Daily Market Highlights SEP 06

5 Daily Market Highlights SEP 06

Previous Day Market Update 

Sensex closed at 58129.95 up  by 277.41 points

Nifty closed at  17323.60 down by 89.45 points

With higher prices and soaring demand, India’s crude steel output for FY22 is expected to touch a record 120 MT. That is nearly 18% higher compared to FY21, when India produced 102 MT of steel. In the Jun-21 quarter, India produced 37.53 MT of crude steel. India targets to reach total steel production of 300 MT by the financial year 2030-31. The national infrastructure pipeline and the capital investments by various sectors is likely to boost demand for steel. The government has been trying to cut steel input imports.

Jindal Steel and Power hopes to conclude the deal to sell 96.42% in its Jindal Power for Rs.7,401 crore by the end of this year. The deal has been slightly controversial with proxy firms red-flagging the deal as the unit is being sold to a promoter-owned company, Worldone. However, the deal is likely to go through as 97% of the shareholders had already approved the deal. Out of the total consideration, while Rs.3,015 crore will be paid in cash, the balance Rs.4,386 crore will be takeover ICD liabilities and obligations of JSPL.

Out of the 10 most valuable companies on the Nifty-50, a total of 9 companies added Rs.293,804 crore in market cap during last week. Infosys was the sole laggard while Reliance was the star. In fact, Reliance added Rs.102,382 crore to cross Rs.15 trillion market during the week. Other gainers included TCS adding Rs.44,833 crore, Bharti Airtel Rs.35,342 crore, Bajaj Finance Rs.33,907 crore HUL Rs.20,712, ICICI Bank Rs.17,374, SBI Rs.17,001 crore and HDFC Bank Rs.14,955 crore. Infosys lost Rs.3,457 crore in last week.

Foreign portfolio investors were overall net buyers in the Indian market to the tune of Rs.16,459 crore in Aug-21. This includes Rs.2,083 crore in equities and Rs.14,376 crore into debt. The bond yield spread has been widening between India and the US and that is attracting a lot of FPI flows into debt. A strong rupee has also helped along the way. However, FPIs continued to be sellers in equities in the secondary market and the situation was redeemed by FPIs infusing more than $1.1 billion into equity IPOs in August 2021.

The stock of Exide Industries scaled a high of Rs.203 after HDFC Life announced plans to acquire 100% of Exide Life Insurance for Rs.6,687 crore in cash and stock. For Exide Industries, their insurance operations gets a much bigger balance sheet. At the same time, Exide Industries gets Rs.726 crore in cash and the balance in shares of HDFC Life. Post the deal, Exide Industries will own nearly 4.3% in HDFC Life. The deal is good for Exide as it can reinvest the cash in its battery business and continue to own insurance franchise.

HDFC AMC has been worried about falling market share and is counting on new product launches to stop the slide in market share. It has launched 4 equity funds in last few months to fill up gaps in its product basket. Navneet Munoth from SBI MF had taken over as the CEO of HDFC AMC after the retirement of Milind Barve. Today SBI MF has clearly emerged as the largest AMC followed by ICICI Prudential AMC. HDFC AMC has seen its market share of the mutual funds business fall by over 200 bps in last one year.

Ashoka Buildcon received a contract worth Rs.1,568 crore for upgrading part of NH-19 in West Bengal. The accepted EPC contract price is was set at Rs.1,568 crore. For the Jun-21 quarter, Ashoka Buildcon had reported a turnaround in net profits to Rs.80.22 crore from a loss in the Jun-20 quarter. Since June this year, Ashoka Buildcon saw execution and toll collections improve sharply with the easing of restrictions. In FY22, Ashoka has bagged orders worth Rs.3,000 crore and has a robust order book of Rs.33,000 crore.

Rich countries are facing pressure to divert COVID vaccines to lower-income countries. According to the latest analysis, the developed world is likely to have 1.2 billion extra doses available by end of 2021. The need of the hour, as per experts, is to divert doses to those in need. While the G7 countries had pledged 1 billion doses, only 15% were actually delivered. The world needs 11 billion vaccines for total inoculation and there is already enough of it. Most rich countries had ordered twice their need, as a back-up measure.

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