4 Factors Behind the Sensex Sell-Off, Developments in the IPO Space, and Buzzing Stocks Today

Fri, 19 Mar Pre-Open

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Indian share markets extended losses and ended lower for the fifth straight session yesterday amid spiking US bond yields.

Even an ultra-dovish tone by US Federal Reserve Chairman Jerome Powell on Wednesday was not enough to calm the frayed nerves of global financial markets.

Benchmark indices also witnessed selling pressure tracking mixed cues from Asian peers as investors weighed the impact of rising Covid-19 cases.

At the closing bell yesterday, the BSE Sensex stood lower by 585 points. Meanwhile, the NSE Nifty ended down by 163 points.

ITC was among the top gainers.

HCL Technologies, on the other hand, was among the top losers.

The BSE Mid cap index and the BSE Small cap index ended down by 1.3% and 1.6%, respectively.

On the sectoral front, energy stocks, IT stocks and pharma stocks were among the hardest hit.

Shares of Blue Dart Express and Indian Energy Exchange hit their respective 52-week highs yesterday.

Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 44,901 per 10 grams at the time of closing stock market hours yesterday. Among gold ETFs, Canara Gold ETF and IDBI Gold ETF were among the top gainers.

Speaking of gold, many gold bulls are doubting the long term potential of gold as an investment.

In one of his videos for Fast Profits Daily, India's #1 trader Vijay Bhambwani talks about why you need to seriously consider buying gold now for the long term.

In the video, Vijay talks about the long term potential of gold and explains why it's a good time to consider buying the yellow metal.

Top Stocks in Focus Today

Among the buzzing stocks today will be BHEL.

Bharat Heavy Electricals Limited (BHEL) announced that it has emerged as the lowest bidder at Rs 108 billion for the fleet mode tender floated by the Nuclear Power Corporation of India (NPCIL) for its 6x700 megawatt (MW) Turbine Island Package Projects.

Notably, PHWRs (Pressurised Heavy Water Reactors) are the mainstay of the Indian Nuclear Power Programme and 12 out of 18 operating PHWRs of NPCIL are equipped with BHEL-supplied Steam Turbine Generator sets with the balance from Canada and Ukraine. These sets have continuously been exhibiting excellent performance with Kaiga Unit -1 creating a world record of uninterrupted operation for 962 days, BHEL said in an exchange filing.

Indian Oil Corporation (IOC) share price will also be in focus as the company has entered into a collaboration with Phinergy, an Israeli start-up company specialising in hybrid lithium-ion and aluminium-air/zinc-air battery systems, to form IOC Phinergy Private Limited.

According to a press release, the collaboration took place in the presence of Union Minister Dharmendra Pradhan and Israel Energy Minister Yuval Steinitz.

The joint venture will manufacture aluminium-air systems in India to boost India's flagship programme - "Make in India" and recycle used aluminium to strengthen India's energy security.

Top 4 Factors Why Indian Stock Markets Plunged Yesterday

Surging Bond Yields: The US 10-year Treasury bond yield surged to as high as 1.72% earlier yesterday despite the dovish tone of the US Federal Reserve.

Market participants are of the view that a spike in US 10-year bond yields to 2% will unleash chaos in global financial markets that are anyways quoting rich valuations.

The heat in the US bond market was also felt in the Indian market as the 10-year government bond yields surged past the crucial psychological level of 6.2%.

Rising Covid-19 Cases: Rising Covid-19 cases also dampened investor sentiments. Amid rising cases, Mumbai mayor urged to work together to prevent the lockdown and warned about the necessity of imposing night curfew in the current situation to check the virus spread.

The surging COVID-19 cases in India has sparked fears of a second wave of the pandemic hitting India in the coming weeks that may hamper the recovery of the economy from its first-ever technical recession in several decades.

Vaccine Concerns: Reports that a significant amount of COVID-19 vaccinations in India may be wasted due to lower off-take and a slower-than-expected rollout by the government also sparked concerns that the country may not be able to achieve herd immunity as soon as expected earlier.

Nomura said that it expects 30% of India's population to be inoculated by 2021-end, but at current pace of vaccination the phase-1 rollout may not be finished till next year.

Profit Booking: Apart from the above, losses were also seen as share market succumbed to profit-booking.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

IPO Buzz: Kalyan Jewellers and Nazara Technologies IPO See Good Retail Participation

In news from the IPO space...

The initial public offering (IPO) of Nazara Technologies, which is backed by marquee investors Rakesh Jhunjhunwala and IIFL, was subscribed 8.6 times by noon hours yesterday - the second day of bidding.

The issue received bids for 2.5 crore equity shares against an offer size of 29.2 lakh equity shares.

Non-institutional investors have put in bids 6.6 times more than their reserved portion, while the portion set aside for retail investors has seen a massive 35.4 times subscription and that of employees is subscribed 3.3 times.

Today is the last day of subscription for the IPO.

The company is planning to raise around Rs 5.8 billion through this issue, of which it has already garnered Rs 2.6 billion via anchor book.

Goldman Sachs India, Government of Singapore, Aberdeen Standard Asia Focus, Fidelity Funds, Abu Dhabi Investment Authority, Nomura, Hornbill Orchid India Fund and Steadview Capital Mauritius, invested in the mobile gaming company through anchor book route.

The IPO is an offer for sale (OFS) of 5.3 million shares being sold in the price band of Rs 1,100-1,101 per equity share, representing a 16.7% stake in the company.

To know more, you can read our IPO analysis of the company here: Nazara Technologies IPO: Should You Apply? (requires subscription)

In other news, IPO of Kalyan Jewellers India was subscribed 2.3 times at the time of closing stock market hours on its final day of bidding yesterday.

The public offer received bids for 21.6 crore equity shares against the IPO size of 9.5 crore equity shares.

The IPO size was reduced after the company raised Rs 3.5 billion from anchor investors at the higher end of the price band of Rs 86-87 per share on March 15, a day before the issue opening.

The company is planning to raise Rs 11.8 billion through the IPO which consists of a fresh issue of Rs 8 billion and an offer for sale of Rs 3.8 billion by promoter and investors.

The Warburg Pincus' backed company is selling shares in the price band of Rs 86-87 per share. The issue will close for subscription today.

Kalyan Jewellers will use the proceeds from the share sale for funding its working capital requirements and for general corporate purposes.

In his latest video, co-head of Research at Equitymaster Rahul Shah discusses whether investing in Kalyan Jewellers IPO makes sense from a long term perspective.

You can watch the same here: Kalyan Jewellers IPO: An Honest View

How the above IPOs sail through remains to be seen. Meanwhile, we will keep you updated on all the news from this space.

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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