Sensex Ends 324 Points Lower; Metal and Telecom Stocks Witness Selling

Thu, 25 Apr Closing

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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 324 points (down 0.8%) and the NSE Nifty closed down by 84 points (down 0.7%). The BSE Mid Cap index ended the day down 0.6%, while the BSE Small Cap index ended the day down 0.1%.

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

The rupee was trading at 70.23 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 0.9% and the Shanghai Composite was down by 2.4%. The Nikkei 225 was up 0.5%.

European markets were trading on a negative note. The FTSE 100 was down by 0.3%. The DAX was trading up by 0.04%, while the CAC 40 was down by 0.17%.

Speaking of markets, the mood in the Indian stock market 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 from the automobiles sector, Maruti Suzuki share price was in focus today as the country's largest passenger vehicle maker reported a 5% year-on-year (YoY) degrowth in March quarter profit. The fall here was seen on the back of weak operating performance and muted sales volume.

Net profit during the quarter declined to Rs 17.9 billion, from Rs 18.8 billion in same period last year.

The company said that this quarter was marked by adverse foreign exchange rates and commodity prices, higher depreciation and higher sales promotion expenses partially offset by cost reduction efforts.

On a standalone basis, revenue from operations grew by 1.4% YoY to Rs 214.6 billion in Q4 with sales volume degrowth of 0.7% YoY.

At operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 25% YoY to Rs 22.6 billion and margin contracted 369 bps to 10.55% in January-March period, hit by adverse forex variations.

The company sold 4,58,479 vehicles during the quarter.

The company recommended a dividend of Rs 80 per share for financial year 2018-19, the same as that of last year.

Earlier this week, the company launched a new 1.2 litre DUALJET, DUAL VVT BS VI engine with next generation Smart Hybrid technology in Baleno, a premium hatchback.

The new BS VI compliant Baleno (Petrol) with Smart Hybrid will be available at NEXA showrooms across the country.

Note that automobile companies have shifted to low gear and demand has flattened across the board. NBFC crisis, followed by lower off-tick of volumes and increasing competition has taken a major toll on automobile original equipment manufacturer (OEMs).

According to reports, major dealers across the country have been burdened with high inventory prompting OEMs to re-align their production.

While private vehicles (PVs) have been facing stiff task with dealers across geographies grappling with higher inventory, commercial vehicles (CVs) are seeing some revival led by fresh disbursal by NBFCs.

Also, speaking of automobiles sector, one thing we must keep in mind is that not all auto companies will make money over time. And also, you shouldn't stay away from auto stocks altogether.

Even Tanushree Banerjee, Co-head of research at Equitymaster believes that there are businesses in this sector that you cannot ignore. She is particularly talking about the blue-chip auto stocks.

She believes, this could be the opportunity long term investors were waiting for.

In the news from the telecom sector, Dish TV India share price was in focus today as Telecom regulator Telecom Regulatory Authority of India (TRAI) has directed the company to comply with the provisions of the new framework for broadcasting and cable TV services, acting on consumer complaints pertaining to the operators' specific offering and grievance redressal helpline.

As per complaints, the DTH operator is forcefully offering a bouquet of free-to-air channels with no choice to subscribers and without their consent, the TRAI directive said on its website.

TRAI, which has promised strict action against those cable TV and direct-to-home (DTH) players who are found violating its new tariff order and regulatory regime, had earlier this week also pulled up Bharti Telemedia on similar grounds.

How this development pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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