Market Update 16 Dec. 2020 – Sugar stocks turn sweeter

Trade deficit narrows

  • India’s exports in November dipped by around 9% due to lower shipments of engineering goods, chemicals and gems & jewellery. On the other hand, imports saw a sharper decline of 13% due to lower oil imports.
  • In this fiscal, the trade deficit stood at $42 billion compared to $113 billion last year. This typically means lower forex outflow.

Sugar stocks turn sweeter

  • The government has approved an export subsidy of ₹3,500 crore to help sugar mills clear outstanding dues to sugarcane farmers. The move is expected to benefit 5 crore farmers.
  • Shares of sugar companies—Uttam Sugar (+7.6%), Simbhaoli Sugar (+4.6%), Dalmia Bharat (-1.9%), Shree Renuka (+2.6%), Bajaj Hindusthan (+2.2%)—were all up today. Higher exports, supported by the subsidy, would further help manage the inventory situation as India is expected to have a bumper sugar output this year.

Whopper Christmas gift

  • Investors in the Burger King IPO must be a happy lot. The stock has now tripled from its issue price of ₹60, and that too within three days of listing.
  • While the 156x oversubscription indicated immense demand for the stock, low retail holding of about 4% is being cited as one of the reasons for high demand. Other QSRs, chiefly Westlife (+12.8%) and Jubilant Foodworks (+3.4%), too saw investor interest.

Realty stocks on the rise

  • The Nifty Realty index rose 5.1% today and is the top sectoral performer this month, rising about 17% so far in December. Thanks to low home-loan rates, stamp-duty cuts and lucrative offers, certain cities have seen demand recovery in the residential real estate market.
  • In Maharashtra, October sales were 30% higher than in January. Further, the demand momentum has continued even after the festive season.
  • Shares of real estate players such as Indiabulls Real Estate (+11.7%), DLF (+9.7%), Godrej Properties (+3.9%), Sobha (+4.7%) and Oberoi Realty (+4.6%) gained today.