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Indian Indices Continue Sell-Off, Rising Gold Prices, and Top Cues in Focus Today
Thu, 27 Feb Pre-Open | Monish Vora, TM Team

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On Wednesday, Indian share markets witnessed selling pressure throughout the day and ended deep in the red.

Benchmark indices extended losses to the fourth straight day, tracking a massive sell-off on the Wall Street amid concerns over the Covid-19 spreading beyond China.

Besides weak cues from global markets, heavy foreign fund outflows too weighed on market sentiment.

The BSE Sensex closed lower by 392 points to end the day at 39,889. Sun Pharma and Maruti Suzuki were among the top losers.

While the broader NSE Nifty ended down by 119 points to end at 11,679.

Among BSE sectoral indices, realty stocks fell the most, followed by automobile stocks and capital goods stocks.

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RBI Lifts Ban on Bandhan Bank's Network Expansion

Bandhan Bank share price will be in focus today as the Reserve Bank of India (RBI) lifted restrictions placed on the bank from opening new branches.

In September 2018, the central bank had imposed a ban on the private lender from expanding its network as the lender had failed to reduce promoter stake to 40% from close to 82% within the stipulated three years from the time of commencing operations.

RBI had also ordered the bank to freeze the salary of its chief executive Chandra Shekhar Ghosh over its failure to meet shareholding rules.

Bandhan Bank's current promoter holding at 61% is still above the regulatory ceiling.

According to RBI's bank licence norms, a private sector bank's promoter needs to pare holding to 40% within three years, to 20% within 10 years, and to 15% within 15 years.

In a regulatory filing to exchanges, the Kolkata-based bank said RBI has removed the restriction "considering the efforts made by the bank to comply with the said licensing condition".

The easing of curbs has come within a month of RBI allowing Kotak Mahindra Bank's founder Uday Kotak to own a higher 26% stake than the earlier regulatory stipulated of 15%.

Bandhan Financial Holdings is the holding company and promoter of the Bandhan Bank. It's holding was diluted to 61% from 82% after the acquisition of Gruh Finance last year.

Speaking of banking sector, note that 2019 was brutal for some banking stocks.

The market has severely punished them. This is due to issues such as worsening asset-quality, corporate governance, and inadequate capital.

Stocks such as Yes Bank and Lakshmi Vilas Bank are down more than 70%.

Falling Knives in the Banking Sector

Falling stock prices could be enticing. After all, we love deep discounts and good bargains.

But if you're thinking of buying these stocks it's important to remember this point - If a stock is in a falling spree, there's probably a good reason behind it.

And realising this in a falling market is the first step towards correcting one's investing process.

Gold Continues Uptrend

Moving on to news from the commodity space, market participants will be closely tracking gold prices today as gold rate rose heading back towards a more-than seven-year high hit earlier this week, as a warning from the United States over the domestic spread of the coronavirus outbreak rattled global markets, supporting the yellow metal's safe-haven demand.

Note that 2019 proved pretty good for gold, as gold surged amid fears of a possible slowdown in global growth and uncertainty surrounding geopolitical crisis in West Asia and Britain's divorce from the European Union.

The same uptrend is also seen in 2020 so far.

Gold prices are seen rising as the rapid spread of coronavirus cases outside of China and its potential negative impact on the global economy are prompting investors to take refuge in safe haven assets like gold.

Increase in the number of new coronavirus cases outside China over the past few days have bolstered the safe haven appeal of gold. South Korea, Italy and Iran have logged sharp increases in infections and deaths, while several countries in the Middle East reported their first cases of coronavirus.

The international spot gold prices have rallied to seven-year highs while India's domestic gold prices rallied to all-time highs.

Speaking of gold, in his latest video, Vijay Bhambwani shares his view on gold and silver prices. He talks about how the bullion prices will move in the short term.

You can check the same here: Will Gold and Silver Prices Fall because of the Coronavirus?

Developments in the Pharma Space

Lupin share price will be in focus today as the company has launched Ethacrynic Acid Tablets USP, 25 mg, having received an approval from the United States Food and Drug Administration (USFDA) earlier.

The product would be manufactured at Lupin's Nagpur OSD facility, India.

The tablets are generic equivalent of Edecrin Tablets, 25 mg, of Bausch Health Americas Inc. and are indicated for the treatment of edema when an agent with greater diuretic potential than those commonly employed is required.

Cipla share price will also be in focus today as the US health regulator has issued a warning letter to the pharma company for its Goa manufacturing unit.

Cipla said that the company has received a warning letter from the US Food and Drug Administration (USFDA) for its formulations plant at Goa where inspection was conducted during 16-27 September 2019.

The warning letter reportedly said that the pharma company may continue to sell existing drugs from the Goa facility, but newer approvals will be held by the regulator if corrective measures are not taken.

The company said it remained committed to maintain the highest standards of compliance and will work closely with the agency to comprehensively address all the observations.

Last month, the drug maker had informed exchanges that that the USFDA had classified the inspection conducted at its Goa manufacturing facility as Official Action Indicated (OAI). The company had then said that it did not believe that it would have any material impact on the US business at this stage.

We will keep you updated on how this development pans out. Stay tuned.

Speaking of pharma sector, in the video below, co-head of research, Tanushree Banerjee talks about where the sector stands now and its potential for a rebound.

Tune in to find out more...

Meanwhile, Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from what she calls the Rebirth of India.

As per her, now is the right time to buy these stocks to profit from the Rebirth of India. You can read about them here.

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!

Read the latest Market Commentary


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Stock Market Updates

TTK PRESTIGE Surges by 17%; BSE CONSUMER DURABLES Index Up 1.7% (Today's Market)

Mar 31, 2020 03:33 PM

TTK PRESTIGE share price has surged by 17% and its current market price is Rs 5,154. The BSE CONSUMER DURABLES is up by 1.7%. The top gainers in the BSE CONSUMER DURABLES Index are TTK PRESTIGE (up 16.8%) and CROMPTON GREAVES CONSUMER ELEC. (up 10.4%). The top losers are TITAN (down 1.4%) and BAJAJ ELECTRICALS (down 1.8%).

KEC INTERNATIONAL Surges by 6%; BSE CAPITAL GOODS Index Up 1.3% (Today's Market)

Mar 31, 2020 03:33 PM

KEC INTERNATIONAL share price has surged by 6% and its current market price is Rs 187. The BSE CAPITAL GOODS is up by 1.3%. The top gainers in the BSE CAPITAL GOODS Index are KEC INTERNATIONAL (up 5.6%) and HONEYWELL AUTOMATION (up 7.8%). The top losers are THERMAX (down 1.7%) and LAKSHMI MACHINE (down 1.7%).

HUL Surges by 5%; BSE FMCG Index Up 5.4% (Today's Market)

Mar 31, 2020 03:33 PM

HUL share price has surged by 5% and its current market price is Rs 2,312. The BSE FMCG is up by 5.4%. The top gainers in the BSE FMCG Index are HUL (up 5.2%) and GSK CONSUMER (up 5.9%). The top losers is JYOTHY LABS (down 2.9%).

YES BANK Plunges by 10%; BSE BANKEX Index Up 1.5% (Today's Market)

Mar 31, 2020 03:33 PM

YES BANK share price has plunged by 10% and its current market price is Rs 26. The BSE BANKEX is up by 1.5%. The top gainers in the BSE BANKEX Index are CITY UNION BANK (up 5.4%) and SBI (up 4.8%). The top losers are YES BANK (down 10.5%) and INDUSIND BANK (down 14.8%).

3M INDIA Surges by 10%; BSE 500 Index Up 3.4% (Today's Market)

Mar 31, 2020 03:33 PM

3M INDIA share price has surged by 10% and its current market price is Rs 19,301. The BSE 500 is up by 3.4%. The top gainers in the BSE 500 Index are 3M INDIA (up 10.4%) and TTK PRESTIGE (up 16.8%). The top losers are THE INDIAN HOTELS (down 0.1%) and FORTIS HEALTHCARE (down 0.1%).

Indian Indices Extend Gains; ONGC, ITC and Asian Paints Surge Over 5% (Today's Market)

Mar 31, 2020 12:30 pm

The BSE Sensex is trading up by 818 points, while the NSE Nifty is trading up by 257 points.

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