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Sensex Finishes Flat; M&M Surges 3.4% on Strong Q4 Results
Wed, 31 May Closing

Indian share markets continued to trade flat during the afternoon session. At the closing bell, the BSE Sensex stood lower by 14 points, while the NSE Nifty finished down by 4 points. Meanwhile, the S&P BSE Mid Cap and the S&P BSE Small Cap finished up by 0.9% and 1.1% respectively. Gains were largely seen in consumer durables stocks, realty stocks and auto stocks. Metal stocks and IT stocks witnessed selling pressure.

The Top Five Performers of the BSE 500 Over the Last Five Years

Holding stocks for a number of years and being patient reap large rewards, we took a look at the top five performers in the S&P BSE 500 index over the last five years. The above chart pegs the point to point returns delivered by these companies over this period.

To our pleasant surprise, two of these five stocks happen to have been recommended at different times in our service The India Letter. The India Letter is an effort aimed at guiding its subscribers to make money from what we call The Golden Decade Megatrend, which takes the view that India is going to grow rapidly in the decades to come.

Asian stock markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.23%, while the Nikkei 225 & the Hang Seng fell 0.14% and 0.10% respectively. European markets are mixed today. The FTSE 100 is up 0.32% while the DAX gains 0.08%. The CAC 40 is off 0.15%.

The rupee was trading at Rs 64.54 against the US$ in the afternoon session. Oil prices were trading at US$ 49.57 at the time of writing.

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The global credit rating agency, Moody's Investors Service in its latest report 'Global Macro Outlook' has said that Indian economy will grow by 7.5% in the current fiscal year, 7.7% in 2018-19 and will reach to around 8% in 3-4 years on the back of government's various reforms just ahead of the release of the fourth quarter GDP numbers.

The agency said that the economy will strengthen as the impact of last year's demonetization fades and with the government successfully pushing through several key reforms such as liberalisation of FDI rules in a number of key sectors, July rollout of the Goods & Service Tax (GST) and a national bankruptcy code, noting that these reforms will help reduce inefficiencies and improve trend growth over the long run.

However, the report has pointed that the private sector investment has remained weak despite progress on reforms. On the problem of mounting bad loans, Moody's noted that persistent banking sector weakness from a high proportion of delinquent loans on bank balance sheets will weigh on growth, if not resolved, by constraining credit for investment related activity.

Besides, it said that the inflation rate will rise to around 5% by the end of this year and expects the Reserve Bank of India to hold the policy repo rate steady, holding a neutral stance in this growth environment.

Moving on to news from automobile sector. Mahindra & Mahindra (M&M) share price surged 3.4% in today's trade after the company the company said its net profit in the March quarter increased 26.3% from a year before.

Profit after exceptional items in the three months rose to Rs 8.74 billion from Rs 6.91 billion a year ago. Revenue and other income-that earned from avenues other than its business operations-grew 5.2% to Rs 122.89 billion.

M&M would invest Rs 120 billion in the next three years to continue its growth momentum. Out of this, while Rs 75 billion would be invested in new product development and capacity expansion for Mahindra range of vehicles, Rs 45 billion would go towards investments in group companies as well for acquisitions.

In another development, as per an article in The Economic Times, Tata Motors has set an ambitious target to become third largest commercial vehicle manufacturer globally and have equal rank in passenger vehicle space in the domestic market by 2019.

Reportedly, it has pegged a total investment of Rs 40 billion which will include an investment of Rs 15 billion in the commercial vehicle business while another Rs 25 billion will be used for development of passenger vehicle business.

Tata motors share price finished the trading day down by 0.8% on the BSE.

Glenmark Pharma share price surged 2.1% in today's trade after the company received final approval by the United States Food & Drug Administration (USFDA) for Atomoxetine Capsules USP the generic version of Strattera Capsules of Eli Lilly and Company.

According to IMS Health sales data for the 12-month period ending April 2017, the Strattera Capsules market achieved annual sales of approximately US$1.1 billion.

In news from oil & gas sector, as per an article in The Economic Times, Indian Oil Corp (IOC) and its partners Oil India Ltd and BPCL are in talks to buy 49% stake in Russia's Vankor cluster oilfields to consolidate their presence in the energy-rich Arctic region.

Rosneft, Russia's national oil company that owns the fields, wants to retain a majority stake and is keen to sell only up to 49% stake. In case OVL is accommodated, the entire 49% stake would have to be split between the Indian companies.

OVL may possibly take 26% in proportion of the stake it bought in the main Vankor oilfield. OIL-IOC-BPRL may take 23.9% stake in line with its holding in the main Vankor field.

Besides, the OIL-IOC-BPRL consortium has taken another 29.9% stake in a separate Taas-Yuryakh oilfield in East Siberia for US$ 1.12 billion. The investments have taken the total outlay in Russia this year to US$ 5.46 billion.

Oil & Gas stocks finished the day on a firm note with GAIL share price and IOC share price leading the gains.

And here's a note from Profit Hunter:

Mahindra and Mahindra (M&M) is the top gainer in the Nifty 50 Index - up 4% for the day. Let's have a look at its chart.

After the stock bottomed out at Rs 118 in November 2008, it made a healthy rally to hit a high of Rs 1,433 in August 2014. The stock then traded in a broad range of 1,100-1,400. It broke out if this range on the upside in June 2016, indicating a resumption of the uptrend. But this was a false breakout as the stock again slipped back into the range.

In December, the stock formed a double-bottom pattern near the lower end of the range and rallied strongly.

Today, the stock has again broken out of the range on the upside. The breakout volumes were heavy, indicating buying interest.

So is the breakout real this time around, or will the stock again slip back into the 1,110-1,400 range. Let's wait and watch...

Another False Breakout for M&M?
Another False Breakout for M&M? 

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Jan 16, 2018 03:19 PM