Daily Market Update Dec 28

unnamed Daily Market Update Dec 28

India has registered a healthy growth of 3.5% in crude steel production at 9.24 MT in Nov-20 as per data put out by the World Steel Association. World crude steel production was up 6.6% at 158.26 MT for the month, so India grew less than the world average. China recorded a yoy growth of 8% while Germany steel output was up by 14.8% and the US steel output was down -13.7% while Japan was down -5.9%. Most European countries including Italy and Spain recorded higher steel output. China remains the world’s largest steel producer with over 53% market share, followed in second place by India.

Hyderabad could emerge as the hub of COVID vaccine development if you go by the initial trends. Hyderabad alone has 5 vaccine manufacturing firms racing to bring out an antidote. Bharat Biotech, Biological E Ltd and Aurobindo Pharma are at various stages of launching their own vaccines, while Dr Reddy Labs and Hetero Drugs have tie-ups for manufacturing the vaccine. The Hyderabad International Airport has also ramped up its cold-chain infrastructure for vaccine transportation. However, government officials in the Health Department have underlined that their manufacturing primacy will not in any way impact the allocation of the vaccine and that will be decided by the government. IFC has announced loan of $30 million to Biological E Ltd to support low-priced, generic vaccines for COVID-19.

Even as the world enters another year of uncertainty, the price estimates for gold are still in optimistic territory. Consensus estimates peg gold prices at above Rs.63,000 per 10 grams in 2021 as fresh stimulus measures could weaken the US Dollar. In the global markets, the price of gold had touched a life-time peak of $2075/oz before correcting about 15% from the peak level after the election of Joe Biden set the stage for greater certainty globally. Gold is normally inversely related to the US Dollar and with the dollar likely to weaken, gold could benefit. Physical demand for gold has been weak in India and China.

FPIs invested Rs.60,094 crore in the first 24 days of Dec-20 out of which Rs.56,643 crore in equities and Rs.3,451 crore into debt. The data for the latest week was relatively tepid due to year-end concerns. This is very close to the total funds infused in Nov-20 and the last week could see FPIs bettering that figure in Dec-20. The results of the US election resulted in an all-round risk-on trade favouring emerging markets like India. In addition, the promise of sustained accommodative policies by the central banks has also helped keep the liquidity taps flowing. The BREXIT deal came as a sentiment booster for FPIs.

Despite a flat weekly performance by the Nifty, 6 out of the top 10 most valued Indian companies added Rs.60,199 crore in market value during the week. Infosys and TCS emerged the biggest winners. Apart from the two IT giants; Reliance Industries, Hindustan Unilever, Kotak Bank and Bharti Airtel were the other gainers in the top-10. A majority of the financials in the top rung were weak with HDFC Bank, HDFC, ICICI Bank and Bajaj Finance losing value during the week. Currently, RIL and TCS are valued above Rs.10 trillion while Infy, HUVR and HDFC Bank are valued at above Rs.5 trillion in market cap.

As vaccines roll out and scale will be the big change, all eyes will be on India, which really has the capacity to ramp up its manufacturing capacity to that level. India has already shown its mettle in this space keeping the world supplied with HCQ and paracetamol to more than 150 countries across the world. India is once again the centre of attention to manufacture and supply vaccines in huge volumes to tackle the pandemic. India produces 60% of the vaccines in the world so India’s criticality in the success of COVID inoculation is obvious. Even WHO procures 70% of its vaccines from India only. India has the capacity to manufacture billions of doses of vaccines but what is also required is the ability to manage the backward and forward logistics of the vaccine procurement and distribution to the world.

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