Sensex Ends 262 Points Up; ONGC & Tata Steel Top Gainers

Fri, 25 May Closing

   Previous Close   

   09:30 am   

   12:30 pm   

Indian share markets ended the day on a strong note. At the closing bell, the BSE Sensex finished higher by 262 points. While, the NSE Nifty finished up by 91 points. Meanwhile, the <>S&P BSE Midcap Index ended down by 0.1% while S&P BSE Small Cap Index ended up by 0.1%.

Barring consumer durables stocks, all sectoral indices ended the day in green with energy stocks and metal stocks leading the gainers.

Overseas, Asian stock markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.1%, while the Hang Seng led the Shanghai Composite lower. They fell 0.5% and 0.4% respectively. European markets are higher today with shares in Germany leading the region. The DAX is up 1% while France's CAC 40 is up 0.6% and London's FTSE 100 is up 0.2%.

The rupee was trading at Rs 68.26 against the US$ in the afternoon session.

In the news from the banking sector, IDBI Bank was in focus today as the state-run lender reported its results for quarter ended March 2018.

The bank reported a loss of Rs 56.6 billion during the quarter against a loss of Rs 32 bn posted in the corresponding quarter last year.

Net interest income during the quarter slipped 44% to Rs 9.2 bn against Rs 16 bn in the same quarter last year.

The percentage of gross non-performing assets jumped to 27.9% in Q4FY18 over 21.3% in Q4FY17 and 24.7% sequentially.

The percentage of net non-performing assets jumped to 16.7% against 16% on quarter-on-quarter (QoQ) basis and the amount of gross non-performing assets jumped to Rs 555.8 bn against Rs 447.5 bn on year-on-year basis.

IDBI Bank share price closed the day down by 2.4% on the BSE today.

Note that most of the public-sector banks reported losses in their fourth quarter results on the back of higher provisions for non-performing assets (NPAs) and bad loans.

PSB's are in the spotlight for their growing bad loan problems and the painful issue of willful defaulters.

Banks, in principle, must be careful about not extending loans to borrowers with poor creditworthiness or payment track record. That too, irrespective of the size of the borrower.

However, the data from State Bank of India shows that when it comes to big corporate borrowers, our banks literally look the other way. The share of large corporates, in total advances of the banking sector, has almost remained unchanged over past three years (at an average of 55%).

However, their contribution to incremental slippages has been huge. At one point, the big corporate borrowers accounted for nearly 90% of total NPAs of the sector.

Therefore, according to us, banks with large corporate books deserve a lower valuation if they can't keep NPAs in check.

While the bad loans struggle at PSBs has been going on since a decade, bureaucracy and a lack of autonomy have ensured the sub-optimal profitability and asset quality of these state-run banks.

That's the reason we've been wary of PSU banks since 2014. This was well before the market had caught a whiff of the NPA problem. We've recommended just two large PSU banks in StockSelect since then...and already successfully closed both of them.

In the news from global financial markets, as per a leading financial daily, the Indian government on Thursday raised import duties up to 100% on five products, including wheat, shelled almond, walnut, and protein concentrate, which are imported from the US and other developed nations.

As per the news, the government, the Finance Ministry invoked emergency powers to increase import duties under Section 8A of the Customs Act and increased basic customs duty on walnut in shell from 30% to 100%.

The government last week had told WTO that it would raise duties by up to 100% on 20 such products such as almonds, walnut, wheat, apple and specific motorcycles imported from the US, if Washington fails to roll back high tariffs on certain steel and aluminum items.

Note that US President Donald Trump followed through on his pledge to impose stiff tariffs on imported steel and aluminium, while excluding Canada and Mexico and leaving the door open to sparing other countries on the basis of national security. In March, he signed two proclamations that levied 25% tariff on steel and 10% tariff on aluminum imports from all countries except Canada and Mexico.

He also warned there would be more tariffs coming, saying he plans to proceed with what he has called reciprocal taxes on imports from countries that charge higher duties on US goods than the US now charges on their products.

As for domestic markets, the above actions by Trump brought concerns for Indian metal companies.

India's steel industry was just coming out of a rough patch. Demand was picking up. Steel prices were on the rise. Buyers were lining up to pick up stressed assets. With the expected pick up in the investment cycle, the sector was on the upswing. And steel exports were on a roll, as can be seen from the chart below:

Is the Steel Sector's Recovery Under Threat?

However, Donald Trump has now spoiled the party with his plans to impose the above tariffs. India produces a lot of both commodities but internationally, we are not a big player. The US imports only 2.4% of steel and 2% aluminium from India.

But it's not that simple.

With the new US tariffs, major exporters like South Korea will look to sell in other countries. This would lead to a glut and as a result, lower prices across the industry. As Ankit wrote in one of the editions of the Equitymaster Insider...

• If metal producers are deterred from selling their goods in the US, they will come looking for other markets to sell their produce. This is likely to create an 'excess-supply' situation in those markets.
  
  What happens when there's too much supply? Basic economics says that when supply increases more than the growth in demand, prices decline. So, Indian metal producers are likely to be faced with the possibility of lower metal prices. This will impact their revenues and profitability.

You can read the entire article here (requires subscription).

The above development would mean lower revenue and profitability for Indian metal companies as well and threaten the nascent recovery in the industry.

How exactly this trade war will unfold is something to watch out for. We'll keep you updated on all the developments from this space.

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

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

10 results 25 results 50 results 100 results All results

Indian Share Market Update: Top Gainers and Losers