Market Wrap Podcast, August 31: All that happened in the markets today

Amid hopes of strengthening economic recovery and firm global cues, investors on Dalal Street lapped up shares with both hands, driving the barometers Sensex and Nifty towards record high levels on Tuesday. Further, Federal Reserve’s indication that tapering was sometime away also kept the market mood buoyant.

Amid this, across the board buying was visible which resulted in Sensex soaring 663 points to 57,552. It scaled a record peak of 57,625 in trade today. Meanwhile, the NSE Nifty surged past the 17,000 mark to close at 17,132, up 201 points. It had touched a new high of 17,154 earlier.

Only three stocks, namely Nestle India, IndusInd Bank and RIL ended in the red in the 30-pack Sensex. Bharti Airtel, Bajaj twins, Asian Paints, Titan and TCS were the top performers, rising between 2-7 per cent. In the 50-pack Nifty, 42 stocks closed higher and eight lower.

The broader too rejoiced but lagged the benchmarks. BSE Midcap index and Smallcap index added over 0.8 per cent each. That said, the market breadth on such a day marginally favoured sellers, which denotes traders flocking to large-caps and taking profits out of mid and small caps.

Sectorally, only the media stocks languished. On the other hand, Nifty Metal surged the most, up 1.5 per cent. Nifty IT and Financial Services followed suit with a gain of over 1 per cent each. The auto stocks too gained ahead of their August sales figures on Wednesday.

In stock-specific action, Airtel shares rallied 7 per cent and were the best-performing stocks on both Sensex and Nifty. The Rs 21,000 crore fundraising along with clarification on Google investment buzz bolstered the stock. The company said it has received interest from high-quality investors and companies for its various businesses and it evaluates various opportunities of potential investor engagement and takes decisions in a judicious manner. It further said that as a matter of policy, Airtel does not comment on media speculation/ report(s). Following this, the stock had hit a new high of Rs 668 and ended at Rs 664.

Shares of HCL Tech also surged to a fresh record level of Rs 1193.15 in trade today after the company announced an investment of $1.25 million in Series A preferred shares of Austin GIS Inc., a Delaware-based entity. It finally settled at Rs 1181, up nearly 2 per cent. The stock has rallied 16 per cent in this month.

Shares of SRF also scaled a fresh peak of Rs 10354 in trade today following the announcement of bonus issue in the ratio of 4:1, meaning the company will give free four shares for every one that is held. The scrip closed 4 per cent higher at Rs 10141.

Gujarat Fluorochemicals climbed 2 per cent to Rs 1732 after CRISIL Ratings reaffirmed its rating to the company.

In other news, oil is headed for the biggest monthly loss since October as investors weighed the prospect of additional OPEC+ production and the restoration of crude output in the US after Hurricane Ida. The Organization of Petroleum Exporting Countries and its allies will meet on Wednesday to assess the global market and prospects for demand as the pandemic grinds on. With expectations the hit to consumption from the delta variant will fade, they are on course to restore another 400,000 barrels a day, a Bloomberg report said.

Now, going into trade on Wednesday, the Street will react to the Q1 GDP print that will be released later today. Any disappointment on that front can spark a selloff on Street, especially with indices rallying, confident of an ongoing economic recovery. That said, the auto stocks will be on investors’ radar as August sales data will start to trickle in. According to Emkay Global, auto sales for August are likely to see positive momentum for commercial vehicles and 2-wheelers on a sequential basis. Volumes for passenger vehicles may see a hit, whereas tractors may see a mixed performance in the domestic market. Further, stock-specific flow, oil price moves amid Opec+ meet and global will also sway market sentiments.

The IPO market will also be back in action with the start of the new month as two new IPOs – Vijaya Diagnostic and Ami Organics will open for subscription. Analysts have nuetral to avoid ratings on Rs 1,895 crore IPO by Vijaya Diagnostics as they believe issue seems to be fully priced at Rs 531 per share. Meanwhile, they are mixed on Ami Organics, with ratings ranging from Neutral to Subscribe. Valuations and limited near-term growth prospects are among the key concerns for analysts although its key market position and lower debt levels seem lucrative. The company looks to raise Rs 570 crore.

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