BSE Midcap index hits new high as financials, Adani group stocks rally

At 02:04 pm, the S&P BSE Midcap, the top gainer among broader indices, was up 1.5 per cent after hitting an intra-day high of 20,234 on the BSE

The S&P BSE Midcap index hit a new high, crossing 20,000-mark for the first time ever in Monday's intra-day trade after a sharp rally in Adani Group and financial stocks.

At 02:04 pm, the S&P BSE Midcap, the top gainer among broader indices, was up 1.5 per cent at 20,212, after hitting an intra-day high of 20,234 on the BSE . In comparison, the benchmark S&P BSE Sensex was up 1.08 per cent, while the S&P BSE Smallcap index gained 0.58 per cent, the exchange data shows.

Adani Transmissions and Adani Enterprises from the Adani group companies rallied 13 per cent and 10 per cent, respectively. Cholamandalam Investment and Finance Company, LIC Housing Finance, Mahindra & Mahindra Financial Services, Shriram Transport Finance, PNB Housing Finance, Aditya Birla Capital, L&T Finance Holdings and IDFC First Bank from financials were up in the range of 5 per cent to 13 per cent on the BSE.

The January 2021 Consumer Price Index (CPI) inflation surprise would imply that the revised Q4FY21 estimate of Reserve Bank of India RBI at 5.2 per cent could see further downside of 40-50bps. If food inflation normalizes next year to below 3 per cent (from 8 per cent plus in FY21E), the headline inflation could average comfortably below 4.5 per cent in FY22E (vs. around 6.2 per cent in FY21E). However, risks of increasing input costs, higher commodity prices and seasonal upside in food prices and better pricing power remain key risks to inflation.

Analysts at Emkay Global Financial Services see core inflation outdoing headline inflation through most part of FY22. The healthy inflation print, nonetheless, could put significant downward pressure to the RBI's Q4FY21 and H1FY22 forecasts and will also help reinforce an accommodative stance in CY21. The brokerage, however, said it remain watchful of risks in the form of cost push pressure in non-food and non-perishable goods, seasonal upside in food prices in summers and demand-led better pricing power.

Meanwhile, the banking and the financial services sector has positively surprised the Street for two consecutive quarters.  Analysts note that stress recognition (in the form of pro-forma slippages of 2-5 per cent) and invoked restructuring (at less than 1 per cent) well within or below the guided range; contained credit cost being much lower than anticipated; robust CASA accretion, sharp decline in deposit cost and release of liquidity buffer, all lead to earnings upgrade and stable-to-improving interest margin profile of banks in Q3FY21. CLICK HERE TO READ FULL REPORT

Among the Adani group stocks, Adani Enterprises, on Friday, entered the list of the top-50 most valuable companies in India after a sharp rally in the company's stock price. The stock hit a fresh 52-week high of Rs 788, up 10 per cent in intra-day today, rallied 20 per cent in past two trading days.

At 02:24 pm, Adani Enterprises, with market cap of Rs 85,400 crore, stood at the 45th position in market-cap ranking. In the past two trading days, Adani Enterprises surpassed Coal India, Britannia Industries, Grasim Industries, Dr Reddy’s Laboratories, Tata Steel, Godrej Consumer Products, IndusInd Bank, Eicher Motors, Berger Paints and DLF.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
Cholaman.Inv.&Fn	531.70	468.55	13.48
Apollo Hospitals	3073.45	2747.35	11.87
Adani Transmissi	685.10	627.60	9.16
Adani Enterp.	771.80	719.20	7.31
LIC Housing Fin.	469.95	442.50	6.20
M & M Fin. Serv.	217.85	205.60	5.96
Shriram Trans.	1520.00	1438.25	5.68
Aditya Birla Cap	93.30	88.65	5.25
Oberoi Realty	590.35	562.40	4.97
Nippon Life Ind.	340.40	325.60	4.55
L&T Fin.Holdings	98.30	94.25	4.30
Power Fin.Corpn.	131.80	126.50	4.19
REC Ltd	153.45	147.30	4.18
IDFC First Bank	54.05	52.10	3.74
RBL Bank	249.45	241.40	3.33
Canara Bank	162.05	157.05	3.18