Market Digest – 21 October 2024
Welcome to the Market Digest, where we cover the key updates from the market and beyond.
Market Overview
- Sensex: 81,151.27 ▼ 0.09%
- Nifty 50: 24,781.10 ▼ 0.29%
The markets opened on a high note today, with Nifty 50 starting above yesterday’s close. However, by 9:32 AM, it dipped below that level and stayed in the red for the rest of the day. The auto and financial services sectors were the only ones in the green, while media stocks saw the steepest decline.
Global Markets
- US Markets: Flat
- European Markets: Down
- Other Asian Markets: Mixed
Top Gainers
- Bajaj Auto: ₹10,500.50 ▲ 4.34%
- HDFC Bank: ₹1,728.70 ▲ 2.79%
- Asian Paints: ₹3,049.20 ▲ 1.91%
- M&M: ₹2,998.20 ▲ 1.15%
- Eicher Motors: ₹4,810.45 ▲ 0.94%
Top Losers
- Tata Consumer: ₹1,017.05 ▼ 6.97%
- Kotak Mahindra: ₹1,789.20 ▼ 4.37%
- Bajaj Finserv: ₹1,758.40 ▼ 3.38%
- BPCL: ₹331.65 ▼ 3.17%
- IndusInd Bank: ₹1,308.25 ▼ 2.89%
Key News Updates
- People’s Bank of China reduced its key lending rates. The 1-year rate is now 3.1% (from 3.35% in September), and the 5-year rate is now 3.6% (from 3.85%).
- Waaree Energies IPO has been subscribed 3.32 times, with a retail subscription of 3.17 times. The IPO is open until 23rd October.
- Deepak Builders & Engineers IPO is seeing higher demand with a 4.12 times subscription rate, including 6.12 times from retail investors. It is open for subscription till 23rd October.
Stocks to Watch
- Tech Mahindra: The company reported a 153% YoY rise in net profit to ₹1,250 crore for the July-September quarter. A dividend of ₹15 per share has been declared, with the record date set for 1st November.
- Kotak Mahindra: Reported a 13% YoY increase in net profit to ₹5,044 crore for the same quarter.
- Oberoi Realty: The launch of its new residential project in Thane has resulted in booking orders worth ₹1,348 crore.
- UltraTech: The cement giant posted a 36% YoY drop in net profit, totaling ₹820 crore.
- JSW Energy: Its subsidiary, JSW Neo Energy, will acquire three subsidiaries from Hetero Group for ₹630 crore. Together, these subsidiaries hold 125 MW of wind energy capacity.
- Hindustan Zinc: The company reported a 34.59% YoY rise in net profit, totaling ₹2,327 crore.
- CG Power: Posted an 8.77% YoY decline in net profit to ₹221 crore. The company also plans to raise up to ₹3,500 crore via a Qualified Institutional Placement (QIP).
- Garden Reach Shipbuilders: Secured a ₹491 crore order from DRDO to build and supply an Acoustic Research Ship.
Word of the Day: Economies of Scale
Economies of scale refer to the cost advantages that companies experience as their production levels increase. When companies produce more, their per-unit costs decrease. For example:
- A small company may produce 100 bulbs at ₹400 each, while a larger company produces 1,000 bulbs at ₹100 each.
- Large retailers like Walmart can buy in bulk, reducing costs and allowing them to offer lower prices than smaller stores.
Market Course: Stock Exchange Explained
In this week’s course, we’ll explore the stock exchange, a term familiar to most investors. A stock exchange is essentially a marketplace where buyers and sellers meet to trade stocks quickly and efficiently.
For instance, if there were no exchange for stocks, the process would resemble buying or selling a house—taking weeks or months. The stock exchange simplifies this by enabling trades in seconds.
Featured Question: Mutual Fund Dividends
Q: “How are dividends treated in mutual funds? Are they distributed to investors, or reinvested?”
A: In most mutual funds, dividends are reinvested into the same fund, increasing the Net Asset Value (NAV). NAV is the price of one unit of a mutual fund.
Commodities and Currency Update
- 10g Gold: ₹78,280 ▲ 1.02%
- 1kg Silver: ₹97,890 ▲ 4.95%
- USD-INR: ₹84.07/USD ▲ 0.00%
A fall in the USD-INR rate signals the Rupee strengthening against the dollar, while a rise indicates a weakening of the Rupee.
Long-Term Returns
Over the past 20 years, these indices have delivered impressive returns:
- Sensex: ▲ 14.26% p.a.
- Nifty: ▲ 14.07% p.a.
- Dow Jones: ▲ 7.62% p.a.
- Nasdaq: ▲ 11.91% p.a.
(Note: Returns for Sensex and Nifty are in INR, while Dow Jones and Nasdaq are in USD, making them not directly comparable.)
Stay informed, invest wisely, and keep an eye on the markets!