Weekly Market View – 16th January 2021

Indian Market Outlook:

The Key benchmark indices rose for a third straight week however posted their biggest drop on Friday in nearly a month, amid a decline in global markets, after US President-elect Joe Biden’s $1.9-trillion Covid-19 relief plan sparked concerns over an increase in corporate taxes. Nifty ended the week 0.6 percent higher at 14433 points while Sensex ended 0.5 percent higher at 49035 points. Broader market underperformed the key benchmark indices. BSE Midcap index ended 1.23 percent lower, while the BSE Small cap index fell 1.20 percent, during the course of the week. Foreign Institutional Investors were the net buyers during the week; bought equities worth Rs.7637 crore while the DIIs were the net sellers of Rs.7444 crore. The four IT biggies delivered blockbuster earnings for the December quarter despite the weak numbers usually seen in Q3. Infosys outperformed both TCS and Wipro on revenue growth. Investors may look to stay invested in the IT stocks for the long haul. Going forward near future trend of the market will depend on budget expectations, stock wise Q3 result and foreign inflows. Next week Nifty 50 index also will be result driven. Nifty 50 results scheduled next week are Bajaj Finance, Baja Finserv, Asian Paints, Bajaj Auto, JSW Steel, Reliance Industries, SBI Life Insurance, HDFC Life and Ultratech Cement. The heavy weight Reliance Industries will release its Q3FY21 results on 22^nd January, 2021. Other key results to watch next week are Mindtree, ICICI Lombard General Insurance, Federal Bank, Havells India, HDFC AMC, SRF, Jindal Steel, Biocon, and Bandhan Bank.

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Economic News:

• India’s bond yields surged the most in four months after the nation’s central bank drained 2 trillion rupees ($27.4 billion) from the banking system at a higher-than-expected rate. The cutoff for the 14-day reverse repurchase operation was set at 3.55%, 20 basis points higher than the Reserve Bank of India’s reverse repo rate of 3.35%, and 3.5% forecast by seven traders in a Bloomberg News survey. The central bank got bids worth 3.06 trillion rupees, it said. The cutoff fueled investor concerns that the RBI was signaling higher rates.

• India’s exports grew 10.92% year-on-year to $11.81 billion in the fortnight ended January 14, driven by a growth in pharmaceuticals, electronics and engineering sectors, indicating a revival in activity. Imports in the January 1-14 period were up 6.58% at $18.02 billion led by gold, and pearls, precious and semi-precious stones. In the week ended January 14, exports were $5.61 billion, up 5.59% over the same period of previous year and imports rose 12.28% to $9.32 billion.

Industry News:

• The International Monetary Fund (IMF) believes the farm bills passed by the Indian government have the potential to represent a significant step forward for agricultural reforms, a spokesperson of the organisation said here.There is, however, a need to strengthen the social safety net for those who might be adversely affected by the transition to the new system, Gerry Rice, Director of Communications at IMF, said at a news conference in Washington on Thursday.

• The apparel prices are likely to remain soft in the second half of 2020-21 even as the segment is in a recovery mode, according to a report. The apparel segment Wholesale Price Index recovered to pre-COVID-19 levels in November 2020, led by the festive and marriage season demand, India Ratings and Research said in a report on Friday. However, Ind-Ra continued to expect apparel prices to remain benign in the second half of 2020-21, leading to inventory liquidation. Meanwhile, Ind-Ra noted that the demand for blended fabrics recovered in November 2020 and was 20 per cent higher from the same period of the previous year, led by the festive and marriage season demand.

Company News:

• Home-grown FMCG and Ayurvedic products maker Dabur India on Friday announced its foray into the ghee category as part of its plans to expand product portfolio. The company, which has fast tracked launch of several new products after COVID-19, will launch ‘Cow Ghee’ exclusively on e-commerce platform Grofers, said a joint statement. Earlier, Dabur had forayed into the edible oil segment with the launch of its cold pressed mustard oil.

• State-run power giant NTPC on Friday said its 1,320 megawatt (MW) joint venture power plant at Meja, Uttar Pradesh, has been made fully operational with successful completion of trial operation of Unit-2 of 660 MW. First unit of 660 MW of the joint venture Meja Urja Nigam was made commercially operational in April 2019.

• Tata Steel said on Friday that its Advantica L Control “clean” steel product is being used on the interior walls and ceiling of new care home pods to allow families to be reunited during the coronavirus lockdown in the UK. The steel, which is easy to clean in order to keep fully sanitised, is being used to create innovative modular meeting rooms allowing care home residents to meet their families safely. The brainchild of Splash – an event space design business based in Stockport, Greater Manchester — the VisitorPod uses the high-quality Tata Steel product.

• Creditors to Dewan Housing Finance Corporation Ltd. have voted in favour of a resolution plan submitted by the Piramal Group, two people with direct knowledge confirmed. The Piramal Group beat Oaktree Capital and the Adani Group to win the bid. The sixth round of voting on resolution plans for DHFL closed at 8 p.m. on Friday, with 93.5% of creditors voting in favor of the Piramal Group.

Global News:

• The U.K. economy shrank less than expected during the lockdown in November, making it possible the nation will avoid a double-dip recession. The 2.6% contraction was 2 percentage points less severe than analysts had forecast. It means the economy will grow in the fourth quarter unless December, when restrictions eased, records a decline of 1%.

• After the holiday slump, activity in several of the world’s largest advanced economies extended their recovery in the second week of January. Yet compared with early December, Bloomberg Economics gauges that integrate data such as mobility, energy consumption and public transport usage remain significantly lower.

(Source:Bloomberg Quint, Economic Times, BusinessToday, Business Standard, Financial Express,Investing, Moneycontrol, livemint)

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