Indian Indices Recover; SBI and Sun Pharma Surge Over 9%

Fri, 13 Mar 12:30 pm

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Share markets in India are presently trading on a volatile note. Benchmark indices recovered after major free-fall as trading resumed after 45 minute halt.

Indian stock markets paused trading for 45 minutes during the early session after both the benchmark indices Sensex and Nifty hit their lower circuit limits within 15 minutes of the opening session. This is first time in 12 years trading in Indian markets had to be halted.

Sectoral indices are trading on a mixed note with stocks in the healthcare sector and telecom sector witnessing buying interest, while consumer durable stocks and energy stocks are trading in red.

The BSE Sensex is trading up by 422 points while the NSE Nifty is trading up by 113 points.

The BSE Mid Cap index and the BSE Small Cap index are trading down by 1.1% and 1.8%, respectively.

The rupee is trading at 74.03 against the US$.

Note that yesterday was the biggest ever fall for the Sensex in absolute terms in last two decades... And the second biggest fall for the Smallcap index.

Our smallcap analyst at Equitymaster, Richa Agarwal, believes that recent crash could be once in a decade opportunity to invest in quality smallcaps. It's also a time to not panic and remain invested in the good quality stocks, irrespective of the volatility.

She further adds...

• At the same time, it is critical that one sticks to a solid risk management framework (asset allocation) and ensures enough liquidity in case the crisis prolongs. Amid the volatility, I believe the best approach is to consider investing in stocks that are fundamentally strong and promise steady income along with strong upside in the long term.

Richa's latest webinar - Smallcap Rebound Opportunity in the Times of Coronavirus shares a list of open positions where the rebound potential is strong... And until the rebound, one can enjoy regular income from the dividend stocks with yields up to 9%.

In news from the automobile sector, Tata Motors share price is in focus today. Stock of the company fell below Rs 100 on Wednesday for the first time in the last 11 years amid slowing demand for personal and commercial vehicles and likely disruption in production due to the coronavirus outbreak.

The scrip fell over 6% yesterday to close at Rs 99 on the BSE.

The company said that it expects limited volume loss in its domestic business during the January-March 2020 period due to disruption of supply chain from China, owing to the coronavirus outbreak.

The auto major said JLR sales in China have dropped 85% in February. It added that the joint venture plant in China reopened in the last week of the month and the production will be ramped up as the number of employees returning to work and demand increase.

Speaking of gloomy economy, coronavirus fears and falling markets, Ajit Dayal has written an insightful piece, sharing his views in the latest edition of The Honest Truth.

Here's a snippet from the article:

• Is the meltdown over?
  
  While the unravelling of the debt excess in the US and the developed world may have some more to play out, the question on an investor's mind in India is: Is the mayhem over and what should I do next?
  
  On the face of it, there is some interesting Upside Potential, or potential profit, if you were to buy the specific stocks now and assume, they get back to their past peak levels over, say, the next 2 to 3 years.
  
  With the help of either some jaadu mantar or some good policy.
  
  But there are some "bets" I would be very cautious about: Yes Bank, Reliance and the INR, for instance.

You can read his entire article here: The Market Gets a Viral Attack.

Moving on to news from the banking sector, State Bank of India (SBI) on Thursday announced a Rs 72.5-billion fund infusion in Yes Bank under which it will pick up to 49% equity.

The fund infusion is part of the Reserve Bank-mandated rescue plan.

SBI said its shareholding in Yes Bank will remain within 49% of the paid up capital of the private lender and following the fund infusion, it will pick up 7,250 million shares.

The bank, however, did not mention the exact quantum of stake it will be buying in the private lender.

Under the reconstruction scheme, SBI will have to buy 49% of Yes Bank and cannot reduce its holding below 26% before for the next three years.

Last week, SBI chairman Rajnish Kumar had told reporters that the bank would invest Rs 24.5 billion to buy 2,450 million shares of Yes Bank.

He had also spoken about roping in other investors and SBI investment would not exceed Rs 100 billion.

On March 5, the RBI imposed a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor till April 3.

The RBI also superseded the board and placed it under an administrator, Prashant Kumar who is a former deputy managing director and CFO of SBI.

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. Read the article here: How the YES Bank Collapse Unfolded - 10 Points.

In other news, the Reserve Bank of India (RBI) on Thursday urged the chief secretaries of all states to not withdraw deposits from private sector banks for the sake of financial sector stability, and assured them of the safety of these funds.

Recently, the government of Maharashtra closed one account with Axis Bank, and decided to transfer funds from the private sector banks to public sector banks.

We will keep you updated on all the developments from this space. Stay tuned.

Speaking of the banking sector, the low access to credit for micro small and medium enterprises (MSMEs) tells us there is a huge opportunity for lenders.

This is evident from the chart below:

India's Huge Lending Opportunity

Of the 60 million MSMEs in India, only 11% had access to credit from organised lenders. Most of them are self-financed or get credit from unorganised sources.

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

• Self-financing limits the growth of these MSMEs. On the other hand, high interest rates from unorganised sources makes it difficult for them to earn profits.
  
  The Modi government is looking at various ways to correct this problem. Mudra loans, online loans facilities are being made available to MSMEs.
  
  Slowly but surely, lenders are sensing the huge opportunity that lies ahead for this sector.
  
  Banks and other financial firms with prudent lending practices and strong distribution networks will benefit from this megatrend.

Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from this megatrend.

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.

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!

Read the latest Market Commentary

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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Indian Share Market Update: Top Gainers and Losers