Today’s Market Summarised

The month of May opens with a green candle in the daily chart.

Nifty opened the day at 14,490 with a 140 point gap-down. But even with this, the index closed in green. The first candle went down 80 points but quickly regained this. Nifty started going up very slowly in the rest of the day.

A last hour rally saw Nifty move up above yesterday’s closing level. Nifty closed the day at 14,634, up 3 points or 0.02%.

Bank Nifty opened the day at 32,400 and was highly volatile. It tried to gain some power in the morning but failed. Just after noon, the results announcement from Kotak Bank, and the fall in the stock, saw Bank Nifty falling 400 points in 10 minutes even going under 32,000.

But all these losses were quickly recovered. In fact, Bank Nifty ended at a day-high. Bank Nifty closed the day at 32,465, down 316 points 0.96%.

It was mostly a day of consolidation until the end. Nifty Metal(up 2.16%) again made a lot of investors happy. Nifty FMCG(up 1.10%) and Nifty Media(down 1.35%) were the only other indices to move 1% to red or green.

All Asian markets which opened today are in red, while some including Japan was closed. European markets are trading flat, with London’s stock exchange being closed.

News Picks

The Andhra Govt announced a partial curfew in the state for 14 days starting Wednesday.

Maruti went up 2.2% in the day after reporting positive sales data for April. 

Auto sales data is continuing to come out.

Bajaj Auto‘s sales for the month of April is up more than 5% YoY, to 3.88 lakh units. The stock was in green all day but closed with only 0.5% gains.

Meanwhile, sales data of TVS Motors in April was reported much below estimates. The stock corrected and is down 2%.

Godrej Properties reported a loss of Rs 129 crore against Rs 101 crores in Q4 last year. The stock is down by 4%.

India’s April Manufacturing PMI (Purchasing Managers’ Index) reported at 55.5 vs 55.4 (MoM). The estimate was at 51.6.

NMDC April Production rises 74% to 3.13 Metric Tonne from 1.80 Metric Tonne & sales increase to 3.09 Metric Tonne from 1.38 Metric Tonne (YoY). The stock gained more than 2%.

Q4 consolidated net profit of Varun Beverages was reported to be Rs 129 crore vs Rs 54.9 crores last year. The company’s board also approved a bonus issue in ratio 1:2. The stock rallied by 5% up.

Adani Ports handled cargo volume of 24.46 MMT in April, up 86% (YoY). The stock rallied 4% ahead of tomorrow’s result.

Natco Pharma has received emergency use approval for Baricitinib tablets(used against rheumatoid arthritis) for Covid-19 treatment. The stock is up by 3%.

IDBI Bank reported their Q4 net profit at Rs. 512 crore vs Rs.135 crore last year. Stock closed up by nearly 3%, even when the gross NPA numbers were reported as one of the worst in the industry at nearly 24%.

Kotak Mahindra Bank’s Q4 standalone net profit was posted at Rs 1,670 crore, up nearly 40% YoY. But, the Q4 gross Non-Performing Assets were reported at 3.25% vs 2.26% last month. The result was below the expectations and the stock fell heavily and closed 1% down.

SBI Life Insurance reported a an increase in premium income tp Rs 15,560 crores up nearly 40% YoY. Net profits stayed flat at Rs 531 crores. Stock is up by more than 5%.

Bajaj Electricals has bought the remaining stakes of Starlite Lighting Ltd for a cash consideration of around Rs 60 crore from its promoters. Up by nearly 3%

Amara Raja Batteries has received closure orders from the Andhra Pradesh Pollution Control Board (APPCB) for its plants located in the state. They fell more than 3%. Competitor Exide Industries gained nearly 2.5% in the day.

IndusInd Bank reported a 193% jump in consolidated profit after tax at Rs 926 crore for the March quarter. The stock was up by more than 3 % at one point of time and then fell and closed in red(down 2%) among the top-losers.

After Reliance Industries Q4 results failed to impress investors, the stock fell 1.78% in the day. Most interesting was Reliance Jio’s Average Revenue per User falling. You can read all about the results here.

With this news, shares of Bharti Airtel rallied 4% up to Rs 558 as they have managed to maintain higher ARPUs than Jio.

Titan fell 4%, down for 3rd straight day after announcing results. Meanwhile, Marico shares hit all-time highs after rallying more than 8% after their results.

Markets Ahead

The back-to-back reporting of higher NPA rates by India’s leading banks have scared some investors. This is why we saw Bank Nifty closing in the red even with heavy buying near the end.

Vaccine shortage will continue according to a recent announcement by Serum Institute chief. The only hope now is Pfizer and Sputnik-V vaccines. Also, Drugs Controller General of India (DCGI) is said to review Zydus Cadila’s Zycov vaccine this week.

With all this continuing, and markets reacting negatively to Reliance and Banks results, we can assume that the 15,000 resistance is here to stay for a while longer. Markets may keep seeing sell-offs every time it reaches that level.

In these situations, IT and Pharma stocks may again continue to be the ones leading. Many midcap IT stocks including Happiest Minds(which we discussed few weeks ago) and Tata Elxsi hit all-time highs today. So these sectors are expected to move more, especially with their higher exposure to US clients. The Covid and economic situation in the US is getting better really fast, as vaccinations ramp up.

Bank Nifty may remain weak, until SBI results come out in the coming days. 

Stay safe, stay home if you can. Keep looking at charts and improve your skills.

Catch you all on The Stock Market Show tonight!