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Nifty holds 17,700 amid volatility; energy stocks rally

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Capital Market
Last Updated : Sep 29 2021 | 4:04 PM IST
Key indices ended with modest losses on Wednesday. The Nifty held above 17,700 mark after hovering in a range of 17,608.15 and 17,781.75. A spike in U.S. benchmark bond yields and a strong dollar capped gains in equities.

As per the provisional closing data, the barometer index, the S&P BSE Sensex, closed at 59,413.27, down 254.33 points or 0.43%. The Nifty 50 index fell 37.30 points 0.21% to 17,711.30.

Energy stocks rallied as China is facing a severe shortage of both coal and electricity as the economy has resumed strong growth post Covid-induced lockdowns, but coal mine output has failed to keep up with demand.

NTPC (up 6.4%), Coal India (up 6.22%), PowerGrid Corporation of India (up 5.68%), Indian Oil Corporation (up 4%) and Hindalco (up 3.5%) were top gainers in Nifty 50 index.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index was up 0.62% while the S&P BSE Small-Cap index rose 0.4%.

The market breadth was positive. On the BSE, 1920 shares rose and 1310 shares fell. A total of 167 shares were unchanged.

COVID-19 Update:

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Total COVID-19 confirmed cases worldwide stood at 232,730,064 with 4,764,388 deaths. India reported 282,520 active cases of COVID-19 infection and 447,751 deaths according to the data from the Ministry of Health and Family Welfare, Government of India.

A total of 87,74,59,487 COVID-19 vaccine doses have been administered in the country so far, with over 53.99 lakh doses being given yesterday, according to the Co-WIN dashboard.

SEBI Framework for Gold And Social Stock Exchanges:

Stock market regulator Securities Exchange Board of India (SEBI) has approved the frameworks for gold exchange and Social Stock Exchange. The market regulator also approved amendments to delisting framework for equity shares at the board meeting held yesterday.

A gold exchange is being set up to trade the yellow metal in the form of electronic gold receipts, which will help in having a transparent domestic spot price discovery mechanism. The instrument representing gold is to be called Electronic Gold Receipt (EGR), and will be having trading, clearing and settlement features akin to other securities.

In a statement, SEBI said the Gold Exchange, encompassing the entire ecosystem of trading of EGR and physical delivery of gold, is expected to create a vibrant gold ecosystem in the country. The Gold Exchange would be a national platform for buying and selling EGRs with underlying standardized gold in India and also create a national pricing structure for gold.

SEBI has also allowed the introduction of silver exchange traded funds (ETFs) in India. The Sebi board approved the amendment to Sebi (Mutual Funds) Regulations, 1996 to enable the introduction of Silver ETFs. These will be in line with the regulatory mechanism for gold ETFs.

Under the creation of Social Stock Exchange (SSE), the SEBI board said it will be used for purpose of fund raising by social entrepreneurs. SSE will be a separate segment of the existing stock exchanges.

Primary Market:

Aditya Birla Sun Life AMC IPO opened for subscription from Wednesday (29 September) and it will close on Friday (1 October). The company is offering 38,880,000 shares (including anchor portion of 11,080,800 equity shares) in the price band of Rs 695 to Rs 712 per share.

As on 15:00 IST, the IPO received bids for 1.03 crore shares as against 2.77 crore shares on offer. The issue was subscribed 0.37 so far.

The offer comprises of offer for sale comprises sale of 28,50,880 equity shares by Aditya Birla Capital (ABCL) and up to 36,029,120 equity shares by Sun Life AMC. Up to 1,944,000 equity shares have been reserved for allocation to ABCL shareholders. The IPO is a complete offer for sale by existing shareholders and the company will not directly receive any proceeds from the offer.

The company expects that listing of the equity shares will enhance visibility and brand image and provide liquidity to shareholders and will also provide a public market for the equity shares in India.

Aditya Birla Sun Life AMC is currently a 51:49 joint venture between Aditya Birla Capital (ABCL) and Sun Life AMC. The company is the fourth largest asset management companies (AMCs) in India by quarterly average asset under management (QAAUM) since September 2011 and its also the largest non-bank affiliated AMC in India since March 2018.

Stocks in Spotlight:

Godrej Properties surged 3.44% after the real estate company said that it has entered into an agreement to redevelop a land parcel in the upscale neighborhood of Wadala, Mumbai. The land parcel is spread across 7.5 acres and this project will offer approximately 0.15 million square meters (approximately 1.6 million square feet) of saleable area comprising primarily of residential apartments of various configurations. The land parcel is situated in a marquee residential location and is in very close proximity to Matunga Five Gardens.

Max Healthcare Institute fell 3.49% after series of bulk deals in early trade. The media reported that Kayak investments Holdings, an affiliate of American private equity major KKR, is selling as much as 6.34 crore shares or 6.57% of Max Healthcare at an indicative price range of Rs 350-369.70 per share, a discount of about 5.3% to the scrip's closing price on Tuesday. The base deal size is Rs 2,220 crore.

HDFC Asset Management Company (HDFC AMC) fell 5.47% after series of bulk deals in early trade. The media reported that promoter Standard Life Investments will sell up to 5% of its stake in HDFC AMC, through a block deal for as much as Rs 3,042 crore. Standard Life is offering a total of 1.06 crore shares in the secondary trade at a floor price of Rs 2,870 each, a discount of 6.69% to the closing price of Rs 3,075.65 on Tuesday.

BLS International Services added 3.17% after the company won the contract with Embassy of Italy in Russia for visa processing for a period of 5 years in partnership. Under the contract, the company is expected to process approx. 1,40,000 applications every year with 20 centres across Russia.

Lupin fell 0.04% after the drug company said that the company has launched Droxidopa capsules in the United States, having received an approval from the United States Food and Drug Administration (US FDA). Droxidopa capsules is a generic equivalent of Northera Capsules of Lundbeck NA.

HCL Technologies was up 1%. The IT company joined the AWS Service Delivery Program and become an AWS Contact Center Intelligence Partner.

Bharti Airtel fell 0.19%. CRISIL upgraded long-term rating on bank loan facilities of Rs 20,000 crore to AA+/Stable from AA/Stable. The rating action reflects continued improvement in Bharti Airtel's operating metrics resulting in healthy financial risk profile.

Global Markets:

The US Dow Jones index futures were up 190 points, indicating a rebound in US market today.

European shares were trading higher on Wednesday. Most Asian stocks declined, following an overnight tumble on Wall Street.

European market attention will be on central banks today with U.S. Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde, Bank of Japan Governor Haruhiko Kuroda and the Bank of England's Governor Andrew Bailey all speaking at the ECB Forum on Central Banking on Wednesday.

U.S. stocks fell sharply on Tuesday, with tech names dragging down the broader markets as Treasury yields traded near three-month highs and lawmakers in Washington continued their budget stalemate.

Rising bond yields hurt growth stocks because they lower the relative value of future earnings, and make the popular stocks appear overvalued.

Also weighing on sentiment was a budget showdown in Washington. Senate Republicans blocked a House-passed bill Monday that would have funded the government into December and suspended the debt ceiling until December of 2022.

Congress must approve government funding by Friday to avoid a shutdown, and Treasury Secretary Janet Yellen warned Congress in a letter on Tuesday that lawmakers need to raise the debt limit by October 18 to avoid a government default. President Biden's massive infrastructure plan also faces an uncertain future.

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First Published: Sep 29 2021 | 3:36 PM IST

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