Dalal Street’s sharp U-turn costs investors Rs 2.5 lakh crore amid rising yields, Covid-19 cases

Admin18 March 2021

4 5 minutes read

NEW DELHI: A revolt against the Federal Reserve by bond investors in the US sent Dalal Street sharply lower on Thursday, with benchmark indices extending their losses to a fifth straight day. Rising Covid-19 cases across India also hurt market sentiment.

The Indian market has in recent times witnessed higher volatility compared to its global peers as domestic investors turned extra cautious on increasing coronavirus cases in the country and a fall in FII inflows.

The 30-share pack Sensex sank 585.10 points or 1.17 per cent to close at 49,216.52. The index gyrated in a 1,334-point range during the day. Its broader peer NSE Nifty tumbled 163.45 points or 1.11 per cent to settle at 14,557.85.

“Indian equities pared its early optimism and fell into a sharp correction as US bond yield rose to its highest level since January. Dovish comments from the Fed chief on the strong economic bounce back and continuation of its accommodative stance, could not weigh down the rally in the US bond market,” said Vinod Nair, Head of Research at Geojit Financial Services.

Investors’ wealth fell by Rs 2.48 lakh crore as the total market capitalisation of BSE-listed firms declined to Rs 201.22 lakh crore.

Market at a glance

BHEL surges 4% on bagging NPCIL tender worth Rs 10,800 crore
IPO watch: Suryoday subscribed 0.8x; Nazara 10x; Kalyan 2x
ITC climbs 4% after Morgan Stanley initiates coverage with ‘overweight’
FMCG, metals stocks show resilience, respective indices end in green
IT services stocks among the worst hit; RIL hammered as well

Among the blue-chip counters, ITC was the top gainer, rising 3.99 per cent. Bajaj Auto, Hindalco, Grasim Industries, Bharti Airtel, M&M, Tata Motors, Bajaj Finance and Maruti Suzuki were the other gainers.

HCL Tech was the top loser in the Nifty pack, falling 3.47 per cent. Infosys, Divi’s Laboratories, Dr Reddy’s Labs, Hero Moto, TCS and Reliance Industries were other stocks that ended in the red.

10 stocks that top mutual funds bought & sold in February

Portfolio reshuffle

As the equity assets under management (AUM) of mutual funds touched a new record high of Rs 10 lakh crore in February, money managers hiked allocation to stocks from sectors such as PSU banks, private banks, oil and gas, capital goods and utilities, and decreased weights in technology, auto, consumer, healthcare and telecom. With an allocation of 18.4 per cent in their portfolios, private banks were the top holding for mutual funds in February 2021, followed by technology (10.9 per cent), NBFCs (8.9 per cent), and oil & gas (7.2 per cent). Here is a list of 10 stocks that mutual funds bought and sold the most, according to a report by Motilal Oswal.

Tata Motors

Tata Motors, in which ace investor Rakesh Jhunjhunwala bought a stake last year, appeared to be the favourite of fund managers in February. Cumulatively, the holding of all mutual funds in Tata Motors went up by 13.3 per cent on a month-on-month basis. HDFC Mutual Fund bought 74,09,000 shares while Canara Robeco bought 40,00,000 shares of the Tata Group company. Several brokerages have maintained a bullish view on the automaker, citing sales recovery, improving margin, thrust on EVs, and its plans to turn debt-free by FY24.

IndusInd Bank

Mutual funds increased their holding in IndusInd Bank by 10.9 per cent, their second highest conviction bet in the month. Nippon India bought 18,98,000 shares of the blue chip, while UTI bought 257,000 shares and Invesco 11,40,000 shares. Last month, Morgan Stanley had retained its ‘overweight’ call on IndusInd Bank while global brokerage CLSA had recently maintained its bullish stance with a target price of Rs 1,325. In the last one year, the stock has gained about 55 per cent.

NTPC

Fund managers raised their bets by 3.8 per cent on NTPC during the month. At least four mutual fund houses have exposure of more than 2 per cent in the PSU stock. NTPC was the seventh largest investment for HDFC Mutual Fund that bought 1,87,06,000 shares of the power major in February. Other buyers include Nippon India, ICICI Prudential, Aditya Birla Sun Life and Franklin. In the last one month, the stock has gone up by over 11 per cent but has underperformed the benchmark indices in 1-year, 3-year and 5-year timeframes.

Eicher Motors

Eicher Motors, the maker of Royal Enfield bikes, was the third largest buy for mutual funds as their investment in the stock shot up by 3 per cent. Besides other fund houses, Tata Mutual Fund bought 376,000 shares of the auto stock that has been underperforming after its Q3 results. In the last 1 month, the stock has lost over 2 per cent of its market value.

Broader market indices ended with cuts in line with their headline peers. Nifty Smallcap declined 1.28 per cent and Nifty Midcap slipped 1.37 per cent. Nifty 500 — the broadest index on NSE — fell 1.18 per cent.

BHEL, Endurance Technologies, Cummins India, Dixon Tech, India Energy Exchange and Graphite India were top gainers from the mid- and small-cap indices, climbing in the range of 1-6 per cent.

KEI International, Delta Corp, Rashtriya Chemicals, Syngene, Edelweiss Financials Services and Dhani Services were major losers from the broader market space, falling in the range of 4-7 per cent.

Barring Nifty FMCG and Nifty Metal that rose marginally, all sectors ended the day with losses. Nifty IT plunged the most at 3.09 per cent. Nifty Pharma followed with a decline of 2.32 per cent. Banking indices were other major losers.

“With all the major events behind us, global cues and COVID-19 updates will dictate the trend. Traders should maintain extra caution and limit leveraged positions.”

— Ajit Mishra, Religare Broking

Market breadth was in favour of losers as 821 stocks ended in the green, while 2,160 counters settled with cuts. As many as 145 securities hit 52-week highs, mostly from the small-cap space. Meanwhile, 52 scrips hit 52-week lows, mostly from the micro-cap space. About 210 stocks hit upper circuit limits and 389 lower circuit limits.

European markets were trading higher at the last count. London-based FTSE was up 0.10 per cent, while Paris and Frankfurt added 0.21 per cent and rose 1.13 per cent, respectively. In Asia, all markets registered gains, led by Hong Kong, which climbed 1.28 per cent.

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Admin18 March 2021

4 5 minutes read