Summary:
Indian markets traded higher amid improving global sentiment following reports of a potential US-Iran peace agreement. Lower crude oil prices supported investor confidence and boosted benchmark indices. Among individual stocks, MMTC surged on expectations of higher business from the Delhi-NCR vehicle scrappage policy, while Dr Lal PathLabs gained on its Dubai expansion plans. Devyani International and Sapphire Foods advanced after receiving regulatory approvals related to their proposed merger. On the downside, GIC Re, NALCO and VAML witnessed selling pressure due to stake sale concerns and profit booking.
India’s equity markets maintained their upward momentum on Tuesday amid positive risk sentiments in the global market following the news of an early draft of the peace deal between the US and Iran. This led to a drop in oil prices and helped lift the investors’ sentiments as well.
Nifty 50 Index was up by 0.29% at 23,922.6 while Sensex was up 0.37% at 76,538.35 as of 9:45 AM IST. Even though the markets were positive overall, there were some stocks where positive or negative news and high volumes of trade caused wild swings.
MMTC Surges 8% on Vehicle Scrappage Opportunity
Among the other stocks that made impressive gains was state-owned MMTC Ltd, whose stock climbed by 8% on heavy buying interest. Its trading volume shot up dramatically, with approximately 2.42 crore stocks being traded on the NSE as opposed to its 30-day average volume of 75.98 lakh stocks.
The rise in MMTC’s share price was driven by expectations regarding the approval of the vehicle scrappage scheme for Delhi-NCR, which seeks to scrap almost 2.07 lakh old commercial vehicles, consisting mainly of 1.91 lakh trucks and 16,329 buses. Given the fact that MMTC is heavily engaged in organizing auctions for the disposal of end-of-life vehicles and their scrap for the government and public sector undertakings, the scheme promises a boost to business volumes for the firm.
Dr. Lal PathLabs Rallies on Dubai Expansion Plans
Another exceptional performer that posted a gain of 8% during the week is Dr. Lal PathLabs. This occurred after the announcement by the company about the launch of its strategy for global growth. Trading volumes rose by almost double, with trading in 12.1 lakh against the average of 6.3 lakh.
The company had earlier set up its wholly-owned subsidiary Dr. Lal PathLabs FZCO in Dubai. The role of the subsidiary would be to offer diagnostic services along with acquisitions and other strategic moves.
Devyani and Sapphire Gain on Merger Progress
Devyni International and Sapphire Foods witnessed an increase of more than 5 percent each to be one of the largest gainers in the Nifty 500.
Investor sentiment was lifted by the regulatory approvals acquired by both firms in connection with their intended merger. Devyani International got “no objection” approval from NSE and BSE observed no adverse observations in its letter. This was a big win for the two firms.
The merger is expected to result in the formation of a bigger and more robust quick-service restaurant platform. The brands operated by Devyani International include KFC, Pizza Hut, and Costa Coffee, while Sapphire Foods is a leading franchisee for KFC and Pizza Hut restaurants in India.
GIC Re, NALCO and VAML Among Top Losers
The fall on the other hand is seen as the GIC Re falling by 5.87% after the Indian government initiated a sell-off offer in the company by selling up to 5% stake at a floor price of ₹352 per share. Discounted price level in the share made it difficult for investors to invest leading to falls in the share price.
The NALCO shares fell by 5.61% and no such announcements were seen by the company in which case, the drop in the share value is due to some profit booking activities and also due to weakness in the metal segment.
The Vedanta Aluminium Metal Limited (VAML) dropped by 5%. This is mainly because the company is known to have listed and demerged from Vedanta with huge profit levels that attracted the buyers and hence, the company is facing some profit booking pressures.
The fall can be attributed to many factors including company related announcements, mergers and expansion plans.
