Market Wrap Podcast, May 26: Here’s all that happened in the markets today

Benchmark indices snapped the sideways movement, logged over the past two days, and reclaimed crucial psychological levels last seen on March 10 as market participants continued to look at a sharp rebound in the economic activity once Covid-19 restrictions begin to ease. Besides, a rally in global markets as a host of central bank policymakers pledged to keep monetary policy loose despite recent signs of an uptick in inflation pulled investors towards riskier asset classes.

Recently, US Federal Reserve officials had reaffirmed a dovish monetary policy stance, assuaging concerns over rising inflation. Now, the European Central Bank policymakers have said that it may be too early to discuss tapering of emergency bond purchases.

In effect, the pan-European STOXX 600 index rose 0.2 per cent in the Euro region while Germany’s DAX was up about 0.1 per cent. France’s CAC 40 added 0.26 per cent and the UK’s FTSE 100 climbed 0.07 per cent. Mainstream indices in Japan, China, and Australia too gained up to 0.3 per cent.

Meanwhile, Dow Jones Futures were up over 100 points, or 0.3 per cent, in early pre-market deals. Futures for S&P 500 and Nasdaq Futures also gained around 0.3 per cent each, supported further by a decline in 10-year US Treasury yield at 1.5 per cent.

Against this backdrop, the frontline S&P BSE Sensex soared 436 points in the intra-day deals and hit a high of 51,073 levels propelled by Infosys, HDFC, TCS, Bajaj Finance, Bajaj Finserv, L&T, and Reliance Industries. The index, however, came off highs and settled at 51,017.5 levels, up 380 points or 0.75 per cent.

On the NSE, the Nifty50 index clinched the 15,300-mark to end at 15,301, up 93 points or 0.6 per cent. Earlier in the day, it had crossed the record closing peak of 15,313 and hit a high of 15,320.

Volatility index, India VIX, however, surged 11 per cent to 21 levels ahead of the expiry of monthly F&O contracts due tomorrow.

Overall, Bajaj twins, Infosys, Grasim Industries, UPL, Maruti Suzuki, Wipro, and Indian Oil Corporation were the top gainers on the indices while PowerGrid, JSW Steel, Hindalco, NTPC, Tata Steel, and Coal India were the top laggards.

In the broader markets though, the S&P BSE MidCap index slipped 0.14 per cent compared with the S&P BSE SmallCap index, which was up 0.69 per cent.

Sectorally, the Nifty Metal index declined 2 per cent after Credit Suisse cut outlook on the sector from ‘Overweight’ to ‘Underweight’. The brokerage said it has booked profits on metals, reversing positions added in December-20 and earlier, as P/B relative to market is near a 10-year high. The valuation can go higher and stay elevated in a super-cycle, but it believes the current surge in apparent demand is due to an extreme inventory cycle and not a structural increase.

That apart, the Nifty PSU Bank index nursed losses up to 0.3 per cent.

On the upside, the Nifty Realty added 3 per cent and the Nifty IT index 2 per cent.

Buzzing stocks

>> Shares of consumer discretionary companies were in focus at the bourses on Wednesday, with the S&P BSE Consumer Discretionary Goods & Services hitting a new high after a strong rally in smallcap stocks like Mahindra Holidays & Resorts, Lux Industries, Dish TV India, Shalimar Paints and Borosil, which rallied more than 10 per cent on the BSE in intra-day trade.

The S&P BSE Consumer Discretionary Goods & Services index was up 1 per cent at 4,895 on the BSE in intra-day today, surpassing its previous high of 4,856.98, touched on February 16, 2021. The stocks from sectors like movies & entertainment, hosiery, hotels and restaurants, auto ancillaries, paints and real estate saw a sharp run-up today amid reports the government may look at providing support at an appropriate time to segments requiring fiscal help.

>> That apart, shares of energy solutions firm Thermax rallied 8 per cent to Rs 1,526.95 on the BSE, in the intra-day trade, after the company reported strong earnings for March quarter (Q4FY21). Its consolidated profit after tax (PAT) more-than-doubled at Rs 107 crore as against Rs 39 crore clocked in Q4FY20. The stock was trading close to its 52-week high of Rs 1,550, touched on May 7, 2021.

>> Those of Indoco Remedies zoomed 20 per cent to Rs 405 on the BSE in intra-day trade on the back of huge volumes after the pharmaceutical company reported a strong revenue growth from its international business in the March quarter (Q4FY21). The stock surpassed its previous high of Rs 377.15, touched on May 6, 2021. It was trading close to its record high level of Rs 413, hit on May 25, 2015.

>> Eicher Motors ended flat on the BSE after the company said Royal Enfield will shut its three south Indian manufacturing plants for three days to ensure safety amid rising Covid-19 cases.

>> On the earnings front, Berger Paints’ profit in the March quarter nearly doubled to Rs 209 crore while its revenue increased 49.5 per cent year-on-year to Rs 2,026.2 crore. It’s margin expanded 120 bps to 16.6 per cent during the quarter. The stock ended 1.6 per cent higher today.

>> Lastly, Manappuram Finance’s Q4 profit stood at Rs 468.3 crore compared with Rs 398 crore in Q4FY20. The lender, however, increased provisions sequentially from Rs 80 crore to Rs 106.6 crore. Its stock pared gains and ended flat on the BSE.