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Sensex Continues Momentum; Telecom Sector Up 1.9%
Wed, 10 May 11:30 am

After opening the day on a positive note, Indian share markets have continued their momentum and are presently trading in the green. Sectoral indices are trading on a positive note with stocks in the telecom sector and FMCG sector leading the gains.

The BSE Sensex is trading up 230 points (up 0.8%) and the NSE Nifty is trading up 62 points (up 0.7%). The BSE Mid Cap index is trading up by 0.9%, while the BSE Small Cap index is trading up by 0.8%. The rupee is trading at 64.62 to the US$.

Indian share markets are trading on a positive note today. Most of the buying interest is seen on the back of Indian Metrological Department's (IMD) forecast of a normal rainfall this calendar year and positive cues from Asian markets.

Also, the ongoing earnings season has fueled the ongoing rally seen in domestic markets of late.

This brings us to the question of how can one make money in a rising market?

I believe a few super investors could provide the clue. These are the guys who've beaten the markets black and blue and have an eye for multi bagger stocks.

With respect to which super investors to follow, my colleague Kunal and Rohan have could be of great help courtesy their project, The Superinvestors of India.

To know more about these superinvestors and their stock picking approach, download a free copy of - The Super Investors Of India.

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In the news from the IPO space, Investors are tracking the Rs 12 billion IPO of state-owned Housing and Urban Development Corporation (HUDCO) for which the bidding process started yesterday. The issue was oversubscribed 3 times on the second day of the offer yesterday.

The firm is a wholly-owned government company. The company has 46 years of experience in providing loans for housing and urban infrastructure projects in India.

To know our view on the HUDCO IPO, you can visit our IPO page.

Speaking of IPOs, a dozen of IPOs is lined up in the upcoming months. And given the buoyancy surrounding IPOs, which can be seen from the huge retail participation in some of the recent IPOs, market participants are looking forward to most of the upcoming issues.

But no matter what picture the present trend paints, one should look at the fundamentals of the business and the attractiveness of valuations in each and every IPO.

In case you wish to run IPOs through a handy checklist, you can download our Handbook of IPOs.

As per a leading financial daily, large IT services companies including Infosys, Wipro, Cognizant and Capgemini are all in process of laying off employees on a scale not seen since the 2008-10 downturn.

Being the target of anti-immigration and protectionist rhetoric of Mr Trump's policies, Indian IT outsourcing companies are applying for fewer US work visas, and bringing outsourced Indian employees back home.

This trend is already visible. As per an article in the Business Standard, the number of H-1B applications fell 16% this year, the first decline in five years.

A more visible example can be drawn from Infosys Ltd. The company is opening a new development center in Indiana in August where it hopes to create some 2,000 jobs for Americans by 2021.

One must note that large Indian IT companies, on an average generate more than 50% of their revenues from the US clients, as can be seen from the chart below.

Will Trump Mania Impact IT Companies Revenues from US?

These companies have built a strong client base over the years in the US market. If the suggested changes for immigration get cleared, the cost component for the Indian IT companies will go up. The need to reduce their US exposure and move to other geographies is a given.

That said, Indian IT companies will also need to rise to Trump's challenges.

Fortunately, most of these companies were already gearing up for the above developments. Trump may have only accelerated their defense.

So if you aren't worried about the revenue guidance in the coming quarters due to the Trump policies, you need to do just one thing: Stay vigil on valuations. As you never know, the Trump crash may be an opportunity to act on not just IT but lots of other safe stocks as well.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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Nov 23, 2017 (Close)