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Sensex Ends 355 Points Lower; Telecom and Realty Stocks Witness Selling
Mon, 25 Mar Closing | Monish Vora, TM Team

India share markets continued their downtrend and ended their trading session on a negative note.

At the closing bell, the BSE Sensex stood lower by 355 points (down 0.9%) and the NSE Nifty closed down by 103 points (down 0.9%). The BSE Mid Cap index ended the day down 1.1%, while the BSE Small Cap index ended the day down 1.2%.

Sectoral indices ended in the red with stocks in the realty sector and telecom sector witnessing most of the selling pressure.

The rupee was trading at 68.84 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 2% and the Shanghai Composite was down by 1.9%. The Nikkei 225 was down 3%.

European markets were trading on a mixed note. The FTSE 100 was down by 0.2%. The DAX was trading up by 0.1%, while the CAC 40 was down by 0.1%.

In the news from commodity space, crude oil was witnessing selling pressure today.

Losses were seen on the back of concerns of a sharp economic slowdown outweighed supply disruptions from the Organization of the Petroleum Exporting Countries' (OPEC) production cutbacks and US sanctions on Iran and Venezuela.

Note that crude oil prices were near 2019 highs last week, supported by supply cuts led by producer club OPEC. Reportedly, US sanctions against oil producers Iran and Venezuela are boosting prices.

Last week, the OPEC scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until at least June, when the next meeting is scheduled.

The OPEC and non-affiliated allies like Russia - known as the OPEC+ alliance - have been withholding around 1.2 million barrels per day (bpd) in crude supply from the start of the year to tighten markets and prop up prices.

US crude oil output has soared by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making America the world's biggest producer ahead of Russia and Saudi Arabia.

On the demand-side, there is concern that an economic slowdown as well as improving energy efficiency and the emergence of alternative transport fuels will erode oil consumption.

In the news from the IT space, Tech Mahindra share price was in focus today. The stock of the company witnessed buying interest today after its Rs 19.5-billion buyback offer opened for subscription today. The subscription will close on April 5. The tech major plans to buy back 20.58 million shares at Rs 950 a share.

Speaking of buybacks, at Equitymaster, we believe, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible use it to your advantage to rake in some cash.

As per Rahul Shah, co-head of Research, investors should not assume buybacks are always good. Here's an excerpt of what he wrote in one of the editions of The 5 Minute Wrapup:

  • The reason behind the buyback must be investigated. At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.

The topic also brings us to ask: Do buy-backs offer an arbitrage opportunity for retail investors? Ankit Shah has answered this question in one of the editions of Equitymaster Insider. You can access the issue here (requires subscription).

In the news from the currency space, the Indian rupee witnessed selling pressure today. It slipped more than 20 paise in the morning trade today. This was seen after a loss of 12 paise against the US dollar on Friday.

The domestic currency, however, still remains the best performing emerging market currency over last one month gaining over 3%.

Asia's worst-performing currency took five weeks to become its best last week.

The turnaround was fueled by the improved chances of Prime Minister Narendra Modi winning a second term amid recent tensions between India and Pakistan.

The optimism has led to local shares and debt luring robust flows, which have turned the carry-trade returns on the rupee to the highest in the world in the past month.

The rupee came under pressure last week due to rising crude pressure and a caution ahead of the outcome of the Federal Open Market Committee (FOMC) meeting.

Losses for the rupee today were also seen on account of some buying in American currency by banks and importers.

Note that the US$ is witnessing buying despite the Fed's decision to take a pause in raising rates last week.

Now speaking of Fed rate policy impact on India, how has the Fed rate hike impacted Indian stock markets in the past?

The past decade has seen Fed rates at historical lows, but it wasn't always the case.

The period from 2003-2006 saw Fed rates increase from 1% to 5.25%.

How did the Indian stock market fare during this time?

Do US Interest Rate Hikes Impact Indian Markets?

Well, if you are a long-term investor, you have nothing to worry about.

The Sensex went up by almost 3 times from 3,500 to more than 10,000 during the same period.

The rise was supported by strong earnings growth during the same period.

It further emphasizes the importance of fundamentals in the long run.

Look out for quality stocks with a history of strong earnings growth and sound fundamentals.

The noise surrounding the decisions of the US Fed might just present the right opportunity for you to buy safe stocks.

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

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Feb 19, 2020 03:32 PM

QUESS CORP. LTD share price has plunged by 5% and its current market price is Rs 585. The BSE IT is up by 0.1%. The top gainers in the BSE IT Index are FIRSTSOURCE SOL. (up 4.7%) and TATA ELXSI (up 3.7%). The top losers is QUESS CORP. LTD (down 5.4%).

VOLTAS at All Time High; BSE CAPITAL GOODS Index Up 0.3% (Today's Market)

Feb 19, 2020 03:18 PM

VOLTAS share price has hit an all time high at Rs 736 (up 6.1%). The BSE CAPITAL GOODS Index is up by 0.3%. Among the top gainers in the BSE CAPITAL GOODS Index today are VOLTAS (up 6.1%) and SCHAEFFLER INDIA LTD (up 0.4%). The top losers include DILIP BUILDCON LTD (down 0.1%) and LAKSHMI MACHINE (down 0.2%).

OIL INDIA Surges by 5%; BSE OIL & GAS Index Up 1.6% (Today's Market)

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OIL INDIA share price has surged by 5% and its current market price is Rs 139. The BSE OIL & GAS is up by 1.6%. The top gainers in the BSE OIL & GAS Index is OIL INDIA (up 5.2%).

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Feb 19, 2020 03:04 PM

WOCKHARDT share price has surged by 11% and its current market price is Rs 374. The BSE HEALTHCARE is up by 2.0%. The top gainers in the BSE HEALTHCARE Index are WOCKHARDT (up 11.1%) and IPCA LABS (up 5.9%). The top losers are PROCTER & GAMBLE HEALTH (down 0.1%) and SANOFI INDIA (down 0.2%).

NIPPON LIFE INDIA AMC Surges by 10%; BSE 500 Index Up 1.2% (Today's Market)

Feb 19, 2020 03:02 PM

NIPPON LIFE INDIA AMC share price has surged by 10% and its current market price is Rs 433. The BSE 500 is up by 1.2%. The top gainers in the BSE 500 Index are NIPPON LIFE INDIA AMC (up 10.0%) and AUROBINDO PHARMA (up 19.0%). The top losers are OBEROI REALTY and FINOLEX CABLES .

Indian Indices Trade Higher; Nestle & Reliance Industries Top Gainers (Today's Market)

Feb 19, 2020 12:30 pm

The BSE Sensex is trading up by 281 points, while the NSE Nifty is trading up by 87 points.

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