Bulls continue to dominate D-Street; Sensex zooms over 1,100 points

Benchmark equity indices BSE Sensex and NSE Nifty surged over 2% on Wednesday following firm global cues and sustained inflows by foreign institutional investors (FII).  Easing US Treasury yields further fuelled demand for riskier assets.

The 30-share index Sensex closed 1,147 points up at 51,444, while the 50-share Nifty index settled 318 points up at 15,237.

Overall, market breadth stood in favour of bulls. On the BSE, 1,841 shares rose and 1,150 shares fell. A total of 180 shares were unchanged.

Buying in Bajaj Finserv (up 4.46%), Bajaj Finance (up 3.54%), Reliance Industries (up 4.52%), Infosys (up 2.8%) and HDFC (up 2.6%) boosted the indices.

Foreign portfolio investors (FPIs) bought shares worth Rs 2,223.16 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 854.04 crore in the Indian equity market on March 2.

Experts’ take:

Vinod Nair, Head of Research at Geojit Financial Services
Markets across the globe were filled with optimism as the focus shifted from concerns over high valuation to a stronger economic recovery and earnings growth. The Indian market was on a rising streak echoing the global sentiment.

S Ranganathan, Head of Research at LKP Securities

A stellar rally across BFSI & Metals powered Indices higher today by 2.3% with the market breadth improving dramatically in Afternoon Trade. Investors cherry-picked into AMC’s, HFC’s and the day also witnessed keen interest in Sugar stocks which recorded handsome gains.

Stocks in Spotlight:

Reliance Industries (RIL) jumped 4.52%. In a BSE filing made after market hours on Tuesday (2 March 2021), RIL said that Reliance Jio Infocomm, a subsidiary of the company, had successfully acquired the right to use spectrum in all 22 circles across India in the recently concluded spectrum auctions conducted by Department of Telecommunications, Government of India. RIL said that the payment to be made for the right to use this technology agnostic spectrum for a period of 20 years is Rs 57,123 crore

Engineers India (EIL) spurted 2.4% after the company secured a deal from Indian Oil Corporation (IOCL) for capacity expansion of Panipat Refinery to 25 million metric tonnes per annum (MMTPA). Indian Oil Corporation (IOCL) awarded a project to EIL for the execution of consultancy for overall project management and EPCM services (Phase-II) for capacity expansion of Panipat Refinery from 15 million metric tonnes per annum (MMTPA) to 25 MMTPA (P-25 project).

Bank of Baroda (BoB) rose 2.88% after the state-run lender said it has closed the qualified institutional placement (QIP) issue, which was conducted to raise up to Rs 4,500 crore. The capital raising committee approved the issue price of Rs 81.70 per equity share (including a premium of Rs 79.70), which is at a discount of 5% (Rs 4.28 per equity share) to the floor price of Rs 85.98 apiece, BoB said in a regulatory filing on Tuesday. The issue opened on 25 February 2021.

IRCON International slumped 7.2% after the offer for sale (OFS) opened for non-retail investors today, 3 March 2021. Through the OFS, the Government of India proposes to sell up to 4,70,25,787 equity shares (representing 10% stake), with an option to sell an additional 6% stake or 2,82,15,473 equity shares in case of oversubscription. The floor price for the OFS is Rs 88 per equity share, at a 10.07% discount to IRCON’s closing price of Rs 97.85 on Tuesday, 2 March 2021. The OFS opened on Wednesday (3 March 2021) for non-retail investors, while both retail as well as non-retail investors will be able to subscribe on Friday (4 March 2021).

Ion Exchange (India) fell 0.9% after Rakesh Jhunjhunwala and his firm Rare Investments on Tuesday sold an aggregate 5.38 lakh shares, or 3.6% stake, in the company via bulk deals on the BSE. Meanwhile, Plutus Wealth Management bought 4.75 lakh equity shares (3.24% equity) of Ion Exchange (India) at Rs 1,220.75 per share.

RPP Infra Projects jumped 3.43% after the company received letter of acceptance for four projects worth Rs 1000 crore.

Economy:

IHS Markit India Services PMI rose to 55.3 in February 2021 from 52.8 in January 2021. The seasonally adjusted India Services Business Activity Index pointed to the sharpest rate of expansion in output in one year. Moreover, the latest reading extended the current growth sequence to five months. Survey participants linked the upturn to improved demand and more favourable market conditions. New work intakes expanded for the fifth straight month, and at the fastest pace over this sequence. According to monitored companies, marketing efforts and increases in new clients led to sales growth.

Meanwhile, the auction of telecom spectrum ended on Tuesday (2 March) with total bids of Rs 77,814.80 crore for the airwaves. Telecommunications Secretary Anshu Prakash said, incremental bids for Rs 668.20 crore were made on the second and concluding day of spectrum auction.

The bidding took place for spectrum in 800-Megahertz, 900-Megahertz, 1,800-Megahertz, 2,100 Megahertz and 2,300 Megahertz bands. The total quantity of spectrum for which right to use has been acquired in these bands is 855.60 Megahertz.

Three bidders, Bharti Airtel, Vodafone Idea and Reliance JioInfocomm participated in the auction. A total quantity of 2,308.80-Megahertz spectrum was put to auction, including spectrum that is expiring up to December this year.

Spectrum Usage Charges for the spectrum acquired in this auction will be payable at the rate of 3% of adjusted gross revenue of the licensee, excluding revenue from wireline services.

Global Markets

Shares in Europe and Asia rallied across the board on Wednesday amid optimism that more imminent U.S. stimulus will energise the global economic recovery. The gains also came as benchmark US government bond yields continued to stabilise after last month’s sell-off.

The Dow Jones Futures were trading 224 points trading higher, indicating a strong opening in US markets today.

China’s Caixin/Markit Services Purchasing Managers’ Index came in at 51.5 for February, a decline from January’s reading of 52. PMI readings above 50 represent expansion while those below that level signify contraction.

Japan’s services sector extended declines in February for a 13th straight month. The final au Jibun Bank Japan Services Purchasing Managers’ Index (PMI) came in at a seasonally adjusted 46.3.

U.S. stocks fell on Tuesday led by technology names, as the market gave back some of the strong gains from the previous session.

In coronavirus developments, U.S. President Joe Biden said Tuesday the country will have a large enough supply of coronavirus vaccines to inoculate every adult in the nation by the end of May – two months earlier than previously expected.

(With inputs from Capital Market)