Sensex Ends 91 Points Higher; BPCL and UPL Top Nifty Gainers

Thu, 14 Jan Closing | Monish Vora, TM Team

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Indian share markets recovered early losses and ended marginally higher today.

At the closing bell, the BSE Sensex stood higher by 91 points (up 0.2%).

The NSE Nifty closed higher by 30 points (up 0.2%).

BPCL and UPL were among the top gainers today.

The SGX Nifty was trading at 14,623, up by 50 points, at the time of writing.

The BSE Mid Cap index ended up by 0.3%, and the BSE Small Cap index ended up by 0.2%.

On the sectoral front, gains were largely seen in the energy sector, capital goods sector and healthcare sector.

Metal stocks, on the other hand, witnessed selling pressure.

Shares of MRF hit their 52-week highs today.

Asian stock markets closed on a mixed note. As of the most recent closing prices, the Hang Seng ended up by 0.9% and the Shanghai Composite stood lower by 0.9%.

US stock futures are trading higher today indicating a positive opening for Wall Street indices with Dow Futures trading up by 92 points (up 0.3%).

Crude oil prices were trading higher on expectations of a drawdown in crude oil inventories in the United States for a fifth straight week, but investor worries over climbing coronavirus cases globally capped price gains.

The rupee is trading at 72.99 against the US$.

Gold prices for the latest contract on MCX are trading down by 1% at Rs 48,813 per 10 grams.

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To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Note that since the lows in March 2020, the smallcap index has gained more than 100%.

While caution is indeed warranted, Richa Agrawal, Research Analyst at Equitymaster, thinks there is still a lot more steam left to this smallcap rally.

Despite rallying more than 100% since the March 2020 lows, Richa believes small-cap stocks are set for a massive up move in 2021 and beyond.

Here's what she wrote in a recent edition of Profit Hunter...

• The P/E for smallcap index doesn't make sense. There are thousands of listed small companies. Some have negative earnings. The base is not a valid data to work with.
  
  That said, the closest proxy to relative valuations is the Smallcap to Sensex ratio,
  
  Historically, this ratio has averaged 0.43x. In the previous mega runs of the smallcap index, this ratio has gone as high as 0.75x.
  
  In January 2018, when smallcaps peaked, the ratio was at 0.58x.
  
  Guess where this ratio is now after a 100% run up in the smallcap index?
  
  0.38.
  
  It's lower than the median over 2 decades.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

Speaking of stock markets, India's #1 trader, Vijay Bhambwani talks about the buzzing sectors before Budget 2021, in one of his latest videos for Fast Profits Daily.

In the video below, Vijay covers the sectors which would see the highest number of expectations, and buying and selling momentum before the Budget.

Tune in here to find out more:

Moving on to stock specific news...

SAIL was among the top buzzing stocks today.

The government of India plans to sell up to 10% equity in Steel Authority of India (SAIL) through an offer for sale today (January 14) and January 15.

The government will sell 5% equity in the central public sector enterprise under the Steel Ministry while keeping the greenshoe option, or option to sell further equity of 5%, in case of an over-subscription.

The floor price of the offer will be Rs 64 per equity share.

The offer for sale (OFS), which will be at a discount from the market price of the stock, has opened today for non-retail investors and will open on January 15 for retail investors. A minimum of 12.5% of equity shares will be reserved for retail investors, while 25% of the offer shares will be reserved for mutual funds and insurance companies.

How this offer for sale pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

Infosys share price was also in focus today.

Infosys reported a 16.6% year-on-year (YoY) growth in its consolidated net profit at Rs 51.97 billion for the third quarter of the financial year 2021 (Q3FY21).

On a sequential basis, the profit rose 7.3% from Rs 48.5 billion posted for the September 2020 quarter.

Infosys' revenue came in at Rs 259.3 billion, up 12.3% YoY and 5.5% QoQ. In constant currency terms, revenues grew 5.3% which was its highest Q3 sequential growth in 8 years.

The IT major also raised its FY21 revenue guidance to 4.5-5% in constant currency while FY21 operating margin guidance has been revised upward to 24-24.5% on the back of continued strong performance.

To know more, you can read Infosys' Q3FY21 result analysis on our website.

In news from the commodity space, the tenth installment (series X) of the Sovereign Gold Bond (SGB) scheme for 2020-21 for subscription opened on Monday this week.

The subscription will end on January 15, 2021.

The SGBs will be issued to investors at Rs 5,104 per gram. If the investor opts to pay using digital modes, then they get a discount of Rs 50 per bond - the issue price will be Rs 5,054 in such cases. The bond tracks the prices of gold. At the time of maturity, the investor will be paid an amount equivalent to the value of gold then.

Issued by the Reserve Bank of India, on behalf of the Union government, SGBs comprise government securities denominated in gold wherein investors are required to pay the issue price in cash.

Speaking of gold, in his latest video, Rahul Shah discusses how to alternate between a deep value portfolio and investment in gold and earn great returns.

In the video, Rahul discusses how to combine the two in a smart way and benefit from the individual strengths of each asset class.

How good is the result of this combination and what happens when you combine a deep value portfolio of mid and small caps with gold?

Find out here: I Combined Stocks & Gold and Saw the Magic Happen

In news from the macroeconomic space, wholesale inflation in India fell to 1.22% in December driven by lower food inflation, data released by the commerce and industry ministry showed.

The inflation based on Wholesale Price Index (WPI) was 1.55% in November 2020, and 2.76% in December 2019.

Inflation in food articles inflation contracted 1.11% after rising 3.94% last month while that in fuel and power index contracted 8.72% against a fall of 9.87% in November.

Manufactured products inflation rose 4.24% against a 2.97% rise in the previous month.

Data released last week showed retail inflation falling to 4.59% in December from 6.93% in November, that brought the CPI back within the Monetary Policy Committee's (MPC) target range of 2-6% for the first time since March 2020.

The next meeting of the MPC is scheduled next month from February 3-5.

How these numbers affect the MPC's decision remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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