Market Movers: RIL back to playing Atlas; NALCO gains from Guinea’s distress

MUMBAI: After taking a near-year long sabbatical, Reliance Industries is back to doing what it does best – carrying the entire stock market on its shoulders. It won’t be an overstatement to suggest that Mukesh Ambani’s family loves playing Atlas all the time and taking the Indian stock market to record highs.

At the moment, the RIL’s stock does not have a shred of tiredness in its leg despite running up over 15 per cent in the past five weeks and in the process helping Mukesh Ambani close in on the elusive $100 billion club of billionaires.

The gains are largely driven in anticipation of the launch of the JioPhone Next, dubbed by Ambani himself as the most affordable smartphone that India has ever seen. The phone is being touted as the next big disruptor from the House of Ambani as he looks to further deepen his footprints in every aspect of the life of an Indian consumer.

Add to that the fact that the recent gains in the stock have resulted in close to 1 percentage point improvement in the stock’s weight in the Nifty50 index, which will attract passive funds to match the stock’s weight in their portfolios. A similar virtuous cycle in April-September 2020 had pushed up the stock’s weight in Nifty50 to around 15 per cent.

Someone’s pain is always someone’s gain

The distressing events in Guinea, a West African country, have turned out to be a blessing for Indian state-owned company NALCO.

Shares of the company soared 5.9 per cent during the session as investors anticipated a surge in global alumina prices after Guinea’s Junta took control of the country’s political set-up putting one of the world’s largest Bauxite reserves in trouble.

Guinea accounted for close to 25 per cent of the global bauxite production, a material that is a key ingredient in manufacturing Alumina. As international prices of Alumina firm up in the coming days, it will benefit NALCO’s bottomline as it is the only direct beneficiary of higher Alumina prices in India, at least among the listed entities.

IRCTC glides away

The reopening of the economy and the surge in vaccination rate in India benefits no company as much as IRCTC. The railway ticket seller has seen its fortunes hurt by the pandemic and the various restrictions imposed on inter-state travel.

However, with the majority of the economy now open and higher vaccination rates dimming the prospects of another devastating wave of COVID-19 infections, investors are getting more clarity on the company’s earnings prospects.

No surprise then that that optimism has also started to reflect in the stock’s price after 5.2 per cent surge today.

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