Market Movers: Dip buyers line up for broader market stocks; VIP soars

MUMBAI: Much like our attention span, the sell-off in midcap and smallcap stocks this week proved to be fleeting.

Post the clarification by the BSE on Wednesday over its new surveillance rules, dip buyers, who were sitting on the fence for a correction, lined up to buy shares of midcap and smallcap companies that had seen hefty correction over the past week.

The Nifty Midcap 100 and Nifty Smallcap 100 index jumped 1 per cent and 2 per cent, respectively, after falling up to 6 per cent in the previous few sessions.

The bargain buying suggested that appetite for the segment remains strong among investors despite concerns in some quarters of elevated valuations and exuberance. It seems the bull run may resume going ahead as optimism for earnings growth remains high and investor pockets deepen.

Lupin under pressure

Shares of the pharmaceutical company have fallen over 15 per cent in two days following today’s 7 per cent slump on rising concerns over its earnings.

The company’s management hinted that September quarter earnings may not be much to write home about, while its US business is starting to see high price erosion on account of a lack of meaningful launches.

The drug company remains constrained by the restrictions imposed on new drug approvals by the US drug regulator on several of its facilities. Till the time those facilities come back on track, Lupin faces the problem of delivering on lofty investor expectations without much firepower.

VIP shines post-earnings

The travel bag manufacturer saw its stock soar 20 per cent today as investors were seemingly impressed by the company’s June quarter earnings despite the travails of the second wave of the pandemic.

reported a consolidated net profit for the June quarter as against a net loss in the year-ago period aided by hefty cost controls that the management has implemented. Gross margins spiked to 51 per cent in the quarter, almost back to pre-Covid levels, reflecting the benefits from suppression of costs.

The June quarter performance left investors wondering if the company is capable of this much in a quarter hit by the pandemic, the prospects in a fully re-opened economy could be mouth-watering.

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