Zubu Client Sentiment Nifty50 Report & Market Recap (Nov-05-2020)

Zubu Client Sentiment Nifty50 Report:

It is a Post Market Analysis, by which one can understand Retail trader’s sentiment and discover who was going long and short, the percentage change over time, and whether market signals are bullish or bearish.

Zubu Client Sentiment Nifty50 Report (Nov-05-2020)

Nifty50 retail trader data shows 52.32% of traders are net-long ,while the number of retail traders net-short was 47.68%. FII’s created huge longs 25444 & huge shorts unwinding -15421, while retailers are unwinding huge longs -7397 & creating huge shorts 21384.

Market Recap:

Taking cues from the buoyant global markets, the Indian markets delivered impressive gains today. All major sector indices were in the green with strong gains seen in the Nifty Metal (+4.4%) and Nifty Media (+4.0%) indices. The rally in the markets saw strong participation from individual stocks, as 48 of the Nifty50 stocks ended the day in the green. Indusind Bank (+6.1%), Hindalco (+6.0%) and SBI (+5.5%) were the top Nifty gainers today, while only Hero Moto (-0.6%) and HDFC Life (-0.2%) closed in the negative.

HPCL surges on strong results and buyback

State-owned Hindustan Petroleum’s shares rose 9.8% today after it announced a 135% year-on-year rise in net profit and a lucrative buyback proposal. The strong jump in net profit to ₹2,477 crore in Q2 was supported by lower inventory cost and gains in foreign currency transactions. The sale of the company’s petroleum products has nearly back to last year’s levels with easing lockdown restrictions; sales had halved in April 2020. The company will buy back its shares to the tune of ₹2,500 crore at a maximum price of ₹250, at a premium of over 20% on today’s closing price.

SRF hits new high on healthy Q2 performance

SRF, manufacturer of specialty chemicals, packaging films and technical textiles, reported a 57% year-on-year rise in consolidated net profit for Q2. The speciality chemicals business, where operating profit grew 33%, saw higher capacity utilisation, thus leading to operating leverage benefits. Further, better capacity utilisation and focus on higher value-added products resulted in 89% higher operating profit in the packaging films business. Finally, the technical textiles division, which makes raw material for tyres, witnessed a notable 140% rise in operating profit, buoyed by faster-than-expected recovery in the domestic tyre industry. All in all, the company’s performance reflected in its stock price, which rose 9.5% and hit an all-time high. It is interesting to note that SRF’s stock price has risen 37 times in the last seven years.

Cinemas reopen in Maharashtra from today

The Maharashtra government has allowed cinema halls in the state to resume operations from today, at 50% capacity. While people are unlikely to rush to theatres immediately, this development marks a change in the status quo and a positive one at that. Stock markets generally respond well to positive changes, and this was visible in the shares of major multiplex operators, such as PVR (+10.0%) and Inox (+4.5%). Reopening of cinemas in Maharashtra was critical to the movie industry because the state contributes 30–35% of the total box office collections. This reopening comes ahead of Diwali, adding to the festive cheer.

Closing bell

The benchmark indices are just 3% away from the year’s high (which is also their lifetime high). From the lows of March 2020 (when the country went into lockdown), the Nifty50 has risen 61%. These are splendid returns, considering that the rebound took just 7 months, and that too at a time when India saw the worst contraction ever in its GDP (-23.9%). Markets reward turnarounds handsomely and the Q2 results of most companies have shown impressive recovery from a weak Q1. However, amid this global bull run, it is important to take cognisance of two realities. First, the US presidential election frenzy is almost over and, second, the rise in coronavirus cases in the US and Europe continues unabated as winter progresses.