Daily Market Update MAR 8

Untitled 5 Daily Market Update MAR 8

Previous Day Market

Sensex closed at 49,661.76 up by 460.37 points

Nifty closed at 14,819.05 up by 135.55 points

RBI held repo rates at 4% and also maintained the accommodative stance of monetary policy. While the RBI did warn about inflation risks, the full year inflation estimate for FY22 was cut from 5.2% to 5.0%. The GDP contraction for FY21 was pegged at -8% while GDP growth in FY22 has been maintained at 10.5%. The biggest trigger for the market rally on 07 April was the RBI decision to have an open market operations calendar to give periodic support to the bond secondary markets. Ten year bond yields fell to 6.07%.

NCLT admitted an insolvency plea against a unit of Oyo Rooms by a creditor who claimed payment default of Rs.16 lakh. Oyo has already filed a counterplea with the NCLAT. Oyo confirmed that it had already paid the amount under protest, even as it had appealed to NCLAT. The unit of Oyo Rooms has been given time till 15 April to file their response. Oyo, like most other hospitality companies, was hit hard by the pandemic and the lockdown. The founder claimed that gross margins were already back to the pre-COVID levels.

Bharti tied up with Dixon Technologies to jointly apply for production-linked incentives (PLI) to make telecom and networking products. The JV will manufacture modems, routers, set-top boxes and IOT devices for telecom sector, including Airtel. The JV will be 74% owned by Dixon and 26% owned by Bharti Enterprises. Dixon has emerged as a star outsourcer with deep expertise in telecom. The government has been aggressive about PLI, just approving Rs.6,238 crore outlay for Air Conditioners and LED Lights.

Barbeque Nation listed weak but closed at 20% upper circuit at Rs.590 on the BSE. The IPO had opened at Rs.492, against its issue price of Rs.500. While the subscription response had been encouraging at 13X for retail investors, it was nothing close to many of the previous IPOs. Barbeque Nation will use the IPO funds to expand its footprint across India and also to substantially cut down on debt. CX Partners and Alchemy were among the early investors in Barbeque Nation. The company is loss-making for last few years.

Steel companies increased prices by up to Rs.5,000 per tonne starting Apr-21 iron ore prices were hiked by Rs.500 per tonne. While hot-rolled coils used in automobiles and appliances increased by Rs.4500-5000 per tonne, the prices of long steel used in construction and infrastructure was hiked by Rs.3000 per tonne. The increase in steel prices is led by a surge in global demand and prices. Indian hot-rolled prices are still lower by Rs.11,000 per tonne. Domestic demand and cues from China could drive steel higher.

As steel stocks shine, graphite electrode makers like Graphite India and HEG are back in the thick of action. Both stocks have rallied sharply on the back of pick-up in steel production globally, which is expected to drive demand for electrodes. Both HEG and Graphite hit 52-week highs this week. In the last 3 months, both these stocks have doubled in price. Steel demand in the coming months is likely to be driven by a sharp positive turnaround in steel consuming industries like construction and automobiles.

Shilpa Medicare stock jumped 10% after management of the company confirmed it had the capacity to manufacture up to 100-200 million doses of COVID vaccines. However, Shilpa did not confirm if it would be manufacturing AstraZeneca vaccine or Sputnik-V vaccine. Both are based on recombinant technology combining DNA from a virus with bacterial cells to produce purified proteins for use in a vaccine. Shilpa manufactures active pharma ingredients (APIs), and can manufacture vaccines at its Dharwad facility.

Investment platform Groww has raised $83 million Series-D funding. The fund was led by Tiger Global at a valuation of over $1 billion; making Groww a Unicorn. Additionally, Sequoia, Ribbit Capital and Propel Venture Partners also participated. Groww becomes the second Fintech start-up to become a Unicorn after Cred. Groww will use these funds to hire fresh engineering talent and invest in education initiatives for first-time investors. Groww enables investments in stocks, MFs, ETFs, digital gold and IPOs

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%name Daily Market Update MAR 8

 

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