Market weekly: Nifty notches up another high as robust macro data, global cues boost sentiments

The Nifty started off the week with decent gains on Monday, buoyed by strong global cues. Global investors cheered a stronger-than-expected jobs report and robust macro data in the US, which overpowered concerns around spread of Delta variant. The index continued its rise on Tuesday, clocking a fresh record high of 16,359.25 intra-day. 

However, the index turned volatile, and settled with minor gains, as worries around the impact of Covid-19 weighed. The BSE’s latest circular dealing with additional surveillance measures and circuit filters also dampened the sentiments. The index ended largely flat on Wednesday. The BSE clarified that the latest rules will only be applicable for securities with mcap less than Rs 1,000 crore, putting an end to speculation that certain midcaps will be impacted. 

The Sensex settled at record high closing by crossing 54,800-mark and Nifty closed at 16,364 levels with Power Grid, Titan and L&T boosting the indices. Upbeat global markets and supportive domestic cues lent aided gains in the headline indices. On the final day of the week, the market ended with solid gains with the Nifty closing  above 16500 level. Investors' sentiment improved after India’s retail inflation fell below the RBI’s threshold of 6% in July-21. For the week, Nifty ended 1.8% higher. 

Top gainers and losers

• Nifty Pharma and PSU Bank declined the most, down 3.23% and 2.24% after PSU bank being the highest gainer last week.
• Nifty IT gained the most amongst major indices, Up 4.39%, led by Tech Mahindra,TCS and HCL Tech.
• Tech Mahindra, TCS, Bharti Airtel, HCL Tech, Power Grid were top Nifty gainers
• Eicher Motors, Shree Cement, DRL, Grasim and Hero MotoCorp were top Nifty losers

Here is a quick recap of the market moving developments:

• Quarterly Results: Indian companies’ earnings for the latest quarter have been mixed so far, with 18 of the 47 Nifty companies that have posted results beating analysts’ estimates, while 27 trailed the consensus.You can check the quarterly performance of Divi’s Lab, Shree Cement, Eicher Motors and Hero MotoCorp.
• IPO euphoria continues: Rolex Rings which got subscribed for more than 130x made a strong market debut with its shares getting listed at 39% premium to Rs 1,250 over issue price of Rs 900 per share. During the week CarTrade was subscribed by 20.29 times, Nuvoco Vistas by just 1.71 times, Chemplast Sanmar by 2.17 times and Aptus Value Housing by 17.2 times in the week. 
• BSE circular on smallcaps and midcaps: The week saw a major fall in Midcap and Smallcap indices for the first three days of the week, after the BSE released a circular which dealt with Additional Surveillance Measures. The BSE had introduced additional surveillance measures applicable on Weekly, Monthly and Quarterly basis.  This would be over and above the daily price limits already imposed on smallcap stocks. Following the announcement, the BSE Midcap index fell nearly 4% while BSE Smallcap index plunged over 5% till Wednesday noon, as investors were worried about which stocks would be impacted the most.
• BSE’s clarification: Small and Midcap indices recovered on Wednesday, after the BSE clarified that its latest add-on surveillance measures to limit movement in stock prices beyond their price-band limit on a weekly, monthly and quarterly basis is limited only to X, XT, Z, ZP, ZY, Y group shares exclusively listed on the BSE. Further, the new surveillance measures are applicable on stocks with mcap less than Rs 1,000 crore.  
• Inflation: India’s CPI based retail inflation eased to a three month low in July 2021 to 5.9% from 6.26% in June on the back of lower food prices. Food inflation fell by 1.19% to 3.96%.
• Vehicle Scrappage Policy: Prime Minister Modi launched the much awaited vehicle scrappage policy with an aim to create a viable circular economy. This policy will bring in investments of around Rs 10,000 crore.

Check out other interesting articles:

Divi’s Lab Q1 Results: Divi’s Lab has reported a strong set of numbers in Q1FY22, on the back of cost optimisations and good product mix. Sales increased due to high demand caused by Covid 19 and the margins improved due to strategic backward integrations and SEZ units. Future outlook remains positive too, as the company is undertaking large capex projects with the aim to generate 2x asset returns.Read more.

Shree Cement Q1 Results: Shree Cement has reported steady Q1 results for the quarter ended June. The company’s shares, however, fell as it lagged its peers though it met analyst estimates. The company saw its profit, revenue and operating income fall sequentially, due to rise in power and fuel costs.The company's total volume on a standalone basis stood at 6.84 million tonnes, down by 16.7% from the last quarter. Read more.

Eicher Motors Q1 Results: Eicher Motors has reported a decent set of numbers in the Apr-Jun 21 period, in the context of the ongoing challenges such as semiconductor shortages and Covid-19 induced disruptions. While the ongoing environment is difficult for the auto players due to the semiconductor shortages and Covid-19 related uncertainties, Eicher Motors has the necessary firepower to tide over these difficult times. Read more.