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Sensex Opens Strong; Metal & Energy Stocks Lead
Wed, 20 Feb 09:30 am | Rini Mehta, TM Team

Asian stock markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 0.7% while the Hang Seng is up 0.9%. The Shanghai Composite is trading up by 0.1%. US stocks gained ground on Tuesday as upbeat results from Walmart boosted investor sentiment and high-level US-China trade talks resumed in Washington.

Back home, India share markets opened higher. The BSE Sensex is trading up by 248 points while the NSE Nifty is trading up by 74 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.6%.

All sectoral indices are witnessing buying interest in the opening session with metal stocks and oil & gas stocks leading the gainers.

The rupee is currently trading at Rs 71.33 against the US$.

In the news from the global economy. The dollar sagged against its peers on Wednesday in the wake of falling US yields and as investors remained cautious ahead of the Federal Reserve's policy meeting minutes due later in the session.

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The US currency has also been weighed down as safe-haven demand for the liquid dollar has ebbed on optimism that a fresh round of talks between China and the United States would help resolve their trade conflict.

The benchmark 10-year US Treasury yield fell sharply to an 11-day low on Tuesday ahead of the Fed meeting minutes, which are due today.

The minutes from the January Fed meeting will be closely watched following a dovish statement from the central bank at their January policy-setting meeting.

Note that, one of the key determinants of liquidity flows in the stock markets is interest rates. The 10-year US Treasury bond is a global interest rate benchmark.

The prolonged artificial suppression of interest rates and money printing by the US Fed, flooded the global financial markets with cheap liquidity and lifted stock prices to frothy levels.

Now, just the way lower interest rates can fuel stock market rallies, the vice-versa is also true. If interest rates start firming higher, it can play spoilsport to the unbridled global stock market bull run.

In fact, the market correction we witnessed in February-March in 2018 can be attributed to the rising yield on the 10-year US Treasury bond.

This Chart Has the Key to Your Future Stock Market Returns

If interest rates go up further, foreign investors will either go slow on India or exit all together.

So, be careful. Don't take the abnormally high valuation multiples as the new normal. At the same time, don't exit the markets out of panic.

Stay invested.

Back home, non-banking financial companies (NBFC) space saw the biggest liquidity crunch last September.

However, this is about to turnaround soon as corporate bond issuances by NBFCs have risen by 30% in January, indicating renewed confidence among issuers and investors.

It can be noted that NBFCs are the biggest issuers of debt in the corporate bond market, controlling nearly 90% of the volume.

With the 30% spike in fresh issuances in January, their share has clawed backed to the near normal levels to 82.2% of the volume.

The corporate bond issuance on a monthly basis has been seen falling in the last 7 months due to the IL&FS bankruptcy faced by the sector.

Fresh corporate bond issuances by NBFCs saw a notable decline from 71.6% (of the total flow) in July 2018 to 64.6% in August 2018.

This scenario however changed between September 2018 to November 2018 as issuances rose each month rising to almost 80% in November 2018.

The situation went back to its earlier poor state led by liquidity challenges in December as bond sales by NBFCs plunged almost 30%, the reports noted.

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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Stock Market Updates

Top 5 Mid-Cap Gainers Today; SAIL Leads the Pack (Today's Market)

Mar 18, 2019 03:44 PM

Here's a list of 5 stocks that gained the most in the BSE Mid-Cap Index today. It also includes information on BSE Mid-Cap index and the broader benchmark indices.

J&K BANK Surges by 5%; BSE BANKEX Index Up 1.1% (Today's Market)

Mar 18, 2019 03:32 PM

J&K BANK share price has surged by 5% and its current market price is Rs 49. The BSE BANKEX is up by 1.1%. The top gainers in the BSE BANKEX Index is J&K BANK (up 5.0%). The top losers is FEDERAL BANK (down 0.1%).

VODAFONE IDEA Plunges by 5%; BSE 500 Index Up 0.2% (Today's Market)

Mar 18, 2019 03:24 PM

VODAFONE IDEA share price has plunged by 5% and its current market price is Rs 34. The BSE 500 is up by 0.2%. The top gainers in the BSE 500 Index are PRESTIGE ESTATES (up 16.2%) and BOMBAY DYEING (up 9.1%). The top losers are VODAFONE IDEA (down 5.0%) and IFB INDUSTRIES LTD (down 5.2%).

TTK PRESTIGE Plunges by 5%; BSE CONSUMER DURABLES Index Up 0.1% (Today's Market)

Mar 18, 2019 03:06 PM

TTK PRESTIGE share price has plunged by 5% and its current market price is Rs 8,598. The BSE CONSUMER DURABLES is up by 0.1%. The top gainers in the BSE CONSUMER DURABLES Index are SYMPHONY (up 1.2%) and VOLTAS (up 1.1%). The top losers is TTK PRESTIGE (down 5.2%)..

IFB INDUSTRIES LTD Plunges by 5%; BSE CONSUMER DURABLES Index Up 0.1% (Today's Market)

Mar 18, 2019 01:36 PM

IFB INDUSTRIES LTD share price has plunged by 5% and its current market price is Rs 980. The BSE CONSUMER DURABLES is up by 0.1%. The top gainers in the BSE CONSUMER DURABLES Index are VIP INDUSTRIES (up 1.3%) and SYMPHONY (up 1.2%). The top losers is IFB INDUSTRIES LTD (down 5.1%)..

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