New fiscal may see positive beginning for markets

KS Badri Narayanan Chennai | Updated on April 01, 2021

But economic recovery and rising Covid cases worry investors

Markets are likely to open on a positive note on the first day of the new fiscal, despite uncertainty over economic recovery and rising number of Covid-19 cases continuing to weigh on investors’ minds. The SGX Nifty at 14,857 indicates that the Nifty may open with a gain of about 100 points. The Nifty April futures on Wednesday closed at 14,752 on the NSE. High corporate tax rate in the US by Biden administration will also impact market sentiment, both at the global and domestic levels.

Analysts are wary of fast-phased recovery in the economy, following the disappointing core industrial data. “The core sector data released for February 2021 reinforces the concerns on the pace of the industrial recovery and the likelihood of meaningful positive GDP growth in Q4FY21. With the overall core sector index witnessing a YoY decline of 4.6 per cent, the risks of a material contraction in IIP for the month, on the back of a 1.6 per cent decline already seen in January 2021, has visibly increased,” said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.

Also read: Dollar holds near multi-month high on US growth bets

Asian stocks too jumped in early trade on Thursday with Nikkei leading from the front, gaining 1.2 per cent. Hong Kong, Korea, Australia and Taiwan markets are up around 0.5 per cent. Overnight, US stocks ended on a mixed note with the tech-heavy Nasdaq surging strongly by 1.5 per cent, even as Dow Jones Industrial Average slipped.

US President Joe Biden unveiled a $2.25-trillion US infrastructure plan on Wednesday that the administration says will prove the most sweeping since investments in the 1960s space program and 1950s interstate-highway system. However, increase of corporate tax rate to 28 per cent from 21 per cent and changes in the tax code to plug the loopholes that allow companies to move profits overseas will keep US stocks on edge, say analysts.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: “With the financial year ending, investors would now focus on upcoming quarterly results which would kickstart from mid-April. Domestically, concerns over the fast spreading second wave of Covid-19 in India continues to remain and the fear of possible lockdowns prevail. Overall markets are likely to remain in a consolidative mode for some time awaiting fresh positive triggers.”

The long weekend (Friday is a holiday due to Good Friday), will also keep traders’ interests low in the second half of the session.

Stock To watch

Auto stocks: With FY2021 coming to an end, automobile majors such as Tata Motors, Maruti Suzuki, M&M, Ashok Leyland, Escorts, Eicher Motors, Bajaj Auto, TVS Motor and Hero MotoCorp will announce their sales figures for March. Though the expectation is that most companies may announce better numbers due to year-end push, some are still sceptical of recovery in the sector.

Piramal Enterprises Unit Piramal Pharma will acquire 100 per cent Stake In Hemmo Pharmaceuticals for an upfront cash consideration of ₹775 crore.

Dhampur Sugar Mills has acquired 100 per cent shareholding RMSD Enterprises Private Limited. Consequently, RMSD Enterprises Private Limited has become a wholly-owned subsidiary of the company. The entity has been recently incorporated in October 2020 and its objects will be changed to manufacturing, producing and dealing in sugar, chemicals including ethanol, ethyl, etc. and co-generation of power in line with the current business of the holding company, i.e. Dhampur Sugar Mills Limited.

Axis Bank has entered into a share purchase agreement for sale of 100 per cent stake in its subsidiary, Axis Bank UK Limited to OpenPayd Holdings Ltd. This transaction is subject to approval by the UK Financial Regulator, the Prudential Regulation Authority (PRA).

3i Infotech has completed the slump sale of the global software products business of the company (including its worldwide subsidiaries other than the sale of such business of its subsidiaries in Saudi Arabia and Thailand, the completion of which is to occur separately, subject to regulatory approvals) on a going concern basis to Azentio Software Private Limited (and its affiliates) (Buyer), pursuant to inter alia the business transfer agreement dated December 28, 2020, executed between the company and the buyer.

Likhitha Infrastructure Limited has received a contract of ₹34.63 crore (excl. of GST) from Indian Oil Adani Gas Private for laying pipeline from Thrissur Geographical Area to Ernakulam Geographical Area. Accordingly, the company has received total orders/contracts worth ₹234.85 crore during the quarter January 2021 to March 2021.

Rossari Biotech Ltd, a speciality-chemicals manufacturer providing intelligent and sustainable solutions for customers across industries, has today announced that it has fully operationalised all phases of its greenfield manufacturing facility at Dahej, Gujarat, successfully. The facility will be further augmented by R&D, automation, administration, and other corporate facilities in the coming quarters.

Welspun India Limited has prepaid term loans of ₹374.27 crore as on March 31, 2021, along with other instalments which were due as on the year-end on standalone basis. With this prepayment, the outstanding term loan on standalone basis as on March 31, 2021, stands at ₹359.99 crore versus ₹1,023.57 crore as on March 31, 2020. The weighted average interest rate of the loans prepaid by the company was 8.48 per cent per annum.

Shilpa Medicare: The board of Shilpa Medicare has approved the sale of Loba Feinchemie GMBH (a company in Austria), a step-down wholly-owned subsidiary of the company and to enter into a share purchase agreement thereto. The turnover of Loba Feinchemie GMBH for FY2019-20 was 5.53 per cent (₹50.19 crore) of the consolidated turnover of Shilpa Medicare Limited (₹908 crore.) Total consideration to be received from the sale is €3.3 million (approx. ₹28 crore.)

Published on April 01, 2021

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