Falling Crude Oil Prices, Air Passenger Traffic Growth, and Top Cues in Focus Today

Wed, 22 Jan Pre-Open

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On Tuesday, Indian share markets witnessed selling pressure throughout the day and ended lower.

The BSE Sensex closed lower by 205 points to end the day at 41,324. Tata Steel and M&M were among the top losers.

While the broader NSE Nifty ended down by 55 points to end at 12,170.

Among BSE sectoral indices, power stocks fell the most, followed by realty stocks and auto stocks.

Top Stocks in Action Today

Tata Motors share price will be in focus today as the company's wholly owned subsidiary - Jaguar Land Rover (JLR) is developing a pioneering shape-shifting system designed to improve customer wellbeing by tackling the health risks of sitting down for too long.

Just Dial share price will also be in focus today as the company has received approval for acquisition of 100% equity shares of MyJD at face value, thereby resulting in the entity becoming a wholly owned subsidiary of the company.

Market participants will also track Asian Paints share price, Ceat share price, and L&T share price as these companies will announce their December quarter results later today.

You can also read our recently released Q3FY20 results: Infosys, IndusInd Bank, Bandhan Bank, Mindtree, TCS, Reliance Industries, HCL Technologies, Kotak Mahindra Bank, HDFC Bank.

Q3FY20 Results

ICICI Securities share price has reported 33% rise in its net profit at Rs 1,361.2 million for the December quarter (Q3FY20) as compared to Rs 1,023.2 million for the same quarter in the previous year.

Newgen Software share price has reported 59.8% rise in its net profit at Rs 237.4 million for the quarter under review as compared to Rs 148.6 million for the same quarter in the previous year.

Total income of the company increased by 16.5% at Rs 1,653.7 million for Q3FY20 as compared to Rs 1,420 million for the corresponding quarter previous year.

Hindustan Zinc share price has reported 26.7% fall in its net profit at Rs 16.2 billion for the quarter under review as compared to Rs 22.1 billion for the same quarter in the previous year.

From the Aviation Space...

The Directorate General of Civil Aviation (DGCA) in its latest data has said that domestic air passenger traffic grew by just 3.74% to 144.1 million in 2019 as compared to 138.9 million in 2018, largely on account of the closure of Jet Airways.

The domestic air passenger traffic grew by 18.6% in 2018.

The domestic air passenger traffic in December 2019 increased by 2.6% to 13 million compared to the same month in 2018. In comparison, the growth in domestic traffic in November 2019 was 11.2%.

The passenger load factors of all major airlines - Air India, SpiceJet, GoAir, IndiGo, AirAsia India and Vistara - declined in December 2019 as compared to November 2019.

SpiceJet reported passenger load factor (PLF) of 92.7% during the month of December 2019. The company had reported PLF of 92.8% during the month of November 2019.

InterGlobe Aviation (IndiGo) reported the PLF of 90.1% during the month of December 2019. It had reported PLF of 91.4% during November 2019.

Gold Rises as IMF Trims Growth Outlook

Gold prices edged higher on Tuesday as traders shifted to safe-haven counters amid slowdown worries and prospects of economic damage from a new strain of pneumonia in China.

The International Monetary Fund trimmed its global growth forecasts, mostly due to a surprisingly sharp slowdown in India and other emerging markets. It lowered the FY20 growth rate for India to 4.8%.

The IMF projection, 1.3 percentage points lower than its earlier estimates, is less than the 5% projected by the official advance estimates.

The IMF projected India's economy to grow by 5.8% next year, which is 1.2 percentage points less than its earlier forecast. It also forecast the economy to grow by 6.5% in 2021-22 which is 0.9 percentage point lower than earlier projections.

Gold prices rose to US$ 1,568 as a virus outbreak in China stoked fears of a wider epidemic that could hamper economic growth, sparking a sudden bout of risk aversion.

Speaking of gold, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

Here's what Ankit Shah, the editor of daily premium newsletter Equitymaster Insider (requires subscription) wrote about this in one of the editions of The 5 Minute WrapUp...

• "In fact, gold has delivered double-digit gains in 10 of the last 15 years.
  
  During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).
  
  During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.
  
  One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment."

Meanwhile, Vijay Bhambwani talks about how gold has been relied upon by humankind for 3000 years in one of his videos.

If you consider street inflation, your fixed deposits are giving negative yields. In times like these, Vijay considers gold as a safe haven.

So, is it the time to buy gold?

Tune in to find out...

Crude Oil Falls amid Easing Supply Concerns

Crude oil prices fell nearly 1% on Tuesday as investors expected Libya's oil production to eventually resume following a force majeure declared by the oil exporter on two major oilfields amid a military blockade.

Two major oilfields in southwest Libya began shutting down on Sunday after a pipeline was closed off, potentially reducing national output to a fraction of its normal level, the country's National Oil Corp (NOC) said.

A document sent to oil traders on Monday said the NOC had declared force majeure - a waiver on contractual obligations - on crude loadings from El Sharara and El Feel oilfields in Libya's southwest.

If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day (bpd). Libya has been producing around 1.2 million bpd recently.

Anti-government unrest in Iraq had initially supported oil prices, but officials later said production in southern oilfields has not been affected by the unrest.

As per the economic schedule released by Vijay Bhambwani, editor of Weekly Cash Alerts, here are the important events due later today:

• Australia - Consumer Sentiments January
• UK - Retail Sales, Gross Mortgages, Public Sector Borrowings December
• USA - Existing Home sales December

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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