Investor wealth jumps by over Rs 2 lakh cr; 10 takeaways from market action

The Indian market got off to a strong start on April 22 despite muted global cues after the social media giant Facebook announced that it had picked a 9.9 percent stake in Reliance Jio, for $ 5.7 billion (Rs 43,574 crore).

The sharp rally seen in RIL not just triggered a positive sentiment on D-Street but also helped the market recoup losses. The bulls took control and pushed the Sensex back above 31,000 and Nifty above 9,100.

The sharp rally helped both the Sensex, and the Nifty50 recoup almost 70 percent of loses seen in the previous session.

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The final tally on D-Street: the S&P BSE Sensex rose 742 points to 31,379 while the Nifty50 closed 205 points higher at 9,187.

Sectorally, the action was seen in the energy, auto, FMCG, oil & gas, Bankex, and consumer durable space while profit-taking was visible in realty and capital goods stocks.

“Market rose led by the Facebook deal with Reliance Jio as investors reposed faith in select largecaps amidst shrinkage of economic activity due to the lockdown,” S Ranganathan, Head of Research at LKP Securities told Moneycontrol.

“We witnessed further strength in afternoon trade as the US Senate approved the bill for a further package of $ 484 billion,” he said.

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Here are 10 takeaways from today’s market action:

Facebook’s Rs 43,574-crore Jio bet lifts sentiment

Facebook’s $ 5.7-billion bet on Jio led to more than 10 percent rally in the RIL stock price. RIL added more than Rs 80,000 crore in terms of market capitalisation in a single trading session.

“The deal between Facebook and Reliance is positive for Reliance Industries coming under the current trying times. The two can combine their unique strengths using their network of users, share their data, develop apps for social, digital payments, gaming, shopping, flight and hotel bookings, etc,” Deepak Jasani, Head Of Research, HDFC Securities told Moneycontrol.

“The combination of WhatsApp expertise and user base, R Jio’s vast subscriber base and Facebook’s deeply entrenched user base and technology is theoretically a win-win for all,” he said.

Investor wealth

Investor wealth rose by more than Rs 2 lakh crore in a single trading session. The average market capitalisation of the BSE-listed companies rose from Rs 120.42 lakh crore on April 21 to Rs 122.58 lakh crore on April 22..

Sectoral action

Sectorally, buying was seen in the S&P BSE Energy index, which was up 7.4 percent, followed by the S&P BSE Auto index that rose 2.5 percent and the S&P BSE FMCG index ended 2.4 percent higher.

Selling pressure was seen in the S&P BSE Realty index, which was down 0.89 percent and the S&P BSE Capital Goods index fell 0.83 percent.

Broader markets 

The broader markets underperformed. The S&P BSE Midcap index rose by 0.78 percent while the S&P BSE Smallcap index closed 0.73 percent higher.

Nifty gainers & losers

Top Nifty gainers included Bajaj Finserv, Asian Paints, RIL, and ZEE Entertainment.

Top Nifty losers included Cipla, L&T, Vedanta, and ONGC.

Volume spike

A volume spike of more than 100% was seen in stocks like UPL, ZEE Entertainment, UBL, ACC, Century Textiles, Siemens and Petronet LNG.

Long & short buildups

Long buildup was visible in stocks like Wipro, Colgate Palmolive, Hero MotoCorp, Escorts, ACC, RIL and UltraTech Cements.

Short buildup was seen in stocks like Godrej Properties, ONGC, Canara Bank and Siemens.

Stocks @ 52-week high

More than 30 stocks hit 52-week high. These included Dr Reddy’s Laboratories, Laurus Lab, Ruchi Soya, Bajaj Healthcare, Career Point and Ruchi Soya.

Technical View

The Nifty formed a bullish candle on the daily charts. It closed in the green after two days of losses.

As long as the index remains above 8,900, sentiment may remain in favour of the bulls. Once a decisive close is witnessed above 9400, the fresh leg of upswing shall unfold.

The first targets on the upside is placed around 9,950, which is the 50 percent retracement of entire fall from 12,430 to 7,511.

A break below 8,900 will take the Nifty50 towards 8450, say experts.

For the time, traders should remain neutral on the index for a day or two and focus on stock-specific opportunities.

Stocks in news

Maruti Suzuki | The share price jumped over 3 percent after it received permission to resume operations at the Manesar plant.

Apollo Tyres | The stock was up almost 3 percent after the company partially resumed operations at Kerala’s Perambra from April 21.

ACC | The share price surged more than 7 percent after brokerage houses retained their bullish stance on the stock, given the attractive valuations and strong operating numbers in quarter ended March 2020. Most brokerages feel the results were in line with estimates, while EBITDA was better than expected.

Kotak Mahindra Bank | The share price was up 2 percent after the board of the company approved fundraising. The board gave its approval for raising of capital by way of issue of equity shares by the bank for up to 6,50,00,000 equity shares of Rs 5 each, through a private placement, follow-on public offering, Qualified Institutions Placement or a combination thereof.

DEN Networks | The share jumped 5 percent after the company reported a consolidated profit of Rs 22.52 crore after tax in the March quarter. The company had posted a consolidated net loss of Rs 212.82 crore in the same period of the previous fiscal.

Kalpataru Power Transmission | The share price surged over 7 percent after the company’s project sites in the country resumed partially.

Shalimar Paints | The stock jumped more than 6 percent after Porinju’s Equity Intelligence India bought 1.84 percent stake in company in the March quarter.

Gayatri Projects | The share price was up 5 percent after construction resumed at the company’s project sites.

Nestle India | The share gained over 3 percent after the company said all of its manufacturing plants were operational but at a scaled down level due to restrictions imposed by local authorities.

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