Sensex Ends 232 Points Higher; Finance and Banking Stocks Witness Buying

Wed, 6 May Closing

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Indian share markets traded on a volatile note throughout the day and ended higher.

Benchmark indices opened on a negative note today as rising coronavirus cases and grim growth projections dampened investor sentiment. However, losses were recovered thereafter as indices rose over 1.5%

Gains were largely seen in the finance sector, banking sector and telecom sector, while FMCG stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 232 points (up 0.7%) and the NSE Nifty closed higher by 65 points (up 0.7%).

SGX Nifty was trading at 9,287, up by 104 points, at the time of writing.

The BSE Mid Cap index ended the day up by 0.8%, while the BSE Small Cap index ended up by 0.5%.

Asian stock markets ended on a positive note. As of the most recent closing prices, the Hang Seng was up 1.2% and the Shanghai Composite stood higher by 0.6%.

European stock markets were trading marginally lower at the time of writing, as investors turned cautious eyeing developments over economies lifting lockdown restrictions.

Gold prices are currently trading up by 0.1% at Rs 45,763.

The rupee is currently trading at 75.63 against the US$.

Speaking of stock markets in general, here's what Tanushree Banerjee wrote about the coronavirus pandemic and its effects on the global economy in one of the editions of The 5 Minute WrapUp...

• ...pandemics have had profound economic effects. But in the longer term, the economic effects can be positive.
  
  Is the assumption that Coronavirus could lead to such a massive social and economic change too farfetched?
  
  Not at all!
  
  In fact, the outbreak of Coronavirus exposed the underbelly of the fragile global supply chains, over dependent on China.
  
  And therefore, global manufacturers are bound to seek geographic diversification of resources and imports.
  
  That could mean a massive change in the way businesses are run.

Tanushree believes that the ongoing market crash could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.

For bluechip stocks, she believes the time is ripe to begin buying some of the safest bluechips as there is safety in valuations and the market is offering them at deeper and deeper bargains.

The profits of bluechips (BSE 200 companies) are currently at a decade low as can be seen in the chart below.

A Rebound in Profits Overdue?

Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with.

She has already recommended safe bluechips in the past month and there are several more in her watchlist. You can access them here.

And if you are not a StockSelect subscriber, here's where you sign up.

Moving on, market participants were tracking Kansai Nerolac share price, Yes Bank share price and TCI Developers share price as these companies announced their March quarter results (Q4FY20) today.

Apart from this, market participants were also tracking liquor stocks after some state governments hiked excise duty on liquor.

Some state governments including Andhra Pradesh and Rajasthan, decided to restrict the timings of liquor shops as well as hike excise duty as a step to restrict buying, while the Mumbai Municipal Corporation decided to shut all liquor shops in Mumbai from today.

United Breweries share price, Radico Khaitan share price, United Spirits share price, GM Breweries share price, and Globus Spirits share price declined in the range of 4-7%, on the back of above news.

In news from the chemical sector, shares of Rallis India fell nearly 8% in early trade today after the company reported a 49.6% drop in consolidated profit at Rs 7 million for the quarter ended March 2020.

The Tata group firm had posted a net profit of Rs 13.5 million in the same period a year ago.

The company's total income marginally increased to Rs 3,462.9 million during Q4FY20 as against Rs 3,396.9 million during the quarter ended March 31, 2019.

Expenses rose to Rs 3,698.7 million in Q4FY20 from Rs 3,450.5 million in Q4FY19.

In a BSE filing, the company said, due to the nationwide lockdown, its operations were disrupted at certain manufacturing facilities and depots, as a result of which goods worth Rs 160.4 million could not be dispatched to the domestic market.

Further, the company said its international shipments were also disrupted due to absence of transportation facilities in the last week of March 2020 resulting in lower shipment of Rs 531.8 million.

Rallis India share price ended the day up by 0.2%.

To know more about the company, you can read Rallis' Q4FY20 result analysis on our website.

Moving on to news from the oil & gas sector, shares of oil marketing companies (OMCs) witnessed selling pressure today after the government announced steep hikes in duties on petrol and diesel, raising it by Rs 10 and Rs 13 per litre, respectively.

Shares of HPCL and BPCL slumped over 9% intraday, while Indian Oil Corporation (IOC) fell 6%.

The government on Tuesday said that the Road and infrastructure cess was hiked by Rs 8 for petrol and diesel and the special additional excise duty (SAED) was hiked by Rs 2 per litre and Rs 5 per litre, respectively.

While the road cess will only go into the Centre's holdings, the hike on account of SAED will be passed on to states via devolution at 42%.

This decision comes after several states increased the value-added tax (VAT) on petrol and diesel. The Delhi government on Tuesday increased VAT on petrol and diesel to 30% each.

Reports state that this move is a big negative for OMCs, but it is positive for the economy.

The government needs revenue and this will possibly help kick start the economy, which is staring at a significant downturn with job losses, dismal GDP print due to the disruption caused by Coronavirus outbreak.

What effects the above move have on Indian stock markets and the Indian economy remains to be seen. Stay tuned for more updates from this space.

And 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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