The big gains on Tuesday allowed the bulls on Dalal Street to fend off bear dominance. However, hopes of a reversal were scuttled today as benchmarks succumb to late selling.
The collapse of the market towards the end is probably a sign of a change in the mood of investors, who are ultimately reluctant to buy with every drop. With foreign investors already bypassing Indian markets for others, retail investors are also struggling to justify India’s blue sky valuations.
The last-hour surrender also suggests that the road to record highs could be a long one for the bulls this time around.
Zee goes to the end of the merger
Zee Entertainment is continuing its merger with Sony India, as its CEO Punit Goenka said the deal is in the final stages of finalization. The merger has been a controversial issue given the opposition of the company’s largest institutional investor, Invesco, to many aspects of the transaction and Goenka’s presence on the board.
Investors are also keen to see the merger come to fruition as quickly as possible given the tempting prospects that await the merged entity. With the resumption of advertising sales in the media industry, the combined entity will be able to compete with the power of Netflix, Amazon and other OTT platforms. So it’s no surprise that Zee Entertainment closed almost 7% higher after Goenka’s words.
CGSB gets a second bite
The recent correction in world crude oil prices has raised concerns that the rapid improvement in the achievements of oil producer ONGC may end up being short-lived.
The United States and other countries deciding to release oil from their strategic reserve to lower oil prices, further threatened investor conviction in the stock.
However, the market response to the US plan has left everyone in awe. Global crude oil prices have surged since Tuesday night following the US announcement, as traders see it as a desperate ploy, which could force OPEC to double its supply cuts.
Additionally, the US move could lead to a further decline in production in the country, pushing oil prices further up as demand remains resilient even as lockdowns return to Europe. For ONGC, the resumption of the rise in oil prices is a major relief as it ensures a few more quarters of solid earnings.