A busy week for the markets!
Last updated: 20 Feb, 2021 | 03:25 pm
The equity market witnessed profit booking during the week. Newsflow about IPOs, Bank Privatisation and GDP upgrade dominated investors’ sentiments.
Equity markets can also fall for 4 days in a week - investors know this now :)
The equity investors saw indices falling by more than 2% in the week - following many weeks of continuous rise. The decline can be attributed to profit-booking amid weak global equity market signals.
Top gainers and losers
Pharma, Auto and Private Banks stocks were the biggest losers this week. Power, PSU Banks and Metal stocks were among the biggest gainers during the week. The image below shows the biggest gainers and losers among the stocks.
Here is a quick recap of the market moving developments:
- IPO euphoria continues: Nureca Limited, a healthcare and wellness products distributor company, raised Rs 100 cr through IPO. RailTel, one of the largest neutral telecom infrastructure providers in India with PAN India optic fiber network, also raised Rs. 820 cr through IPO. Both the IPOs were subscribed upto 40x.
- PSU Bank Privatisation is back in the news: According to a Reuters report, the government has shortlisted four mid-sized PSU banks including Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India for privatisation. The government has not yet officially made any announcement.
- Oil prices volatile: Oil producers and refiners in Texas had remained shut for the last one week due to severe cold weather (-22 degrees). The impact from this cold weather has been much more severe than what analysts were initially expecting.
Now, let's also not forget that we have a Bond market - which is making everyone nervous
Bond Yields spike
The debt markets have been rattled after the government announced massive ₹80,000 crore borrowing plans in Budget 2021 to fund the widening fiscal deficit. At 9.5% of GDP in FY21, the expected fiscal deficit is sharply above street expectations. This has led to viscous sell-off in the bond market, leading to a spike in bond yields and consequent capital loss in bond portfolios.
Oil prices volatile
Oil prices have soared in the week to hit one-year high, as cold weather has led to supply disruptions. Oil producers and refiners in Texas have remained shut for the last one week due to severe cold weather (-22 degrees). The impact from this cold weather has been much more severe than what analysts were initially expecting. However, the prices eased in the last two days, after Texas energy companies began preparations to restart oil and gas production on Thursday.
Gold prices continued to drop in the week, down to around Rs 46,000 per 10 gm. Gold prices have been on the decline amid optimism of a faster global recovery, fueled by vaccine rollouts and hopes of more stimulus. This has led to a risk-on sentiment among investors, leading them to move away from the yellow metal.
Check out our other analysis on important market developments!
Nippon India Nifty 50 Value 20 Index Fund Analysis: This index chooses 20 stocks from the Nifty 50 based on certain criteria which indicate value. Stocks are selected on the basis of ROCE (Return on Capital Employed), P/E, P/B and Dividend Yield. View our analysis!
Bharti Airtel- Warburg Pincus deal: Bharti Airtel has announced that it will acquire a 20% equity stake in its DTH arm Bharti Telemedia for Rs 3,126 crore from an affiliate of Warburg Pincus. Check out the impact here
Magma Fincorp- Rising Sun Holdings deal: Magma Fincorp has announced that Adar Poonawalla-promoted Rising Sun Holdings will acquire a 60% in the company by subscribing to a Rs 3,456-crore preferential issue. View impact!