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Sensex Ends 166 Points Higher; Metal and Banking Stocks Witness Buying
Tue, 11 Jun Closing | Monish Vora, TM Team

Indian share markets traded on a positive note most of the day and ended higher. Gains were seen in the metal sector, banking sector and energy sector, while FMCG stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 166 points (up 0.4%) and the NSE Nifty closed higher by 43 points (up 0.4%). The BSE Mid Cap index ended the day up 0.8% and the BSE Small Cap index ended the day up by 0.2%.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 0.8% and the Shanghai Composite was up by 2.6%. The Nikkei 225 was up 0.3%.

The rupee was trading at 69.44 against the US$.

In the news from macroeconomic space, former chief economic advisor Arvind Subramanian believes India's average annual growth between 2011-12 and 2016-17 may have been overestimated by about 2.5 percentage points.

In a new research paper, made public early morning today, Subramanian has pointed out that that instead of the reported growth of 6.9% between 2011 and 2016, actual growth was more likely to have been between 3.5% and 5.5%.

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The paper traces "part of the overestimation" to a key methodological change in the way India calculated GDP.

Specifically, it points out that while formal manufacturing growth moved reasonably with other indicators of manufacturing such as the Index of Industrial Production numbers in the pre-2011 period, they diverged starkly thereafter.

Similarly, formal manufacturing growth is positively correlated with manufacturing exports in the pre-2011 period but puzzlingly becomes negatively correlated thereafter.

In an article in The Indian Express early morning today, Subramanian mulls over the consequences of reduced growth during this period.

So, what does this mean for India? Has the Indian economy slowed down much more than expected?

We don't know. But we do know that over the next few weeks a lot of ink and clicks are going to be devoted to understanding the past.

While there's some merit to that effort...we believe a more beneficial exercise may be to understand what lies ahead.

You see, we believe that India is destined to prosper.

In fact, as per co-head of research, Tanushree Banerjee, there are certain irreversible trends which will set the stage for massive growth in India over the next decade...leading to what she calls the Rebirth of India.

In all, she has discovered 50 irreversible trends that are changing our country for the better. These changes will be permanent, and they will have huge consequences for wealth creation in the stock market.

Tanushree has already identified 7 stocks that are likely to benefit from this trend. She believes these stocks are in the right place at the right time. They're the best stocks to buy on the journey to Sensex 100,000.

In the news from the finance sector, Indiabulls Housing Finance share price was in focus today.

Stock of the company witnessed selling pressure today after a writ was filed in the Supreme Court on Monday against Chairman Sameer Gehlaut for misappropriation of Rs 980 billion public money.

As per an article in a leading financial daily, a plea was filed in the Supreme Court on Monday seeking legal action against the company, its chairman and directors for alleged misappropriation.

The petition alleged that money was siphoned off by Sameer Gehlaut, the chairman of the firm for their personal use.

In response, the company said that the above allegations were bizarre as the total loans on the books were approximately 900 billion.

It would be interesting to see how this development pans out. Meanwhile, we will keep you updated on all the updates from this space.

Speaking of non-banking financial companies (NBFCs), note that NBFCs were flush with funds from banks, insurance companies, and asset management companies i.e. mutual funds in 2016.

And with these funds and without the necessary restrictions, NBFCs become reckless in deploying the funds.

You can see this clear as day in the chart below...

One Chart that Predicted the NBFC and Mutual Fund Crisis Back in 2016

One Chart that Predicted the NBFC and Mutual Fund Crisis Back in 2016

Here's what Tanushree Banerjee wrote about this in today's edition of The 5 Minute WrapUp...

  • Let's look back at 2016...

    Banks, mutual funds, and insurance companies were competing with each other to lend to NBFCs.

    And why not?

    Not only were the fast growing NBFCs hungry for funds, they also offered attractive yields.

    The NBFCs took more risk than banks by lending without collaterals. But they charged higher interest rates; which meant their margins remained far higher than that of banks.

    It's no wonder the NBFCs caught everyone's fancy. In fact, between 2013 and 2016, the top NBFCs saw their valuation multiples move up three to eight times.

As per Tanushree, the problem in the NBFC sector is far from over. But she believes the good quality NBFCs, and housing finance companies will continue to flourish and you can make the most of the opportunity by buying the safest NBFCs.

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

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Stock Market Updates

SADBHAV ENGINEERING Plunges by 5%; BSE CAPITAL GOODS Index Down 1.2% (Today's Market)

Aug 22, 2019 03:34 PM

SADBHAV ENGINEERING share price has plunged by 5% and its current market price is Rs 123. The BSE CAPITAL GOODS is down by 1.2%. The top gainers in the BSE CAPITAL GOODS Index are BHARAT ELECTRONICS (up 1.8%) and HAVELLS IND (up 1.0%). The top losers are SADBHAV ENGINEERING (down 5.2%) and HEG (down 6.5%).

SUNTECK REALTY Plunges by 5%; BSE REALTY Index Down 6.2% (Today's Market)

Aug 22, 2019 03:34 PM

SUNTECK REALTY share price has plunged by 5% and its current market price is Rs 448. The BSE REALTY is down by 6.2%. The top gainers in the BSE REALTY Index are OMAXE LTD (up 3.0%) and PRESTIGE ESTATES (up 0.4%). The top losers are SUNTECK REALTY (down 5.0%) and OBEROI REALTY (down 5.5%).

SUNTECK REALTY Plunges by 5%; BSE REALTY Index Down 6.2% (Today's Market)

Aug 22, 2019 03:32 PM

SUNTECK REALTY share price has plunged by 5% and its current market price is Rs 448. The BSE REALTY is down by 6.2%. The top gainers in the BSE REALTY Index are OMAXE LTD (up 3.0%) and PRESTIGE ESTATES (up 0.4%). The top losers are SUNTECK REALTY (down 5.0%) and OBEROI REALTY (down 5.5%).

SADBHAV ENGINEERING Plunges by 5%; BSE CAPITAL GOODS Index Down 1.2% (Today's Market)

Aug 22, 2019 03:32 PM

SADBHAV ENGINEERING share price has plunged by 5% and its current market price is Rs 123. The BSE CAPITAL GOODS is down by 1.2%. The top gainers in the BSE CAPITAL GOODS Index are BHARAT ELECTRONICS (up 1.8%) and HAVELLS IND (up 1.0%). The top losers are SADBHAV ENGINEERING (down 5.2%) and HEG (down 6.5%).

BAJAJ FINSERV Plunges by 5%; BSE 500 Index Down 1.7% (Today's Market)

Aug 22, 2019 03:32 PM

BAJAJ FINSERV share price has plunged by 5% and its current market price is Rs 7,185. The BSE 500 is down by 1.7%. The top gainers in the BSE 500 Index are PERSISTENT SYSTEMS (up 3.7%) and PI INDUSTRIES (up 3.1%). The top losers are BAJAJ FINSERV (down 5.3%) and GODFREY PHILLIPS (down 6.2%).

Sensex Continues Trading Lower; BSE Realty Tanks Over 5% (Today's Market)

Aug 22, 2019 12:30 pm

The BSE Sensex is trading down by 271 points, while the NSE Nifty is trading down by 82 points.

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