Sensex Falls 300 Points on Weak Global Cues; Energy & Banking Stocks Under Pressure

Fri, 9 Jul 09:30 am

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Asian share markets fell to two-month lows today and were set for their worst weekly performance since February as confidence took a beating over the global spread of the Delta virus variant.

The Hang Seng is up 0.7% while the Nikkei plunged more than 1.9%. The Shanghai Composite is down 0.7%.

In US stock markets, Wall Street indices lost ground on Thursday with the S&P 500 and the Nasdaq pulling back from record closing highs in a broad sell-off, driven by uncertainties surrounding the pace of the US economic recovery.

The Dow Jones Industrial Average fell 0.8%, while the Nasdaq Composite Index ended down by 0.6%.

Back home, Indian share markets have opened on a negative note, following the trend on SGX Nifty.

The BSE Sensex is trading down by 262 points. Meanwhile, the NSE Nifty is trading lower by 66 points.

Tata Steel is among the top gainers today. Axis Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.2%. The BSE Small Cap index is trading on a flat note.

Sectoral indices are trading on a negative note with stocks in the energy sector and banking sector witnessing most of the selling pressure.

On the other hand, metal stocks are trading in green.

Shares of Sobha and Rites hit their 52-week high today.

The rupee is trading at 74.71 against the US$.

Gold prices are trading up by 0.3% at Rs 47,860 per 10 grams.

Meanwhile, silver prices are trading down by 0.3% at Rs 68,759 per kg.

Speaking of the current stock market scenario, note that the BSE smallcap index has surged 188% since the crash in March 2020.

Despite the index being up more than 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

The 188% gain in the smallcap index in current rebound is way short of almost 300% gains in the last two rebound cycles.

Here's what Richa wrote in a recent edition of Profit Hunter...

• The Smallcap to Sensex ratio, a metric I often refer to get a sense of relative valuations, currently stands at 0.49 times. To be sure, this is higher than a median of 0.43 times.
  
  And yet, it's the lowest of all the peaks in the smallcaps so far. In the last cycle which peaked in January 2018, when the ratio touched 0.49, the peak was still 9 months away.

As per Richa, smallcaps are a great opportunity to make some big returns. But you need to stay disciplined when it comes to allocating money. And you need to be sharp when picking the right stocks.

If you get these two things right, smallcaps will work wonders for you.

In news from the IT sector, Tata Consultancy Services (TCS) is among the top buzzing stocks today.

India's largest IT company TCS on Thursday reported a 28.5% year-on-year (YoY) growth in its consolidated net profit to Rs 90.1 bn for the quarter ended June 2021.

Its consolidated revenues for the quarter surged 18.5% YoY to Rs 454.1 bn.

TCS missed estimates as analysts had expected the firm to report near 5% sequential growth in consolidated revenues and consolidated net profit of Rs 93.7 bn.

In a press conference, the company's MD and CEO Rajesh Gopinathan said,

• Our business in North America, BFSI and retail all showed an appreciable growth which underlines the resilience of our operating model, relevance of our offerings and above all, the passion and dedication of our associates.

TCS' order book showed significant strength as it managed order wins worth US$8.1 bn in the June quarter, a 17.3% growth YoY.

TCS managed to keep a lid on attrition. At a headcount of 509,058, TCS reported attrition of 8.6%.

Although the attrition rate is the lowest among peers, it has gone up from last quarter's 7.2%.

The company's board also approved an interim dividend of Rs 7 per equity share.

TCS share price has opened the day down by 1%.

Speaking of stock markets, India's #1 trader Vijay Bhambwani talks about why metal prices are going up, in his latest video for Fast Profits Daily.

As per Vijay, the metals space is in a bull market but not a supercycle. Want to know why?

Tune in to the below video to find out:

Moving on to news from the IPO space, the initial public offer (IPO) of G R Infraprojects garnered 5.9 times subscription on Thursday, the second day of the issue.

Retail investors showed great response as that portion of the IPO garnered 7.5 times subscription.

The HNI portion is subscribed 6.3 times and the institutional portion getting subscribed 2.8 times.

G R Infra is an integrated road engineering, procurement and construction company.

The company's IPO comprises secondary share sale worth Rs 9.6 bn.

The price band for the IPO is Rs 828 to Rs 837 per share and at the top-end, the company will have a marketcap of Rs 80.9 bn.

How this IPO performs on listing day remains to be seen.

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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