Markets opened above Wednesday’s closing point.
IT stocks and PSU bank stocks rose the most today. Pharma stocks and healthcare stocks fell the most.
Global markets: US markets rose and Asian markets showed a mixed trend. Most European markets fell (as of 6 pm IST).
News
India’s forex reserves rose by $0.39 billion to $687.2 billion in the week that ended on 9 Jan.
SEBI has given in-principle approval to NSE’s settlement application in its unfair market access case.
Amagi Media Labs IPO was subscribed 30.22 times. Retail subscription: 9.31 times. IPO is closed for subscription.
Stocks Updates
Wipro: net profit fell 7% year-on-year to Rs 3,119 crore in the Oct-Dec quarter. Dividend declared: Rs 6 per share. Record date: 27 Jan.
Tech Mahindra: net profit rose 14% year-on-year to Rs 1,122 crore in the Oct-Dec quarter.
Polycab: net profit rose 36% year-on-year to Rs 630 crore in the Oct-Dec quarter.
LTIMindtree: won a Rs 3,000 crore, 7-year contract from CBDT to build an AI-powered platform to modernize the country’s national tax analytics system.
BHEL: started supplying semi-high-speed underslung traction transformers for the Vande Bharat Sleeper Train project.
Indus Towers: incorporated step-down subsidiaries in Nigeria and Zambia to expand its telecom tower infrastructure business.
Infosys: completed the merger of its Romanian step-down subsidiaries, In-tech Engineering Services SRL and ProIT SRL, forming ‘In-tech Engineering SRL’.
JSW Energy: a wholly owned subsidiary contracted ‘Toshiba JSW’ to supply two 800 MW steam turbine generators for its 1,600 MW Salboni thermal power project in West Bengal.
L&T: won a large order (Rs 2,500 crore to Rs 5,000 crore) from Petronet LNG to build LNG/ethane and propane storage tanks and handling facilities at the Dahej Petrochemical Complex in Gujarat.
NTPC Green: announced commercial operation of an additional 37.5 MW solar capacity in Bhuj, Gujarat. The board also approved forming a 50:50 joint venture with GAIL (India) to undertake renewable energy projects.
Word of the Day
Stagflation
It is when there is slow growth, high unemployment, and inflation at the same time
Normally, an economy with slow growth rate has lower inflation.
But during stagflation, even as the growth slows down, prices remain high.
It is a situation that a government finds hard to solve, as correcting one factor might lead the other to worsen.
6 Day Course
Theme: derivatives
Day 5: Friday
Of course, hedging and insurance aside, traders love to speculate and try to profit.
Derivatives work well for that purpose too.
The basis of that is that everybody has a different opinion about the future price of a stock.
The person who thinks the price will be lower in the future places bets accordingly. Same with the trader who thinks the price will be higher in the future.
Only one of these two will profit. Futures and options trading are a zero sum game.
Another use case is arbitrage.
In this, traders use high-frequency algorithms to keep an eye on the same derivatives across different exchanges.
Whenever they notice a price difference, they buy from the cheaper place and sell on the more expensive exchange.
Technically, this is a risk-free way of making a profit. Realistically, it is very hard and works only for the very best of trading firms.
Featured Question
Q. “Please Explain what is VIX index? How useful it is? What we can understand from it? Fullform of VIX? How it is calculated?”It’s hard to comment on what would happen if the stock markets were open 24 hours in a day.
VIX is a measure of volatility.
VIX = Volatility Index
Volatility is the extent to which a stock price or index (like Nifty 50) moves up and down within a short period of time, and the extent of the movement.
Higher volatility means the ups and downs are greater. This can imply nervousness or negative sentiments.
If you look at the historical VIX data, you can see the VIX levels at different periods.
In India, we use an index called India VIX.
Example: India VIX hovers between 10 and 20 most of the times. During March 2020, it was above 75.
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