Nifty notches up another high as robust macro data, favourable policies boost sentiments

The Nifty started off the week with decent gains on Monday. IT stocks climbed while Auto and Metal tumbled. The index continued its rise on Tuesday, tracking positive cues in other Asian markets.

Domestic sentiments were upbeat after Finance Minister Nirmala Sitharaman launched the National Monetisation Pipeline (NMP) on Monday. Through NMP, the government will be selling infrastructure assets worth Rs 6 lakh crore over the next four years.

After hitting record high levels on Wednesday, the indices sharply pared gains and ended near flat. On Thursday, the Nifty closed below the 16650-mark. Moody’s Investor Service said that the second wave of Covid will lead to higher bad loans in the retail and SME segment but severe asset quality decline is unlikely. 

On Friday, Nifty closed above the 16700-mark. Metal stocks resumed uptrend and all the sectoral indices on the NSE ended in the positive. During the mid session, Nifty hit a record high of 16722. 

Top gainers and losers

• Nifty Auto and Nifty Media declined the most, down 1.10% and 0.67% respectively.
• Nifty Metal gained the most amongst major indices, Up 2.94%.
• Hindalco, Bajaj Finserv, ONGC, Adani Ports & TCS were the top Nifty gainers
• Maruti Suzuki, Bharti Airtel, Titan, Asian Paints & Powergrid were the top Nifty losers.

Here is a quick recap of the market moving developments:

• IPO euphoria ends: Four IPOs got listed this week and all of them listed in the negative. Nuvoco listed at the highest discount of 17.4%. Analysts see high valuation as the main reason for the fading of IPO excitement. 
• NMP: FM Nirmala Sitharaman launched the National Monetisation Pipeline on Monday. The National Monetisation Pipeline (NMP) comprises a four-year pipeline of the Central Government's brownfield infrastructure assets. NITI Aayog CEO Amitabh Kant said, infra assets worth Rs 6 lakh crore across rail, road, power sectors to be monetised over 4 years. 
• Bajaj Finserv gets approval for setting up AMC: Bajaj Finserv received an in-principle approval from SEBI for setting up an AMC, driving the stock to fresh highs during the week. Analysts pointed out that while the opportunity is huge, given the under penetration and financialisation of savings in India, the competitive intensity in the industry is high with 44 players. Bajaj Finserv has inherent advantages in its business model, given its presence in the retail finance, life insurance, general insurance, and securities businesses.
• Moody’s on SMEs: Credit Rating Agency Moody’s said that the 2nd wave of Covid will lead to fresh problems in loans in the vulnerable retail and SME segment, but severe deterioration in asset quality is unlikely.  The improved profitability, capital and loan buffers of banks will help them to absorb losses and maintain credit strength.  

If you’ve gotten this far, you might as well read our other blogs. 

• Which industries are still behind the pre-covid levels and which have recovered. 
• Check out our analysis of the upcoming Nykaa IPO. (It is one of the very few profitable big Indian startups)