Market Performance in January 2021

Market Update:

Nifty 50 declined 2.1%, while BSE Sensex lost 2.8% on MoM basis in January 2021.

Global market sentiments have been sluggish due to stalled vaccine rollouts in the west and contagious new corona virus strains.

Indian markets too lost their momentum as market participants turned cautious ahead of the Union Budget on February 1, 2021.

Broader markets attempted to be resilient during the month as investors kept searching value in the mid and small cap space.

FIIs bought ?14,512cr (vs. ?53,500cr bought MoM) in Indian equities, while DIIs sold ?15,725cr worth of equities (vs. ?26,514cr sold MoM) during the month.

Fixed Income Market

In January 2021, India’s 10-year bond yields remained flat at around 5.9% despite RBI’s intent to normalize short term rates.

However, the central bank reiterated its commitment to remain accommodative and maintain excess liquidity to support economic growth.

Although December retail inflation cooled off to 4.6% and was within the RBI’s target range (4%+2%), the possibility of rate reduction is negligible and there is upside risk due to inflation strengthening on the back of increasing commodity prices.

Stock Performance:

The market witnessed huge volatility in January 2021 ahead of the union budget 2021. Below are the top 10 gainers and losers on Nifty 100 in January 2021.

Gainers

Source: Ace Equity

Tata Motors Ltd.
The stock gained 40.9% in January 2021 on continuous efforts of management on debt reduction and improving operating margins. Additionally, there were also rumours in January 2021 that Tata Motors is partnering with Tesla, which further pushed the share price higher.

UPL Ltd.
The stock rose 19.5% on NSE due to heavy volume on the exchange. A few weeks ago the company had successfully redeemed $410 million worth of dollar-denominated bonds before their due date of October next year. The move, it said, was in-line with the company's earlier commitment to reduce its overall debt and was seen addressing one of investors' key concerns.

Bajaj Auto Ltd:
The stock gained 15.1% on account of strong quarterly results.

Hindustan Zinc Ltd.
The stock gained 14.9% on account of strong quarterly results.

Havells India Ltd
The stock gained 14.8% on account of strong quarterly results. In its investor presentation, Havells said that the encouraging business performance with growth across divisions and regions led by an improvement in consumer sentiment and festive season.

Grasim Industries Ltd.
The stock jumped 13.1% on NSE as it announced that it was getting into the business of manufacturing paints.  

Eicher Motors Ltd.
The stock jumped 7.9% as brokerage firms maintained outperform rating on the stock.

Losers:

Source: Ace Equity
 

Bandhan Bank Ltd.
The shares plunged 22.7% in January 2021 due to weak quarterly result and brokerages raise concerns over credit cost.

Biocon Ltd.
The stock fell 20.2% in January due to weak quarterly results.

Kotak Mahindra Bank Ltd.
The stock fell 14.1% as investors expressed concerns over the level of bad loans held by India’s third-largest lender by market value.

ICICI Lombard General Insurance Co Ltd.
The stock declined 13.4%. It is likely due to fall in Nifty Finance Index. The index was down 3.9% in January 2021

Dr. Reddys Laboratories Ltd.
The shares plunged 12.2% due to weak quarterly result. The profits were impacted due to trigger based impairment charge taken on a few acquired products, including gNuvaring.

Disclaimer: The above report is compiled from information available on the public platforms. These are not buy or sell recommendations.