The Trend of Investors in Domestic Equity Stocks

Sensex drops by 13.20 points. This performance of the stock market is showing a drop of 0.03% in Sensex is primarily coupled with the Delta variant of the coronavirus. Due to this variant, all domestic equities are expected to be on the down-low for the coming week. Facing such situations during Zomato IPO Week is an important aspect that experts are noting. Despite several active vaccines out in the market, many are concerned about the new Delta variant. The primary reason behind this is the lack of effectiveness of vaccines with new variants.

While the stock market experienced an influx of novice investors, the valuation of the stock market on the whole increased. However, with new coronavirus variants making an entry, the stock market has seemed bleak without plenty of optimism. Several investors tend to shy away from investing in equity shares due to uncertainty and a severe plunge in the market.

Performance of Indices

On the 12th of July 2021, all indices closed flat. Sensex closed at ₹52,372.69 which is a decrease of 13.5 points from the start of the trading day. This decrease in 0.03% of the valuation of Sensex was one of the primary reasons that caused several investors to refrain from investing in the market. In contrast, Nifty rose by 2.80 points and closed at ₹15,692.20. To the surprise of many, the metal and IT industries were top drags.

On the 30-share sensex, the State Bank of India, ICICI Banks, Ultratech, and 14 other equity stocks closed in green. However, Infosys, Tata Steel, Bharti Airtel, and 10 other equity stocks closed in red. The current valuations are not expensive but are not lucrative from a risk-reward perspective. Consistent earnings delivery against expectations is critical for further outperformance.

The Chinese markets closed higher after their central bank cut key rates. The Asian markets finished on a mixed note with the Shanghai Composite gaining 1.14%. Meanwhile, Nikkei 225 and Hang Seng dropped by 2.07% and 0.27% respectively. Such a slowing trend of the Chinese market is causing further worry among Indian investors. As a result, many investors have cut back on their investments in the stock market.

The Indian markets started on a positive note as markets of  Japan and China were trading higher following China’s central bank announcement on Friday about, 50 basis points cut in reserve requirement ratio for all banks. There was also an upward momentum in the afternoon session markets that was following gains in basic materials, realty, and metal stocks.

There were healthy buying patterns observed in blue-chip equity stocks such as Ultratech Cement, SBI, etc. However, during the end of the trading hour, there were several investors looking forward to booking profits from the European markets thereby leading to a few equity stocks trading in red during the market closing hours.

In contrast, on the 13th of July 2021, the domestic equity benchmarks started on a strong note. The buying interest for RIL and financial stock increased thereby compensating for the decrease during the closing of the market on the 12th of July 2021. The S&P BSE index experienced a drastic rise by 344 points. This resulted in the index touching the ₹52,716.83 mark within the initial few minutes of the trading hours. The NSE Nifty 50 index increased by 104 points from its previous closing point thereby reaching the ₹15,796.25 mark.

With the recovery in the market, many investors are looking forward to invest in the upcoming Zomato IPO. The IPO will trade between ₹72 and ₹76. ₹9,375 Crores worth of shares will be traded as fresh issue during the IPO. Investors can start bidding on the 13th of July and bid for a minimum of 195 equity shares

In a Nutshell

With the market shooting back up by gaining 344 points and 104 points in Sensex and Nifty 50 respectively, investors share a positive outlook towards investing in the market. Several investors also expect a stock-specific action to increase the proceedings as the earnings during the June quarter were in full swing. With many investors eagerly waiting for the Zomato IPO, there can be an expected increase in the number of active investors in the market.