Market Wrap Podcast, May 10: Here’s all that happened in the markets today

A sharp drop in daily Covid-19 cases perked up bulls on Dalal Street on Monday as investors hoped for a sooner-than-expected taper down of the second wave. However, even though the new case count, at over 366,000 and 3,754 deaths, were off a little from recent peak, it came on the back of 1.47 million tests for Covid-19 which were this month’s lowest yet.

Nonetheless, domestic equity indices started gap-up and remained parked near the day’s high level for the better part of the day. Among the frontline indices, the BSE barometer of 30-shares hit an intra-day high of 49,617 before ending the session at 49,502 levels, up 296 points or 0.6 per cent. About seven of the 30 constituents ended the day in the red including UltraTech Cement, Infosys, HCL Tech, Reliance Industries, Asian Paints, Bajaj Finserv, and Axis Bank. The stocks declined up to 1.3 per cent.

On the upside, L&T, Dr Reddy’s Labs, Sun Pharma, NTPC, PowerGrid, and IndusInd Bank were the top index gainers, up between 2 per cent and 4 per cent.

On the NSE, the Nifty50 index reclaimed the crucial 14,900-mark and extended its rally to as high as 14,967 during the day. It ended the day at 14,942 levels, up 119 points or 0.8 per cent, riding on the back of gains in Coal India, UPL, Hindalco, Indian Oil Corporation, Tata Motors, L&T, and Divis Labs. These stocks rallied up to 8 per cent.

Sectorally, the Nifty Metal and Pharma indices zoomed 3 per cent each on the NSE with the Nifty Pharma index hitting an all-time high of 14,228 in the intra-day deals today. Since April, the Nifty Pharma index has outperformed the market by surging 15 per cent, as against a 1.7 per cent gain in the Nifty50 index.

That apart, metal stocks ruled at the bourses today as Copper continued to breach record high levels across exchanges amid surge in demand. On the MCX, the metal surpassed the Rs 800 levels while prices on the LME continued to hover near its all time high of $10,638. Consequently, MOIL, NMDC, Coal India, Hindalco, Nalco, Vedanta, and Tata Steel jumped up to 8 per cent on the NSE today.

Meanwhile, all other sectoral indices were up in the range of 0.02 per cent (Nifty IT index) to 1.6 per cent (Nifty Auto index).

Overall, the market breadth favoured bulls in the ratio of 2:1 aided by an outperformance in the broader markets. The S&P BSE MidCap and SmallCap indices gained 1 per cent each today.

Individually, shares of sugar manufacturers and their allied companies continued their northward movement on Monday, ralling up to 75 per cent in the past one month on positive outlook. The sugar industry, analysts say, is well poised to benefit from, both, global and domestic factors such as tight global demand-supply situation, favourable policies, push for higher ethanol blending in India and higher ethanol capacity addition.

Dhampur Sugar Mills, Praj Industries, Dwarikesh Sugar Industries and Triveni Engineering & Industries rallied in the range of 14 per cent to 19 per cent on the BSE in the intra-day trade today while Dalmia Bharat Sugar and Industries, Uttam Sugar Mills, Avadh Sugar and Balrampur Chini Mills were up between 9 per cent and 10 per cent.

>> That apart, shares of Hindustan Copper hit an over eight-year high and were locked in the upper circuit of 10 per cent at Rs 189.20 on the BSE on expectations of improved demand outlook. The stock of the state-owned copper company has rallied 25 per cent in the past three trading days. It was quoting at its highest level since November 2012.

Global markets

World stocks ticked up to new peaks on Monday on hopes that interest rates will remain low and the economies will continue their recovery. MSCI’s gauge of stocks across the globe hit a fresh record high and was up 0.1 per cent.

Europe’s STOXX 600 regional benchmark was up 0.1 per cent in early deals, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent.

In the commodities market, however, oil prices rose after a cyber attack shut down a US pipeline operator that provides nearly half of the US east coast’s fuel supply. Brent crude rose 0.5 per cent to $68.64 per barrel, while US crude ticked up 0.5 per cent to $65.23 a barrel.

Top developments at this hour:

>> LIC’s holding across 296 companies where its holding is more than 1 per cent slipped to an all-time low of 3.66 per cent as on March 31, 2021, down from 3.70 per cent as on December 31, 2020. It is also down from all-time high of 5 per cent as on June 30, 2012. Interestingly, in value terms there was an increase in the equity assets held by the state-run company at an all-time high of Rs 7.24 trillion in March, which represents a 6.30 per cent increase.

>> On the economic front, a plea has been filed with the Supreme Court seeking a moratorium of six months on the repayment of bank dues owing to the second wave of the Coronavirus.

While the RBI is yet to take a call on a moratorium, last week it had allowed banks to restructure loans for up to two years. The plea also sought extension of time period for the restructuring scheme.

>> The Federation of Automobile Dealers Association said on Monday that automobile registrations across the country dropped by 32 per cent last month as compared to April 2019 with passenger vehicles showing a decline of over 11 per cent. Data released by the body showed three-wheeler registrations were down by 55.59 per cent while Commercial vehicles witnessed a downswing of 34.58 per cent.