Tuesday’s sharp gains provided an opportunity for the bulls on Dalal Street to push back against the dominance of the bears. However, hopes of any reversal were scuttled today as the benchmark indices succumbed to late selling.
The breakdown in the market towards the end is likely signalling a shift in the mood of investors, who are finally hesitating from buying every dip. With foreign investors already side-stepping Indian markets for others, retail investors, too, are now finding it hard to justify India’s blue-sky valuations.
The last hour capitulation also suggests that the road to record highs may be a long one for the bulls this time around.
Zee is motoring through with merger
Zee Entertainment is motoring through with the merger with Sony India as its CEO Punit Goenka said that the deal is in the final stages of finalization. The merger has been a contentious issue given the opposition of the company’s largest institutional investor Invesco many facets of the deal and Goenka’s presence on the board.
Investors, too, want to see the merger come to fruition as soon as possible given the mouth-watering prospects that await the merged entity. With advertising sales picking up in the media industry, the combined entity will have the wherewithal to take on the might of Netflix, Amazon and other OTT platforms. No surprise then that Zee Entertainment closed nearly 7 per cent higher following Goenka’s words.
ONGC gets a second bite
The recent correction in global crude oil prices has led to concerns that the rapid improvement in oil producer ONGC’s realizations may end up being fleeting.
The US and other countries deciding to release oil from their strategic reserve to bring down oil prices, further threatened investor conviction on the stock.
However, the market’s response to the US plan has left everyone scratching their heads. Global crude oil prices have surged since Tuesday evening following the US announcement as traders see it as a desperate ploy, which may force OPEC to double down on supply cuts.
Further, the US’ decision may see production in the country fall further, which will further push oil prices higher given that demand remains resilient even as lockdowns are returning to Europe. For ONGC, the resumption of the rally in oil prices is a major relief as it ensures a few more quarters of strong earnings delivery.