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Indian Indices Finish the Day at Lifetime Highs
Thu, 13 Jul Closing

After opening the day on a positive note, Indian share markets continued their uptrend and ended their day on a positive note. Gains were largely seen in the capital goods sector, banking sector and FMCG sector leading the gains.

At the closing bell, the BSE Sensex stood higher by 233 points (up 0.7%) and the NSE Nifty closed higher by 76 points (up 0.8%). The BSE Mid Cap index ended the day up by 0.5%, while the BSE Small Cap index ended the day up by 0.4%.

Asian stock markets finished mixed as of the most recent closing prices. The Hang Seng gained 1.1% and the Nikkei stood flat. European markets are trading positively today with shares in London leading the region. The FTSE 100 is up 0.11% while Germany's DAX is up 0.20% and France's CAC 40 is up 0.63%. The rupee was trading at 64.43 to the US$ at the time of writing.

Acknowledging the large size of unorganised sector, Union Finance Minister Arun Jaitley has exhorted financial institutions, including Nabard, and banks to step up focus on improving credit flow to unorganised sector and has said that it will help to push employment growth. He also said that it is a fact that people in the unorganised sector are much higher than the organised sector, but the former gets credit with lot of difficulty.

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Jaitley pointed out that if the resources of banks and financial institutions through various schemes are diverted towards unorganised sector, it will help create more employment. Regarding the benefits of self-help groups (SHGs), he said they have come a long way and generated lakhs of jobs in rural areas. He further said that since most SHGs are women-led, these have brought in financial security for rural women. He also said it has been observed that SHGs the repayment capacity is much higher with regard to all microfinance schemes.

The Finance Minister said he was hopeful that the Nabard-led initiative of SHG-Bank Linkage Program would further expand in the coming days. Over a span of 25 years, the SHG-Bank linkage program has grown into a massive movement with 8.5 million SHGs across the country now part of this program. The total loan exposure of the banking system to SHGs is about Rs 610 billion. Meanwhile, the credit growth has plunged to a six-decade low of 5.08% in 2016-17 against 10.7% a year ago.

Credit penetration in India Remains the Lowest

Low capacity utilisation in most sectors adversely impacted the earnings of India Inc. As a result, a bulk of the bank loans extended to the corporate segment turned bad and ate into their profits. As on 30 September 2016, the stressed loans of state-run banks had surged to 15.8% of the outstanding loans. Even bank credit growth has fallen to multi-decades low.

No wonder most PSU stocks are trading at a discount to their book values.

In other news, shares of newly listed companies witnessed buying interest and surged as much as 10% today.

The companies include Central Depository Services Ltd (CDSL), Hudco, and AU Small Finance Bank, which were some of the IPOs that entered the Indian share markets lately.

The above development aptly depicts that primary markets have caught the frenzy of investors. However, are IPO's a sure shot way to make money in the stock markets?

According to Hindu Business Line, till June 2016, only 40% of the IPOs launched between 2004 and 2011 were trading above their issue price.

So the best way to invest in IPOs is by evaluating each IPO on its merits by considering its fundamentals, and most importantly, the valuations. And this is particularly important when the hype surrounding IPOs is at its peak.

If you're new to the 'lovely' world of IPOs, we have something for you...

Our new and completely free report - How to Get Rich with IPOs - will tell you how to find those money spinning IPOs and avoid the disasters in the coming year and beyond.

And here's a note from Profit Hunter:

In an earlier note, we mentioned BPCL was trading at a crucial uptrend support line and a break below it would lead to lower levels in the stock. The stock did break below the uptrend support line and fell 10% from there to a low of Rs 599.

It then recovered strongly but is now trading near its support line (now a resistance line). A few days back, the company announced a 1:2 bonus and today the stock went ex-bonus. We have shown you before that stocks usually tend to underperform after a bonus issue.

So with the stock going ex-bonus and trading near its resistance line, will the down move continue? Let's wait and watch...

BPCL at Crucial Level
BPCL at Crucial Level 

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Feb 20, 2018 02:35 PM