Market wrap: Rising cases, weak macro data lead to yet another weekly fall

Market wrap: Rising cases, weak macro data lead to yet another weekly fall

Last updated: 16 Apr, 2021 | 12:59 pm

Market wrap: Rising cases, weak macro data lead to yet another weekly fall

The markets saw another interesting week, with factors such as additional curbs due to rising Covid-19 cases, Q4 earnings releases, and macro data steering the course of the index. The Nifty plunged by more than 3.5% on Monday, as surging Covid-19 cases led to fears of fresh lockdowns.

The index recovered on Tuesday, as investors cheered the government's proposal to fast-track approvals for foreign-produced covid-vaccines. The stock market was closed on Wednesday on account of Ambedkar Jayanti. The mood remained cautious on Thursday, as many states increased restrictions due to the havoc created by the virus. We also witnessed stock specific action in TCS, Infosys and Wipro, after their Q4 earnings announcements. For the week, the Nifty lost 1.5%, posting its second straight weekly loss.

Top gainers and losers

  • Nifty Pharma Index was the only sectoral gainer in the week, up 1.8%
  • Nifty PSU Bank (-7%) and Nifty Realty (-5.3%) were the biggest losers
  • Among stocks, Adani Ports, IndusInd Bank, Infosys, Grasim and Bajaj Finance were the top Nifty losers
  • Cipla, M&M, Wipro, ONGC, Dr Reddy\u2019s were the top Nifty gainers

Here is a quick recap of the market moving developments:

  • Earnings season kicks off: Nifty heavyweights including TCS, Infosys and Wipro have announced their Q4 results. While the ongoing pandemic has affected various businesses, it has forced businesses to move towards greater digitization, providing a good opportunity for the IT industry. You can check out the analysis for TCS, Infosys and Wipro.
  • CPI inflation rises to 5.5% in March: Retail inflation rose further in March as fuel and transportation costs increased alongside some categories within the food basket. Consumer Price Index inflation stood at 5.52% in March compared with 5.03% in February. However, the inflation rate is still within RBI\u2019s upper tolerance band of 4-6%. 
  • IIP contracts 3.6% in February: The contraction in IIP during February was primarily due to a decline in the manufacturing and mining sectors.The manufacturing sector saw a contraction of -3.7% on-year to 129.3 in February, while the mining sector witnessed a fall of -5.5 per cent to 116.5. This was due to fresh curbs introduced by various states in the month, due to a sudden spike in Covid-19 cases. 
  • Rupee eases from 9-month low: On Thursday, the rupee had weakened to a nine-month low against the US Dollar, as investors were concerned about stringent lockdowns to curb Covid-19 cases. India reported a record 200,000 new Covid-19 cases on Thursday, forcing Mumbai to go into a fresh lockdown. On Friday, the rupee recovered 58 paise against the US dollar to settle at 74.35, due to weakness in USD. The Fed said that it is willing to tolerate more inflation, leading to a drop in USD.

Gold prices rebound

Gold prices recovered in the week, supported by a stable US dollar and a fall in 10-year US treasury yields. The decline in equity markets during the week also supported the prices for the yellow metal, as investors moved towards lower risk assets amid rising Covid cases.

Check out our other analysis on important market developments!

Strong macro data, Fed\u2019s supportive policy propels US market to record high: The week\u2019s trading started off on a strong note, after March payrolls data released over the previous week showed robust jobs addition. After moving to a new high on Monday, the market took a breather on Tuesday. The indices resumed their rally over Wednesday and Thursday, after the Fed reiterated its accommodative stance to revive the economy.  View analysis

RBI policy update: Repo rate, inflation, growth, liquidity and more:  The  RBI's Monetary Policy Committee (MPC) has kept the repo rate unchanged at 4% in its bi-monthly policy meeting held today. The reverse repo rate too stands unchanged at 3.35%. Repo rate is the rate at which the RBI lends to commercial banks, and reverse repo is the rate at which it borrows from them. View analysis