GDP data, rising yields, IPO euphoria keeps investors busy in the week!

GDP data, rising yields, IPO euphoria keeps investors busy in the week!

Last updated: 05 Mar, 2021 | 02:43 pm

GDP data, rising yields, IPO euphoria keeps investors busy in the week!

The Indian equity market rebounded from its biggest one-day fall in 10 months seen on Feb-26th to end the week 2.5% higher. After gaining for the first three days in the week, the markets saw declines on Thursday and Friday, amid weak global cues and rise in bond yields.

Newsflow about long-term bond yields, Q3 GDP data, auto sales figures, FII flows and IPO’s dominated investors’ sentiments.

Sensex ends the week with gains

  • The Sensex ended the week with gains of 2.5%, snapping its 2-week losing streak. Sensex recovered in the first two days on the back of robust macro-economic data such as positive GDP growth, PMI and auto-sales and also developents around quick rollout of the vaccine. However, concerns around increase in US treasury yields, volatile crude oil prices and weak global cues spooked investors in the last two days.

Top gainers and losers

  • Nifty Bank Rises Over 1% & Midcap Index Over 3%; Media & IT emerge as Top Gaining Indices
  • Except PSU Bank, All Sectoral Indices Give Positive Returns This Week
  • - UltraTech, Grasim, Adani Ports & Kotak Mahindra Bank were the Top Nifty Gainers in the week
  • Only 6 Nifty Stocks (Bharti Airtel, IndusInd Bank, SBI, Hindalco, Coal India and HDFC Bank) ended lower in the week

Here is a quick recap of the market moving developments:

  • India beats recession blues: The Indian economy has emerged from a technical recession (two consecutive quarters of negative growth) and returned to growth of 0.4% in Q3FY21. 
  • Robust Auto sales data:  Two-wheelers and three-wheeler manufacturers reported robust sales growth in the domestic market in February, as demand for personal mobility amid the COVID-19 pandemic continued to drive the market. The market leader Maruti Suzuki’s domestic sales grew by 11.8% to 152,983 units last month, as against 136,849 units in February 2020. Two-wheeler leader Hero MotoCorp sold 5.05 lakh units, up 1.4% on-year.
  • Robust macro-economic data: PMI for manufacturing sector in Feb was reported at 57.5, indicating swift recovery. Production activity increased again in February and the pace was among the quickest in nine years. Industrial production (as measured by IIP) grew by 1% YOY, supported by growth in Manufacturing, Electricity and Consumer Durables segment.  
  • IPO euphoria continues: MTAR Technologies IPO got subscribed by a whopping 200 times, on the back of strong demand across categories. The company had expected to raise Rs 560 crore through the issue.  

Rise in bond yields continue to spook investors

Bond Yields spike

The debt markets continued to remain under pressure in the week. The 10-year G-sec yields have been on the rise in the last two weeks due to factors such as rise in fiscal deficit, inflation outlook and global volatility. 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.

Gold prices

Gold prices continued to drop in the week, down to around Rs 44,311 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!

How global and Indian markets fared in 2021: Key equity market indices in the USA ended higher in February. After registering notable gains in the first 20 days, indices in the US markets fell in the last 10 days of the months. Here’s our analysis.

Nifty Q3 earnings review:  Most of the companies in the Nifty 50 index have reported better-than-estimated results in Oct-Dec 20 period, signalling that Nifty companies have left pandemic blues behind. Check our detailed review.

Morgan Stanley upgrades PNB, BoB; SBI remains top pick: Morgan Stanley has upgraded the share price target of PSU bank stocks Punjab National Bank and Bank of Baroda on the back of improving balance sheets and capital ratios. View analysis

Ease My Trip IPO Analysis: Easy Trip Planners, the holding company for online travel portal easemytrip.com, is set to raise up to Rs 510 crore through IPO which opens on March 8th, Monday. Read our view on the IPO here