X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Sensex Opens Firm; FMCG & Healthcare Stocks Gain the Most
Tue, 27 Jun 09:30 am

Asian equity markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 0.30%, while the Hang Seng is up 0.10%. The Shanghai Composite is trading lower by 0.07%. The US stocks finished mixed on Monday, with the S&P 500 and the Dow closing in the positive territory.

Meanwhile, share markets in India have opened the day on a firm note. The BSE Sensex is trading higher by 151 points while the NSE Nifty is trading higher by 30 points. The BSE Mid Cap Index and BSE Small Cap index opened the day up by 0.2% & 0.4% respectively.

Barring PSU stocks, all sectoral indices have opened the day in the green with FMCG stocks and healthcare stocks leading the pack gainers. The rupee is trading at 64.54 to the US$.

Sun Pharma share price opened the day on an optimistic note after it was reported that the pharma major and the National Institute of Virology (NIV) signed an agreement for testing phytopharmaceutical, biologic and chemical entities developed by Sun Pharma against Zika, Chikungunya and Dengue viruses.

Oil & gas stocks opened the day on a mixed note with Chennai Petroleum & Suzlon Energy leading the gains. As per an article in a leading financial daily, Hindustan Petroleum Corporation (HPCL) has joined the Indian consortium negotiating the acquisition of a 49% stake in Russia's Vankor Cluster oilfields in the Arctic region.

In 2015, ONGC Videsh Ltd, an arm of PSU explorer Oil and Natural Gas Corp, bought a 15% stake in Russia's Vankor fields for US$1.26 billion. Then, in 2016, it topped up its stake with another 11% for US$930 million.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Later, the other PSU oil companies, Oil India, Indian Oil Corporation and Bharat PetroResources (part of BPCL) - joined ONGC to increase India's participation in the Siberian oil and gas fields by agreeing to pick 23.9% stake in Vankorneft (a subsidiary of Russian state-owned oil company Rosneft that owns the Vankor cluster).

This raised India's total holding in the Vankor fields to 49.9%.

Reportedly, the investments have taken the total outlay in Russia this year to US$5.46 billion. These investments will give India 15.18 mt of oil equivalent. These compare to US$28.48 billion investment by Indian companies overseas in the past 50 years, leading to about 10 million tonnes of oil equivalent.

While HPCL will now be the last of the big oil PSUs looking at investments in Russia, the price of new investments is likely to be higher than in the past with benchmark crude oil prices on the rise again, the reports noted.

HPCL share price opened down by 0.3%.

Moving on the news from the economy. The Bharatiya Janata Party (BJP)-led Maharashtra government announced a major farm loan waiver scheme that will see debt of up to Rs 0.15 million per farmer being written off, costing the exchequer Rs 340 billion.

The government has also announced a special package for regular loan payers, by giving them a bonus of Rs 25,000 or 25% of the loan paid, whichever is higher.

As per CM Devendrs Fadnavis, the waiver will add to the state's financial burden, and this could affect development projects. But as per him the government will tie-up with banks for a staggered loan.

Other than Maharashtra, different state governments have also announced large and small loan waivers for farmers. The Yogi Adityanath government in April had announced a Rs 360 billion farm loan waiver in Uttar Pradesh.

Notably, RBI Governor Urjit Patel had expressed his displeasure at the spate of loan waiver announcements in different states. It would impact credit discipline and incentives for future borrowers to repay. In other words, waivers would engender a moral hazard.

However, Vivek Kaul pointed out that if there is a moral hazard for the farmer, there is also one for corporates. And if the RBI governor has pointed out one, he should have pointed out the other as well. Here's a snippet of what he wrote in his Diary titled: Dear Mr Urjit Patel, Have You Ever Heard of Wasim Barelvi?

  • "corporate loan write-offs have led to the situation of diminishing bank capital. This has led to the central government having to recapitalise the PSBs over the years. This money is ultimately borrowed by the government and leads to crowding out, higher interest rates and a weaker national balance sheet. All these issues pointed out by Patel in case of farm loan waive-offs apply to corporate write-offs as well."

Moreover, this short-term bailout fails to address structural issues faced by farmers such as lack of adequate irrigation and better prices for farm produce. At the same time, it spoils the credit discipline translating into higher slippages for public sector banks already burdened with bad loans of over Rs 7 trillion.

Inefficacy of Farm Loan Waivers

Farm loan waivers continue to remain the most popular measure to win the rural vote bank. This is a sad irony as it does not resolve the actual problems faced by small and marginal farmers. And at the same time adversely impact the asset quality of banks.

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

Equitymaster requests your view! Post a comment on "Sensex Opens Firm; FMCG & Healthcare Stocks Gain the Most". Click here!

  

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Aug 17, 2017 11:38 AM

MARKET STATS