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Sensex Ends 135 Points Lower; Realty and Telecom Stocks Witness Selling
Thu, 18 Apr Closing | Monish Vora, TM Team

India share markets witnessed selling pressure during closing hours and ended their trading session on a negative note.

At the closing bell, the BSE Sensex stood lower by 135 points (down 0.4%) and the NSE Nifty closed down by 44 points (down 0.4%). The BSE Mid Cap index ended the day down 1%, while the BSE Small Cap index ended the day down 1.1%.

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 69.56 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 0.5% and the Shanghai Composite was down by 0.4%. The Nikkei 225 was down 0.8%.

European markets were trading on a mixed note. The FTSE 100 was down by 0.2%. The DAX was trading up by 0.4%, while the CAC 40 was up by 0.1%.

Speaking of markets, the mood in the Indian stock market here changes in a matter of months.

Till February 2019, mutual fund inflows were on a steady decline.

And that's when Tanushree had asked her readers to stay put and not give into the panic.

Holding and buying quality businesses during times of extreme pessimism goes a long way in creating long-term wealth.

The mutual fund data from the March 2019 certainly proves this point.

Rising Mutual Fund Inflows - Is the Market Correction Over?

As can be seen from the chart above, the net inflows into Equity fund in March 2019 (Rs 117 billion) are its highest levels since October 2018.

The reason could be people believing the Modi government will return to power.

Here's what Tanushree wrote about this in one of the recent editions of The 5 Minute WrapUp...

  • While we recommended to not give into panic in February 2019, this time its euphoria we're recommending against.

    Don't fall into the greed trap.

    Hold on to your safe stocks and don't go looking for overvalued stocks. Maintaining your calm when everyone is losing theirs will help you build long-term wealth.

In the news form the banking space, State Bank of India share price was in focus today. Stock of the lender witnessed its biggest intraday drop since March 27 today.

The selling pressure came in after Jet Airways, which has debts of roughly US$ 1.2 billion with the lender, halted its operations indefinitely yesterday.

The carrier flew its last scheduled flight from Amritsar to Mumbai yesterday, as the debt-ridden company decided to suspend its operations on a temporary basis with no cash to run operations any further.

The development comes after lenders led by State Bank of India decided to reject the plea for emergency funds.

Interestingly, the development brings cheers to SpiceJet and Indigo with SpiceJet announcing the addition of six more Boeing 737-800 NG aircraft on dry lease.

Reportedly, these 6 aircrafts are in addition to the 16 B737s and 5 Q400s that the airline will soon induct.

The total number of planes to be inducted in the immediate future now stands at 27. The airline has applied to the Directorate General of Civil Aviation for a No Objection Certificate (NOC) to import the planes. Subject to regulatory approvals the aircraft would begin joining SpiceJet's fleet in the next ten days, the reports noted.

Note that, Jet Airways used to be a frontrunner once.

So, what went wrong?

Well, one of the many reasons was the challenge from the entry of budget carriers. This led to dropping of fares by Jet Airways. Some tickets were sold even below the breakeven cost.

Then, provincial taxes of as much as 30% on jet fuel were added to its expenses. Further, the rise in oil prices was a death blow to their earnings.

On a consolidated level, the company has bled in nine of the last eleven fiscals. In other words, it has kept its bottomline in the black in only two out of the last eleven years.

To know more about the company, you can access to Jet Airways Q3FY19 result analysis and Jet Airways 2018-19 Annual Report analysis on our website.

In the news from the IPO space, specialty chemicals maker Neogen Chemicals' initial public offer (IPO) to raise up to Rs 1.3 billion will open on April 24.

The IPO consists of a fresh issue aggregating up to Rs 700 million by the company and an offer for sale (OFS) of up to 29,00,000 shares by promoters Haridas Thakarshi Kanani and Beena Haridas Kanani.

Neogen Chemicals is one of India's leading manufacturers of bromine-based, and lithium-based, specialty chemicals.

The company manufactures specialty organic bromine-based chemical compounds (Bromine Compounds) and other specialty organic chemical compounds as well as specialty inorganic lithium-based chemicals compounds (Lithium Compounds and together with the Bromine Compounds the Products).

The company had commenced the business operations in 1991, at Mahape, Navi Mumbai manufacturing facility with a few Bromine Compounds and Lithium Compounds.

What response this IPO gets remains to be seen. Meanwhile, we will keep you updated on all the developments form this space.

Speaking of IPOs, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

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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