It was a kind of two-way market in the previous week ended 09 April. A total of 4 out of 10 most valuable companies by market cap in the Nifty added Rs.114,744 crore to the market cap during the one week. IT continued to dominate the market outperformance on the back of expected spurt in US growth even as banks were under pressure on lockdown worries.

In terms of numbers, TCS gained Rs.57,816 and Infosys Rs 23,625 crore. Apart from the Big-2, HUL added Rs.17,974 crore and Bharti Airtel Rs,15,329 crore. Among the big value losers, HDFC Bank lost Rs.35,750 crore, RIL Rs.24,756 crore, ICICI Bank Rs.18,997 crore and SBI Rs.15,618 crore. Clearly banks were hit by the pandemic and AT-1 bond uncertainty.

On Friday, the Nifty and Sensex gave up higher levels and the closed nearly 40 points down. It does look like the level of 15,000 on the Nifty and the level of 50,000 on the Sensex are proving to be absolute pain points for the indices. One challenge in the week could be that banks will be under pressure on concerns over a second lockdown.

It is clear that the market is getting a tad cautious if you look at the renewed interest in defensive stocks. In the last few days, FMCG stocks have generated a lot of interest on lockdown demand expectations while the pharma companies are back in action all over again as a rise in COVID is expected to spur domestic and international demand.

FPI action was negative as they sold Rs.654 crore worth of equities on Friday even as domestic institutions also joined the selling and hived off Rs.271 crore of equities. However, low VIX and a weaker rupee could mean that the FII selling is not picking up steam easily. However, FPIs have shown a tendency to look at alternate markets like Korea, Taiwan etc.

NASDAQ and Dow were in positive territory on Friday on the back of hopes that the US growth could get upgraded closer to 6% for calendar year 2021. Indian markets on the SGX were negative but IT stocks could hold fort.

Infosys is expected to consider a buyback offer to equity shareholders during its board meeting on 13 and 14 April. The board meet will culminate with the announcement of quarterly results for Q4 as well as the annual numbers for fiscal year 2020-21. The buyback details are awaited but it is expected to be around Rs.12,000 crore.

IT sector is expected to post very strong earnings in Q4 and hence it is very likely that IT companies would look to distribute some of their higher earnings. Tier-I IT companies or the Big-4 IT names are expected to grow 2.2%-3.9% sequentially. This will be the third buyback announced by Infosys in the last 5 years.

The Indian government has promised that by September 2021 India would get 5 additional approved vaccines, in addition to the existing Covishield and COVAXIN. This could include Russian Sputnik-V by RDIF, Johnson & Johnson in collaboration with Biological-E, Novavax, Cadila vaccine and Bharat Biotech intranasal. Government will give priority to safety and efficiency for emergency approval.

India’s 12 major state-owned ports saw 4.59% contraction in cargo volumes at 673 MT in FY21; lower than the last 3 years. Paradip in the East and Marmagao in the West recorded positive cargo growth. Cargo volumes dipped in Ennore, Mumbai, Chidambaranar, Cochin, New Mangalore, Chennai, Kandla, Kolkata, Vizag and JNPT. The 12 state-owned ports handle 61% of cargo traffic and are a key index of trade.

M&M plans to invest Rs.3,000 crore in its electric vehicles business over the coming 3 years and this likely to be in addition to the Rs.9,000 crore that M&M has already committed to invest. The strategy of Mahindra & Mahindra is likely to be largely inorganic and they would be looking for synergistic acquisition targets in this particular space to expand footprint.

M&M plans to put 5 lakh electric vehicles on Indian roads by 2025, which is an ambitious target. The company will initially focus EVs on 3-wheelers and small 4-wheelers as cost of ownership is relatively lower in these cases. In addition, the big challenge of charging facilities also gets addressed due to swappable batteries.

Government may hike FDI limit in pension sector from 49% to 74% in the next parliament session. They could take a cue from the insurance sector which saw FDI of Rs.26,000 crore after FDI limit was raised from 49% to 74%. Pension reforms hold the key as government has been struggling with unsustainable pension bills and is keen to shift in favour of a defined contribution pension scheme at the earliest. That can encourage higher pension FDI.