Daily Market Update – Feb 8th 2021

unnamed Daily Market Update   Feb 8th 2021

The Expert group rejected the Pfizer Vaccine for emergency approval in India as it did not meet the basic condition of conducting adequate tests on a sample of Indian users. Pfizer has also agreed to conduct the necessary tests and then reapply for approval. However, there are two additional constraints to the Pfizer vaccine in India. Firstly, Indian government is not confident of Pfizer being able to supply to India in bulk as they do not have a dedicated Indian manufacturer. Secondly, this vaccine needs refrigeration at temperatures of -70 degrees Celsius, which is normally not available commercially in India.

Mutual funds have withdrawn a total of Rs.12,980 from the Indian equity market in the month of Jan-21. This comes on top of Rs.56,400 crore worth of equity selling by the Indian mutual funds in the full year 2020. Even as equity fund flows have tapered to net redemptions since July 2020, Indian mutual funds have also been using higher levels provided by the rally to book profits and monetize the rally, partially if not totally. However, the markets have rallied despite the MF selling as foreign portfolio investors infused a sum of Rs.175,000 crore during the full year 2020. After a brief lull in the last week of January, the FPI buying has resumed in February. However, what is positive is that SIPs continued to see consistent inflows into equity funds and ELSS and that could turn around flows at lower valuations.

A total of 34 defence and aerospace companies are expected to invest a sum of Rs.2500 crore in the state of Karnataka. This investment will be a boost for the aviation sector and will create over 6400 direct jobs in the state. Among the big investors in the state, Abhyuday Bharat Defence is expected to invest Rs.1000 crore,  between them. Bengaluru is already a defence hub with several companies like HAGopalan Aerospace Rs.438 crore while Alpha Design Technology and TESBL Aerospace Corp will invest Rs.500 croreL, BEL, BEML, DRDO, ADE and ISRO already present to create the right ecosystem.

Foreign portfolio invested a sum of Rs.12,266 crore in the Indian markets during the first week of February of which Rs.10,793 crore went into equities and Rs.1473 crore went into debt. The equity flows almost neutralize the outflows in the last week of January and were largely driven by the positive cues in the Union Budget. Some of the bold and reformist moves like a higher fiscal deficit, setting up of a Bad Bank, transparency in showing food subsidies in the budget, thrust to privatization and monetization of state assets were all seen as positive for the markets. RBI has also supported with its monetary stance.

When Bank Nifty rallies 16% against Nifty rally of 9.5% in the week, you can be sure that the weekly rally was dominated by the banks. All the top 10 companies by market cap added value in the week to the tune of Rs.513,533 crore. HDFC Bank was the biggest gainer adding Rs.113,517 crore during the week. It was followed by SBI which added Rs.99,064 crore. Among the other big gainers, HDFC added Rs.61,837 crore, ICICI Bank added Rs.53,607 crore, Kotak Bank Rs.53,396 crore, Reliance Industries added 51,254 crore and Bajaj Finance added Rs.48,376 crore. There were no major value losers during the week.

Zee Entertainment reported 14.6% higher net profit of Rs.400 crore for the Dec-20 quarter. What was more interesting was that the revenues were up nearly 30% at Rs.2757 crore in the quarter; largely driven by a sharp bounce in advertisement revenues, even as subscription revenues continued to remain stable to buoyant. Ad revenues took a big hit post COVID. While the ad revenues grew about 7.5% on a yoy basis, the real growth was seen in sequential numbers when COVID impact was the most visible. Total revenues included a sum of around Rs.600 crore from a content syndication deal. Zee has had a tough last two years as it had to face an unprecedented group payment crisis to mutual funds and later COVID took a toll on operations. The future potential assessment of COVID losses is negligible.

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