HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Bulls make strong come back on Dalal Street
Jan-19-2021

Bulls made strong comeback on Dalal Street on Tuesday with frontline gauges settling with a gain of over one and a half percent. The investors’ mood remained up-beat throughout the day and there appeared not even an iota of profit booking, as investors continued hunt for fundamentally strong stocks. Markets made a gap up opening as traders got boost with ICRA’s report stating that economic activity recorded a broad-based improvement in December as against November, showing a return of demand. ICRA said most of the indicators have displayed a year-on-year (y-o-y) expansion in December 2020, which signals a tentative return to pre-COVID normalcy. Sentiments also got some support with report that India recorded 9,975 fresh cases of the coronavirus disease (Covid-19), the lowest daily rise since June 8, 2020, resulting in the total active cases in the country falling below 205,500. The death toll has increased to 152,593. India's caseload tally stands at 10,582,647.

Markets extended gains with traders taking support with report that the Finance Ministry has released the 12th instalment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs 72,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax (GST). Traders were also energized as Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion. Traders also took note of report that India offers tremendous business opportunities to the US in various sectors such as manufacturing and the COVID-19 pandemic has presented a unique opportunity to the country to work with America to build resilient and reliable supply chains that will have the ability to weather future shocks, eminent speakers told a virtual forum ahead of the India Subcontracting Expo.

On the global front, European counters made mostly positive start buoyed by hopes that an economic recovery following the coronavirus pandemic is not far off. Asian markets ended mostly higher on Tuesday, even after Japan's industrial production declined for the first time in six months in November. The final data from the Ministry of Economy, Trade and Industry showed that industrial output dropped 0.5 percent month-on-month, in contrast to October's 4 percent increase and the flash estimate of nil growth. This was the first fall in six months. Shipments fell 1.2 percent, in contrast to previous month's 4.9 percent increase. The rate was revised from -0.9 percent estimated previously.

Back home, banking stocks remained in focus as S&P Global Ratings said India's banking system's low profitability and weak asset quality present some difficulties in significantly boosting digitalisation for several state-owned and smaller private-sector banks. Shares of non-banking financial companies (NBFC) were also in focus as the Bajaj twins - Bajaj Finance and Bajaj Finserv rallied, while Cholamandalam Investment and Finance Company traded higher on the BSE in intra-day trade on the back of heavy volumes.

Finally, the BSE Sensex soared 834.02 points or 1.72% to 49,398.29, while the CNX Nifty was up by 239.85 points or 1.68% to 14,521.15.

The BSE Sensex touched high and low of 49,499.86 and 48,805.54, respectively and there were 27 stocks advancing against 3 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 2.31%, while Small cap index was up by 1.66%.

The top gaining sectoral indices on the BSE were Realty up by 4.04%, Metal up by 3.01%, Power up by 2.77%, Capital Goods up by 2.70% and Industrials up by 2.68%, while there were no losing indices on the BSE sectoral front.

The top gainers on the Sensex were Bajaj Finserv up by 6.77%, Bajaj Finance up by 5.25%, HDFC up by 3.25%, Larsen & Toubro up by 2.64% and ICICI Bank was up by 2.64%. On the flip side, Tech Mahindra down by 0.54%, ITC down by 0.30% and Mahindra & Mahindra down by 0.01% were the few losers.

Meanwhile, ICRA in its latest report has said that economic activity recorded a broad-based improvement in December as against November, showing a return of demand. It said most of the indicators have displayed a year-on-year (y-o-y) expansion in December 2020, which signals a ‘tentative return to pre-COVID normalcy’. It can be noted that there have been apprehensions about the sustainability of the demand after a pick-up in economic activity during the festivities. December was the first month after the busy activity season.

The report said ‘Economic activity rebounded solidly in December 2020 relative to the previous month, reflecting a pick-up in demand after the temporary post-festive slack and year-end discounts’. It said the waning of the unfavourable base effect related to fewer working days in November 2020 contributed to the improvement in December 2020, and added that a pick-up in the generation of GST e-way bills, and the considerable expansion in rail freight traffic, offer encouraging signals of the pace of revival in economic activity.

According to the report, as many as 12 of the 15 high-frequency indicators tracked by the agency recorded an improved year-on-year performance in December 2020, relative to November 2020, including electricity generation, the output of passenger vehicles (PVs), motorcycles, vehicle registrations, and fuel consumption.

It pointed out that the year-on-year growth in the generation of GST e-way bills nearly doubled to a robust 15.9 per cent in December 2020 from 8.1 per cent in the previous month, with a distinct pick-up in the second half of the former, added that the robust performance of e-way bills in December 2020 suggests that the GST collections will remain healthy in January as well.

The CNX Nifty traded in a range of 14,350.85 and 14,546.05 and there were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 6.76%, Bajaj Finance up by 5.26%, Tata Motors up by 5.20%, Hindalco up by 3.62% and Sun Pharma up by 3.53%. On the flip side, ITC down by 0.36%, Tech Mahindra down by 0.28%, Britannia down by 0.08% and Mahindra & Mahindra down by 0.05% were the few losers.

European markets were trading mostly higher; UK’s FTSE 100 gained 15.50 points or 0.23% to 6,736.15 and Germany’s DAX rose 30.60 points or 0.22% to 13,878.95, while France’s CAC was down by 2.07 points or 0.04% to 5,615.20.

Asian markets ended mostly higher on Tuesday as investors looked ahead to comments from US Treasury Secretary nominee Janet Yellen on US stimulus at the Senate confirmation hearing later today. Janet Yellen is expected to urge lawmakers to act big on relief spending during confirmation hearing, underscoring the urgency and scope of the incoming Biden administration's $1.9 trillion stimulus package. Japanese shares ended higher on bargain hunting following two days of profit-taking. However, concerns over surging corona virus infections capped gains.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,566.38
-29.84
-0.83

Hang Seng

29,642.28
779.51
2.70

Jakarta Composite

6,321.86
-67.97
-1.06

KLSE Composite

1,601.88

-7.64

-0.47

Nikkei 225

28,633.46
391.25
1.39

Straits Times

2,995.92
5.52
0.18

KOSPI Composite

3,092.66
78.73
2.61

Taiwan Weighted

15,877.37
265.37
1.70
  RELATED NEWS >>
Most Viewed >>
April 19 , 2024
JPMorgan bullish on Indian stocks, suggests ma
April 19 , 2024
Is it time to take small bets in FMCG stocks?
April 18 , 2024
Mutual fund industry assets grow 35% in FY24
April 19 , 2024
Lok Sabha Elections 2024: How will they impact
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.