at Rs.4,834 crore. Gross NPAs showed a rising trend increasing from 1.83% to 4.15% on a sequential basis. Provisions for loan losses in the quarter were higher at Rs.603 crore. For FY21, IDFC Bank posted net profits of Rs.452 crore; a turnaround from a net loss of Rs.2,864 crore in FY20. If we include the Rs.3,000 crore QIP money raised on 06 April, the capital adequacy stands at 16.32%.

India and the EU agreed to resume talks for a more comprehensive and mutually beneficial trade deal. In addition, the EU is also keen to launch negotiations for an investment protection pact. This decision was taken after the virtual summit that the PM had with the heads of state of the 27 member states of the European Union. The EU remains a strategically important and powerful grouping for India. India’s total trade with the EU is $116 billion annually, more than the trade India does with the US as well as China in one year.

Copper is having a rally of a lifetime with the metal beating the previous 2011 high and scaling a lifetime record high. Previously, copper had topped out in 2011 and the up-cycle was then led by Chinese demand. This time around, the expectation is that the demand could come from the US, EU, and China and could be driven by a surge in demand, especially from auto companies. Electric cars use 4-times more copper than regular cars. On the supply side, copper capacity is very expensive and takes a fairly long time to market.

Maruti Suzuki, India’s largest car manufacturer, has declared an extended shutdown of its plants due to the surging cases of COVID in India. According to Maruti, the maintenance shutdown of plants had been extended till May 16. The plant maintenance shutdown is scheduled annually around June. However, this time around, the plant maintenance shutdown was pulled back to May to coincide with the COVID-related lockdown. Its plants in Gurgaon, Manesar, and Gujarat will continue only skeletal activities.

HDFC proposes to sell a 0.62% stake in HDFC Ergo, the general insurance franchise of HDFC. The sale will be made to its foreign JV partner for consideration of Rs.236 crore to abide by regulatory norms since HDFC must reduce its stake in the JV to below 50%. HDFC has signed a deal to sell 44.12 lakh equity shares of HDFC Ergo for Rs.236 crore. This sale will represent 0.62% of the paid-up capital of HDFC Ergo. For FY21, HDFC Ergo reported a total income of Rs.7,558 crore; or 5.43% of the consolidated income of the HDFC group.

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