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Domestic Indices Play With Positive Vibes

Domestic Indices Play With Positive Vibes

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The last few years had been a bumpy ride for small-cap stocks. This year, unexpectedly, the small-cap stocks have not only recouped the losses but also overshadowed the previous peaks

The domestic markets are portraying an unbreakable nature despite the second wave of the pandemic. The Indian equity markets have been surging upwards recently with the key indices Sensex and Nifty touching fresh highs, barely reacting to the impact on economic activities due to the second wave. During the fortnight, Sensex gained 1.18 per cent whereas Nifty was up by 1.47 per cent. The fortnightly data says that sectoral indices outperformed the domestic benchmark indices. The recent fortnight saw the highest rise in the small-cap index at 6.27 per cent. Small-cap stocks are surfing the high tide and this positive trend is global in nature.

The last few years had been a bumpy ride for small-cap stocks. This year, unexpectedly, the small-cap stocks have not only recouped the losses but also overshadowed the previous peaks. While the small-cap index gave handsome returns, BSE Mid-Cap index rose by 4.65 per cent. On the sector front, Nifty Power clocked gains of 5.28 per cent and hit its 10-year high, thus rewarding investors with handsome returns. The key reason for the surge in the power index can be due to the discussion paper released by the Ministry of Power regarding the implementation of market-based economic dispatch (MBED).

This will benefit generation and distribution companies, resulting in more efficient utilisation of low-cost generating capacity across the country. Meanwhile, the realty index jumped 4.63 per cent during the fortnight. Investors are feeling an increasing confidence level over housing sales trajectory. Also, companies with land banks of substantial size are likely to benefit from re-rating in the future, which has infused some positive sentiments for the realty index. The IT index reported a rise of 4.51 per cent owing to the fact that IT companies are trying to digitalise their revenue flows in a huge way. Going forward, good revenue visibility and opening up of the US economy is predicted to augur well for IT companies.

On the BSE, the healthcare Index and the automotive index rose by 3.95 per cent and 2.33 per cent, respectively. BSE Metal was up by 2.88 per cent. The metal stocks faced some pressure due to a predicted hike in steel prices and potential easing of restrictions on steelmaking in Tangshan, China. The FMCG index chose to remain calm and improved merely by 1.31 per cent during the fortnight. The only index which ended in the red during the fortnight was Nifty Bankex, which narrowed by 1.91 per cent. Trading data shows that FIIs were net buyers to the tune of Rs 16,329.45 crore while DIIs were net sellers to the tune of Rs 1,081.83 crore during the fortnight.

 

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Privatization bound BPCL Board approves of the amalgamation of BORL

Amalgamation is expected to enhance the valuation of BPCL bound for privatization but rising fuel prices may act spoiler.

Shreya Banthia / Article rating: 5.0

In the Board Meeting held on October 21, the scheme of amalgamation has been approved by the members. The amalgamation will consolidate BPCL’s presence in Bina facilitating future expansion and diversification in the region. BPCL, which is a Maharatna PSU holds 14-15 per cent of the country’s total refining capacity. Amalgamation is expected to enhance the valuation of BPCL bound for privatization by enhancing its refining capacity. 

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