Sensex Up Over 800 Points; L&T, Bajaj Finance and ICICI Bank Surge 6%

Wed, 13 May 12:30 pm

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Share markets in India are presently trading on a strong note. Indian stock markets staged a gap up opening today as investors were optimistic over the announcement of Rs 20 lakh crore economic relief package.

However, benchmark indices have trimmed some of their early morning gains but are still trading over 2.5% higher.

The BSE Sensex is trading up by 807 points, up 2.6%, while the NSE Nifty is trading up by 229 points.

The BSE Mid Cap index is trading up by 1.6%, while the BSE Small Cap index is trading up by 1.9%.

Shares of L&T and ICICI Bank gained over 6%, while Bajaj Finance, Ultratech Cement, and Axis Bank surged 5%.

On the sectoral front, gains are largely seen in the banking sector, capital goods sector, and finance sector.

The rupee is currently trading at 75.36 against the US$.

Note that the coronavirus impact has shaken markets worldwide. Businesses are seeing unprecedented shifts in a virus struck, locked down economy.

As per Richa Agarwal, editor of our premium smallcap service Hidden Treasure, there are robust smallcap businesses that are not just resilient but likely to emerge stronger from this crisis.

Richa has shared her views on these smallcaps, in the video below. Tune in now...

Moving on, market participants are tracking Maruti Suzuki share price, Kotak Mahindra Bank share price and Siemens share price as these companies are slated to announce their March quarter results (Q4FY20) later today.

In news from the commodity space, gold and silver prices slipped today as the government announced a stimulus package worth Rs 20 lakh crore, which includes previously announced monetary measures by the Reserve Bank of India (RBI).

Prime Minister Narendra Modi on Tuesday announced a much-awaited stimulus package to prop up the economy amid a slowdown made worse by the coronavirus pandemic.

The details of the package are to be unveiled by Finance Minister Nirmala Sitharaman at 4 PM today.

Note that this combined package works out to 10% of the GDP, making it among the most substantial in the world after the financial packages announced by the United States, which is 13% of its GDP, and by Japan, which is over 21% of its GDP.

Gold June futures on Multi Commodity Exchange (MCX) slipped 0.2% to Rs 45,538 per 10 grams.

Silver futures dropped 0.3% or Rs 146 to Rs 42,908 per kg.

Globally, gold prices edged higher today as concerns that a second wave of coronavirus infections may be emerging in many countries weighed on riskier assets.

Spot gold climbed 0.1% to US$ 1,704.23 an ounce. US gold futures gained 0.1% to US$ 1,708.10.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.24% to 1,083.66 tonnes on Tuesday.

Speaking of gold, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

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

• "In fact, gold has delivered double-digit gains in 10 of the last 15 years.
  
  During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).
  
  During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.
  
  One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment."

Meanwhile, Apurva Sheth, lead chartist at Equitymaster, talks about a reliable investing signal, which is indicating that gold prices will go higher.

Tune in to his video here...

Moving on to news from the pharma sector, Jubilant Life Sciences share price and Cipla share price are in focus today.

Both the pharma firms have signed non-exclusive licensing pacts with US-based Gilead Sciences Inc to manufacture and sell Remdesivir in 127 countries.

According to the statements issued, both the firms will have the right to register, manufacture and sell Gilead's investigational drug Remdesivir in 127 countries including India.

US-based Gilead Sciences said that it has signed non-exclusive licensing agreements with five generic drug makers in India and Pakistan to expand the supply of antiviral drug remdesivir.

According to the agreement, Cipla, Hetero Labs, Jubilant Life Sciences, Mylan, and Pakistan based Ferozsons Labs will manufacture and sell remdesivir.

Gilead had earlier indicated that it was working to build a global consortium to expand the production of remdesivir and make it available across countries.

Remdesivir is an investigational antiviral therapy developed by Gilead and it recently received Emergency Use Authorization (EUA) by USFDA to treat Covid-19.

Speaking of the pharma sector, in December 2019, co-head of Research at Equitymaster, Tanushree Banerjee had predicted that pharma could be the sector to see a big rebound in 2020.

And rightly so, most pharma companies have re-emerged as the safer bets for investors in the ongoing market turmoil. Last month, the Indian rupee touched a new record low of Rs 76.92 against the US dollar. Most pharma companies generate their revenues through exports. Hence, a depreciating rupee is a positive development for them.

As per Tanushree, in a post Covid-19 world, healthcare expenditures globally will see a big rejig.

Tanushree has her eyes on an exciting tech stock. The company in question is developing its medical division. It's focusing on telemedicine, which Tanushree believes will be a huge growth driver in a post Corona world.

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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