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Sensex Drops 400 Points; Realty Stocks Top Losers
Fri, 23 Mar Closing

After opening the day in red share markets in India  witnessed negative trading activity throughout the day and ended the day well below the dotted line. Sectoral indices too ended the day in red, with stocks in the realty sector and stocks in the metal sector leading the losses.

At the closing bell, the BSE Sensex stood lower by 410 points (down 1.2%) and the NSE Nifty closed down by 117 points (down 1.2%). The BSE Mid Cap index ended the day down 1.4%, while the BSE Small Cap index ended the day down by 1.5%.

Asian stock markets too finished in red, fearing a trade war between US and China. As of the most recent closing prices, the Hang Seng was down by 2.5% and the Shanghai Composite was down by 3.4%. The Nikkei 225 was down by 4.5%. Meanwhile, European markets, too were trading on a negative note. The FTSE 100 was down by 0.6%, The DAX, was down by 1.7% while the CAC 40 was down by 1.6%.

The rupee was trading at Rs 65.03 against the US$ in the afternoon session.

Oil prices were trading at US$ 64.48 at the time of writing.

In news from stocks in the steel sector. Tata Steel share price was in focus today as the company was selected as successful applicant to buy Bhushan Steel.

Tata Steel Ltd has been declared the successful resolution applicant for Bhushan Steel Ltd by the committee of creditors (CoC).

The resolution plan finalised by the creditors will now require approval from the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI).

Bhushan Steel owes about Rs 440 billion to its creditors. As per the resolution plan, Tata Steel has offered upfront cash of about Rs 348 billion to the financial creditors along with Rs120 billion to operational creditors

India's steel industry was just coming out of a rough patch.

Demand was picking up. Steel prices were on the rise. Buyers were lining up to pick up stressed assets. With the expected pick up in the investment cycle, the sector was on the upswing.

India's Steel exports were on a roll.

Then Donald Trump spoiled the party. The US government plans to impose a 25% tariff on steel and a 10% tariff on aluminium..

Is India Prepared to Meet the Ambitious Battery Car Target?


India produces a lot of both commodities but internationally, we are not a big player. The US imports only 2.4% of steel and 2% aluminium from India.

But it's not so simple.

With the new US tariffs, major exporters like South Korea will look to sell in other countries. This would lead to a glut and as a result, lower prices.

This could threaten the nascent recovery in the industry.

Tata Steel share price ended the day down by 2.4%.

Moving on to news from stocks in the energy sector. According to a leading financial daily, Indian Oil Corp (IOC) is set to invest about US$ 3.5 billion in the upcoming financial year.

This investment will be done to expand and upgrade its refineries and boost its marketing network.

The company plans to use internal resources for the capital expenditure and has no plans to raise loans or issue bonds and raise debt.

Cash generation at all its refineries has improved and even the newest at Paradip in eastern India is likely to report a profit for the first time this year, they said.

Expansion of refining and marketing capacities is crucial for the refiner to maintain its leading position in the world's fastest-growing oil consumer. It controlled about 35% of the nation's oil refining capacity and 45% of the domestic petroleum-products market in the year ended March 31, 2017

IOC share price ended the day down by 0.8%.

And here's a note from Profit Hunter:

The Nifty 50 Index traded on a negative note during the week.

On Monday, it opened the session up but slipped lower to end the session 100 points down. It opened gap down on the next trading day but recovered sharply and traded positive until mid-week. But the bulls couldn't hold the gains and the index continued to slip lower. On Friday, the carnage continued as the index opened 146 points gap down on back of global markets sell-off. It finally ended the weekly session 2% down.

Last week, we saw the index trading close to the 200 day moving average (DMA) which could have acted as a good support. But it broke below the 200 DMA. In fact, the index closed just below the 10,000 - 10,100 zone which acted as a good support in the past.

So does this indicate that the index will continue to slip lower? In that case, 9,700 is level to watch out for.

Nifty 50 Index Witnesses Selling Pressure
Nifty 50 Index Witnesses Selling Pressure

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