Market Movers: What sparked a stunning rally in HDFC Life Insurance?

MUMBAI: HDFC Life Insurance’s shares jumped today as if they were part of the smallcap index. On a special day for the stock, climbed nearly 6 per cent to mark one of the best days for the counter in the past one year.

The near-6 per cent jump in the stock came after a media report said that the company is likely to raise as much as $1 billion from investors. While the purpose of the fund raise was not immediately clear, analysts suggested that the company could use the capital to cover the rise in claims in the June quarter due to COVID-19 and fund future growth.

HDFC Life on Tuesday announced that its board will meet on Friday to raise funds through issue of equity shares on a preferential basis. While doubts remain if the life insurer needs the cash it wishes to raise, investors were rather impressed by the company’s aggressiveness.

Hoping against hope?

While some analysts may have given up on struggling telecom operator , investors still aren’t willing to throw in the towel just yet.

Shares of the debt-laden company soared 18 per cent in a stunning move after media reports said that Aditya Birla Group’s head Kumar Managalam Birla met with the government to make another case for support for the telecom sector.

While no announcements have come out of the meeting, the general sense among market participants was that the government was willing to provide a helping hand to the sector, but there was likely no scope for company-specific relief.

Yet, such is the desperation of the situation that even sops for the sector is expected to provide Vodafone Idea some breathing room as it stares down the barrel of bankruptcy.

Beaten down

You know you haven’t got much scope as an investment avenue when you are the only sectoral index that lost its market value on a day when the rest of the market boomed. That is the fate currently of the automobile sector, which is finding it difficult to convince investors that it is worth a shot.

The sector is plagued with numerous issues, but none more pertinent than demand. The devastating impact of the pandemic on households has meant that buying an automobile, in particular, a two-wheeler is no longer on consumers’ list.

Further, rising competition from technological disruptors like Ola Electric and frequent shortages in semiconductors is also weighing the sector down. M&M joined the list of growing Indian carmakers to temporarily shut down plants because it does not have enough chips to produce its cars.

While there is no clarity as to when the sector will see a turnaround, one thing is clear: it will remain the market’s favourite punching bag for some time to come.

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