Market Wrap Podcast, May 17: Here's all that happened in the markets today

A sharp drop in Covid-19 cases lifted benchmark indices nearly 2 per cent higher on Monday as investors cheered sooner-than-expected peaking of the second virus wave. The frontline S&P BSE Sensex zoomed 848 points to settle the day at 49,581 levels, lifted largely by financial counters.

Eight of the top 10 index contributors included names like HDFC Bank, ICICI Bank, HDFC, SBI, Axis Bank, and Kotak Mahindra Bank. Reliance Industries and Infosys, meanwhile, were the remaining two contributors.

Analysts attribute this sudden investor interest to the sector's recent underperformance and the resultant sectoral rotation. Over the past two weeks, only three bank stocks -- AU Small Finance Bank, RBL Bank, and SBI -- outperformed at the bourses, rising between 2.5 per cent and 3.5 per cent on the NSE as against a 1.25 per cent rise in the frontline Nifty50 index.

That apart, while ICICI Bank and The Federal Bank gained 1 per cent and 0.25 per cent, respectively, all other Nifty Bank constituents declined in the range of 0.11 per cent and 12 per cent. The Nifty Bank index too slipped 0.31 per cent during the period.

That apart, India, on Monday, reported over 281,000 fresh cases taking total infections to 24.96 million. New cases fell below 300,000 for the first time in 25 days as the country seeks to scale up vaccinations. Analysts believe investors are seeing this as an early sign of Covid cases peaking out which could limit the dent on the financial sector.

On the NSE, the Nifty50 reclaimed the 14,900-mark and ended at 14,923 levels, up 245 points. About 39 of the 50 constituents ended the day in the green including IndusInd Bank (up 7.5 per cent), SBI, ICICI Bank, HDFC Bank, UPL, Axis Bank, Tata Motors, and Eicher Motors.

On the downside, Cipla, L&T, Bharti Airtel, Nestle India, Sun Pharma, HDFC Life, and Maruti Suzuki were the top laggards, down up to 2.4 per cent.

In the broader market, the S&P BSE MidCap and SmallCap indices ended 1.6 per cent higher, each lifted by stocks such as Hester Biosciences and Gokaldas Exports.

Shares of Hester Biosciences were locked in the 20 per cent upper circuit band, at Rs 2,964 on the BSE, and up 34 per cent in the past two trading days, after the pharmaceutical company said it has tied up with the Gujarat government to explore the production of Covid-19 vaccine through technology transfer from Bharat Biotech. The Ahmedabad-based firm said it has already initiated discussions with Bharat Biotech in this regard.

Those of Gokaldas Exports, meanwhile, hit an over three-year high of Rs 127 apiece after they rallied 20 per cent in Monday's intra-day trade on the BSE as the company's profit after tax jumped three-fold to Rs 16 crore for quarter ended March 2021 (Q4FY21). It had posted a PAT of Rs 6 crore in Q4FY20. The stock of the textiles company was trading at its highest level since January 2018.

On the sectoral front, all but the Nifty Pharma index ended the day with gains. The Nifty Bank index added 4 per cent on the NSE today, trailed by the Nifty Financial Services index (up 3 per cent), and the Nifty Metal index (up 2.5 per cent). On the contrary, the Nifty Pharma index slipped 0.2 per cent on profit booking.

On the results front, Bharti Airtel today reported a consolidated net profit of Rs 759 crore for the quarter ended March 31, 2021 as against a loss of Rs 5,237 crore during the same period, a year ago. Its revenue from operations rose 12 per cent to Rs 25,747 crore while Mobile ARPU rose to Rs 145 from Rs 135 YoY. Ahead of the announcement, shares of the telecom firm settled 2 per cent lower on the BSE.

Colgate Palmolive, on the other hand, posted a 54 per cent YoY growth in net profit at Rs 315 crore for Q4FY21. It's revenue increased 19 per cent on year to Rs 1,283 crore, while margins expanded 840 bps to 33 per cent.

Global markets
 

European stocks dipped on Monday after staging a sharp recovery late last week, as underwhelming Chinese data and a resurgence of Covid-19 cases in some Asian countries outweighed optimism over the reopening of the British economy. The pan-European STOXX 600 index slipped 0.1 per cent.

In Asia, Japan's Nikkei dropped 0.9 per cent and South Korea's Kospi slipped 0.6 per cent. China's CSI30 index and Hong Kong's Hang Seng, on the other hand, added 1.5 per cent and 0.6 per cent, respectively.

Futures of all the three main Wall Street indices were last trading 0.3 per cent lower each, indicating a weak start later today.