Sensex Ends 205 Points Lower; Power and Realty Stocks Witness Selling

Tue, 21 Jan Closing

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India share markets continued to witness selling pressure during closing hours and ended their day on a negative note.

At the closing bell, the BSE Sensex stood lower by 205 points (down 0.5%) and the NSE Nifty stood down by 54 points (down 0.5%).

The BSE Mid Cap index ended the day down 0.2%, while the BSE Small Cap index stood flat.

Stocks in the power sector and realty sector witnessed huge selling pressure, while telecom stocks were trading in the green.

The rupee was trading at 71.16 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 2.81% and the Shanghai Composite was down by 1.41%. The Nikkei 225 was down 0.91%.

European markets were also trading on a negative note. The FTSE 100 was down by 1.25%. The DAX was trading down by 0.46%, while the CAC 40 stood down 1.11%.

Speaking of the Indian economy and Indian share markets, Ankit wrote to you about a recent upcoming IPO. It's a company profiting from two megatrends - digitisation and financialisation - in the Indian economy.

Have a look at the chart below. A quick comparison of assets under management (AUM) of mutual funds in India versus abroad will give you a clear idea of the huge megatrend.

Mutual Funds: Megatrend of the decade?

India's mutual fund AUM as a percentage of GDP is 11%. This is far lower than the world average of 55%.

Here's what Tanushree Banerjee wrote about it in a recent edition of The 5 Minute WrapUp...

• I strongly believe, the next decade could be the decade of financialisation in India.
  
  Traditionally, Indian households have preferred to invest in physical assets like real estate but things are changing.
  
  Indians now are more open to investing in financial assets like mutual funds. Better awareness, financial education, increasing urbanisation are all driving this change.
  
  Mutual fund AUM grew 24% annually in the last 5 years. I expect India's GDP to grow at 6-7% over the next decade.

Just combine these growth rates and you can see the massive growth opportunity.

Tanushree has also shared a popular video of Vijay Bhambwani along with the full transcript, on safe investments for 2020.

You can check out the same here: Your Safe Income Options for 2020

In news from the pharma sector, Alembic Pharmaceuticals share price was in focus today as the US health regulator conducted an inspection at its facility in Karkhadi, Gujarat.

The company in a filing said that the US Food and Drug Administration (USFDA) has conducted an inspection at Alembic Pharmaceuticals active pharmaceutical ingredient (API) facility located at Karkhadi from January 13 to January 17, 2020.

At the end of the inspection, the USFDA issued a form 483 with two observations.

This was a scheduled pre-approval inspection.

Note that the US Food and Drug Administration (USFDA) is back in action again as at least five companies filed corporate announcements on the stock exchanges related to the health regulator over the past three days.

Cipla announced the closure of inspection by the USFDA at its Patalganga manufacturing facility in Maharashtra.

Biocon also informed bourses that pre-approval inspection of the Bengaluru facility of its arm conducted by US health regulator was concluded with zero observations.

Strides Pharma Science (Strides) said its arm has received an establishment inspection Report (EIR) from the US health regulator for its Florida facility in the US. Strides Pharma Inc received EIR from the USFDA for the inspection conducted at its unit it December last year.

Drug major Lupin on Saturday said it has received five observations from the US health regulator after inspection of its Vizag facility in Andhra Pradesh.

And SMS Pharma today informed exchanges that the United States Food and Drug Administration (USFDA) conducted a cGMP inspection at Kandivalasa, Vipanagaram, Andhra Pradesh API manufacturing facility from January 13-17.

How this trend pans out in the coming days and what effect it will have on the pharma sector remains to be seen. We will keep you updated on all the developments from this space.

Speaking of the pharma sector, in the video below, Tanushree talks in great detail about where the sector stands now and also about its potential for a rebound.

Tune in to find out more...

Moving on to news from the banking sector, Federal Bank share price was in focus today as the bank's third quarter net profit rose 32% year-on-year (YoY) on the back of higher other income and lower provision.

The bank posted a net profit Rs 4.4 billion for the three months ended 31 December compared to Rs 3.3 billion in the year-ago period.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 7.21% YoY to Rs 11.5 billion from Rs 10.7 billion in the corresponding period last year.

Other income, which includes core fee income, rose 18.03% to Rs 4 billion in the three months from Rs 3.4 billion a year ago.

Gross non-performing assets (NPAs), as a percentage of total advances, were at 2.99% in the December quarter compared with 3.07% in the September quarter and 3.14% in the year-ago December quarter.

Provisions during the quarter decreased 15.39% to Rs 1.6 billion as against Rs 1.9 billion in the year-ago quarter. In the July-September quarter, the bank had set aside Rs 2.5 billion in provisions.

Post-provision, the net NPA ratio was at 1.63% against 1.59% in the July-September quarter and 1.72% in the year-ago quarter.

To know more, you can read Federal Bank's Q3FY20 result analysis on our website.

And 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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