Markets flattens at the top in absence of fresh cues
Nifty indices once again scaled to record highs in the week gone by as the rally got supported by mid cap and energy counter. Nifty surpassed 17,400 levels during the week but however could not manage to close above that and ended on a flat note. Concerns remained that the rapid spread of the delta variant of the corona virus may slow the global economic recovery. The US Federal Reserve’s Beige Book said US economic growth downshifted slightly to a moderate pace in early July through August. Back home, the trading remained range-bound in absence of fresh cues as traders remained cautious ahead of long weekend. The Nifty ended up 0.2 pct to 17,369 levels for the week while the Nifty Midcap 100 and Nifty Smallcap 100 index gained about 1 pct and 2.3 pct respectively. For the week, FIIs were net sellers to the tune of Rs 11.13 bn and DIIs were net buyers to the tune of Rs 11.15 bn. Crude oil prices remained in a range with Brent prices ending at USD 72.95 a bbl.
Markets will take cues from global markets along with FIIs flow and crude oil price movement in the coming week. The Federal Reserve’s next monetary policy meeting on September 21-22 will be keenly watched by the global markets as it will provide an update on the plans for its asset purchase program.
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Sectors/Stocks in focus
- UCO Bank gained sharply as the RBI removed the Bank from its Prompt Corrective Action Framework (PCAF) following improvement in various parameters and a written commitment that the state-owned lender will comply with the minimum capital norms.
- Dr Reddy’s Laboratories gained a bit as it initiated supply of the first dose component of Russian COVID-19 vaccine Sputnik V to partner hospitals all over the country.
- BPCL came under pressure as Fitch Ratings said uncertainty over the bidder consortiums and process complexity, including valuation, may lead to potential delays in privatisation of BPCL.
- The Union Cabinet given green signal to the production-linked incentive (PLI) scheme for textiles for a budgetary outlay of Rs 10,683 crore. Textiles Minister Piyush Goyal earlier said the value of textile exports should be increased to USD 100 bn from USD 33 bn currently.
- The telecom department (DoT) has proposed a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments apart from a reduction in spectrum usage charge (SUC) prospectively, among measures to improve the health of the debt-laden sector and retain a three private player market.
Macro Updates
- S&P Global Ratings in its latest report has said that India is expected to post strong economic growth in the coming quarters, even as inflation, led by food prices, is likely to remain elevated. It noted that the economy is expected to clock 9.5 pct growth in FY22, followed by 7 pct expansion in the next year, and added that high nominal GDP growth would be important for ensuring fiscal consolidation going forward.
- Industrial production surged 11.5 pct in July mainly due to a low-base effect and good performance by manufacturing, mining and power sectors. The IIP had contracted by 10.5 pct in July 2020.
Author: Nisha Harchekar – M.M.S (Finance) – 16 yrs+ experience as Equity Research Analyst
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