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Markets will remain closed on 2nd April, 2020 on account of Ram Navami.

Mayhem on Dalal Street, RBI's Press Conference, SBI Cards IPO Debut, and Top Cues in Focus Today
Tue, 17 Mar Pre-Open | Monish Vora, TM Team

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The mayhem continued on Dalal Street yesterday as well as India share markets traded deep in the red with Sensex and Nifty witnessing sharp fall.

Losses were see tracking a sell-off in global markets as a new wave of fear about the spread of the coronavirus and its economic impact gripped investors.

At the closing bell yesterday, the BSE Sensex stood lower by 2,713 points (down 7.9%) and the NSE Nifty stood down by 756 points (down 7.6%).

The BSE Mid Cap index ended the day down 5.9%, while the BSE Small Cap index stood down by 5.7%.

All sectoral indices ended deep in the red with stocks in the metal sector, banking sector and realty sector witnessing maximum selling pressure.

And here's some futures and options data from Vijay Bhambwani, editor of Fast Income Alerts...


Here's what Vijay wrote about the same...

  • NSE F&O turnover was Rs 6,45,831 Crs (Friday Rs 8,07,417 Crs).

    Turnover was lower than Friday and low for a Monday session.

    The market wide average MWPL fell to 19.19% (Friday 19.36%). Figures indicate traders are withdrawing from markets.

    Volatility & bid/offer spreads can rise. Stay sharp.

To track such data on a daily basis and get our latest views on stock markets and more, you can join our Telegram channel here.

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------------------------------

Our Views on the Ongoing Stock Market Crash

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

Here's a snippet of what he wrote:

  • 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.

Our bluechip stock analyst at Equitymaster, Tanushree Banerjee, believes that the ongoing market crash could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.

Here's what she has to say more on this...

  • Companies across the globe, will seek to diversify geographic risks after this crisis.

    India could see a big spurt in new factory capacities and fresh fund inflows. This trend, can widen the moats of the strongest bluechips.

    I believe, it can also help multiply their profits 4 to 8 times over the next decade.

    The time is ripe for StockSelect subscribers to begin buying some of the safest bluechips, right now.

    There is safety in valuations as the market offers them at deeper and deeper bargains.

Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with. She has already recommended 4 safe bluechips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Tread the Coronavirus Crisis Safely (requires subscription)

And if you are not a StockSelect subscriber, here's where you sign up.

In the video below, Tanushree has also explained how buying the above stocks at bargain prices is a once in a decade opportunity.

Our smallcap analyst at Equitymaster, Richa Agarwal, believes this is a time to not panic and remain invested in the good quality smallcap stocks, irrespective of the volatility.

She believes 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%.

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Tanushree's Top 7 Stocks to Profit from the Corona Crash

Our Co-Head of Research, Tanushree Banerjee, says there's an irreversible tail wind in India which has the potential to make Indians extremely rich in about a decade.

And with the corona crash, the opportunity today has only become even more exciting.

In fact Tanushree has identified 7 stocks she believes could do exceedingly well in 2020 and beyond.

Tanushree says those who get into these 7 stocks right now have the chance to make potentially LIFE-CHANGING returns in the coming years.

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------------------------------

Key Highlights from RBI's Press Conference

Amid wild speculation that the Reserve Bank of India (RBI) may follow its global peers and announce an emergency rate cut, the banking regulator had called a press conference yesterday.

Here are some of the key highlights from the same:

RBI Governor Shaktikanta Das said the interest rate decision will be taken in the monetary policy committee (MPC) meeting and he's not ruling out any possibility on an interest rate cut.

He said that the committee is estimating impact of COVID-19 and will give its growth estimates in MPC. As per him, India is relatively insulated from global value chain, but there will be some impact.

As regards to the economic activity amid the coronavirus outbreak, Das said that already sectors like tourism, hospitality, airlines and others are being affected due to the outbreak of coronavirus. There is considerable uncertainty about duration of pandemic and the RBI has been taking some calibrated measures to ensure financial markets and institutions remain sound and resilient.

It was stated that the RBI has several instruments at its command and stands ready to take all necessary measures to mitigate impact of COVID-19 on Indian economy.

It also proposed some steps based on the current evaluation such as to propose to conduct another 6 months US dollar/ Rupee sell-buy swap on March 23.

The RBI will also conduct long term repo operations (LTRO) in multiple tranches up to a total amount of Rs 1 lakh crores at the policy rate. This will be followed by a review of performance of LTRO. (The LTRO is a tool under which the central bank provides one-year to three-year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral)

Addressing the next steps for Yes Bank, Das said the moratorium on Yes Bank will be lifted on March 18 at 6 pm and new board will assume position on March 26 and administrator will vacate office. He assured depositors their money is completely safe and there is no need for worry saying that in the history of Indian banking, depositors of SCBs have never lost money. It was announced that depositors can withdraw their money after 6pm on March 18.

Das announced that if it is required, RBI will support Yes Bank with respect to liquidity.

He also added that interactions with the banks investing in Yes Bank gives the RBI committee confidence that the revival plan will work out.

SBI Cards IPO Makes a Tepid Debut. What's Next?

In news from the IPO space, SBI Cards and Payment Services share price made a tepid debut on bourses yesterday.

The stock of the company got listed at Rs 658, a discount 12.85% over its issue price of Rs 755.

This was the first listing in the current calendar year.

The credit card issuer had fixed final IPO price at Rs 755 per share, the higher end of price band (of Rs 750-755) and the employees received shares at a discount of Rs 75 per share to the final price.

The public issue was subscribed 26.5 times during March 2-4 but was less looked after than market expectations due to weak market conditions after wide-spreading novel coronavirus.

If you recall, the market correction had started a week prior to the opening of the SBI Cards IPO. Just the week before the IPO opened for subscription, the Sensex had tanked 7% in unison with the global stock market sell-off.

But investors were still optimistic about the IPO. The grey market premiums were in the range of Rs 250-300 per share. Investors were expecting listing-day gains of about 25-30% or more.

But as the market crash got deeper, the market sentiments have completely changed.

If you received allotment in the IPO, you're most likely evaluating if you should bite the bullet and exit the stock on the listing day itself, or hold it for the long run.

In yesterday's edition of The 5 Minute WrapUp, Ankit Shah has offered some insights on what should one do with the IPO if you have received the allotment. You can read his entire article here: Did the SBI Cards IPO Test Positive for Coronavirus?

Yes Bank Saga Continues

In news from the banking sector, Yes Bank share price will be in focus today as the crisis hit bank on Saturday reported a record loss of Rs 185.6 billion for Q3 FY20 due to a sharp jump in bad loans and higher provisioning. Also, as per the final reconstruction scheme for Yes Bank, 75% of the shareholding of the shareholders holding 100 or more shares will be locked-in for three years.

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

Apart from the above, the Index Maintenance Sub-Committee (IMSC) has decided to accelerate the removal of Yes Bank from Nifty50, Nifty Bank and all Nifty equity indices with effect from March 19.

While Yes Bank will be excluded from the Nifty50 index, Shree Cement will be included on March 19 and the replacement will also be applicable to the Nifty50 Equal Weight index.

Meanwhile, Bandhan Bank will replace Yes Bank in the Nifty Bank index and Nifty Private Bank index.

Yes Bank will also be removed from the Nifty 500 index and Sterling and Wilson Solar will be included in that index.

Adani Transmission will replace the private lender in the Nifty 100 index.

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.

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 one of the editions 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.

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

PRESTIGE ESTATES Surges by 6%; BSE REALTY Index Down 3.0% (Today's Market)

Apr 1, 2020 03:33 PM

PRESTIGE ESTATES share price has surged by 6% and its current market price is Rs 185. The BSE REALTY is down by 3.0%. The top gainers in the BSE REALTY Index are PRESTIGE ESTATES (up 6.5%) and SOBHA LIMITED (up 5.6%). The top losers are OMAXE LTD (down 0.5%) and GODREJ PROPERTIES (down 1.0%).

NESCO Plunges by 5%; BSE CAPITAL GOODS Index Down 2.6% (Today's Market)

Apr 1, 2020 03:33 PM

NESCO share price has plunged by 5% and its current market price is Rs 491. The BSE CAPITAL GOODS is down by 2.6%. The top gainers in the BSE CAPITAL GOODS Index are FINOLEX CABLES (up 7.2%) and GRAPHITE INDIA (up 5.0%). The top losers are NESCO (down 5.4%) and BHARAT ELECTRONICS (down 6.6%).

CAPRI GLOBAL CAPITAL Plunges by 8%; BSE 500 Index Down 3.3% (Today's Market)

Apr 1, 2020 03:33 PM

CAPRI GLOBAL CAPITAL share price has plunged by 8% and its current market price is Rs 172. The BSE 500 is down by 3.3%. The top gainers in the BSE 500 Index are JINDAL SAW LTD (up 8.3%) and GUJ. STATE PETRONET (up 7.5%). The top losers are CAPRI GLOBAL CAPITAL (down 8.5%) and MRF LTD. (down 5.2%).

HCL TECHNOLOGIES Plunges by 5%; BSE IT Index Down 5.6% (Today's Market)

Apr 1, 2020 03:33 PM

HCL TECHNOLOGIES share price has plunged by 5% and its current market price is Rs 440. The BSE IT is down by 5.6%. The top gainers in the BSE IT Index are NIIT TECHNOLOGIES (up 2.9%) and FIRSTSOURCE SOL. (up 2.5%). The top losers are HCL TECHNOLOGIES (down 5.2%) and ORACLE FINANCIAL (down 5.2%).

MAHINDRA HOLIDAYS Plunges by 6%; BSE 500 Index Down 3.3% (Today's Market)

Apr 1, 2020 03:31 PM

MAHINDRA HOLIDAYS share price has plunged by 6% and its current market price is Rs 141. The BSE 500 is down by 3.3%. The top gainers in the BSE 500 Index are PRESTIGE ESTATES (up 8.0%) and JUBILANT LIFE SCIENCES (up 7.9%). The top losers are MAHINDRA HOLIDAYS (down 6.5%) and MRF LTD. (down 5.2%).

Indian Indices Extend Fall; Kotak Mahindra Bank & Tech Mahindra Top Losers (Today's Market)

Apr 1, 2020 12:30 pm

The BSE Sensex is trading down by 1,064 points, while the NSE Nifty is trading down by 304 points.

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