Sensex Opens Lower; Metal and Realty Stocks Under Pressure

Wed, 9 Sep 09:30 am

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Asian stock markets are lower today after Wall Street sank for the third consecutive session led by declines in heavyweight technology companies, and oil prices hit lows not seen since June.

The Hang Seng is down 1.1% and the Shanghai Composite is trading lower by 1.2%.

Overnight, the Nasdaq plunged over 4% as investors sold off shares of Tesla and other tech heavyweights, while simmering US-China tensions and concerns over a rocky economic rebound also weighed on sentiment.

Back home, Indian share markets have opened the day on a negative note.

The BSE Sensex is trading down by 259 points. Meanwhile, the NSE Nifty is trading lower by 81 points.

The BSE Mid Cap index has opened down by 1%. The BSE Small Cap index is trading down by 1.2%.

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

The rupee is currently trading at 73.80 against the US$.

Gold prices are currently trading down by 0.4% at Rs 51,134 per 10 grams.

To know more about gold, just visit our Youtube Playlist on gold investing.

Speaking of stock markets, in his latest video, Rahul Shah talks about how the current rally in stock markets is out of sync with reality and his preferred strategy to deal with it.

Tune in to find out more:

Moving on to stock specific news...

IRCTC is among the top buzzing stocks today.

The government is planning to sell about 15-20% stake in Indian Railway Catering and Tourism Corp (IRCTC) via offer for sale (OFS) and would like to complete the transaction in minimum number of tranches.

Last month, the Department of Investment and Public Asset Management (DIPAM) had invited bids from merchant bankers by September 10 for managing the sale in IRCTC.

The government currently holds 87.40% stake in IRCTC. To meet market regulator's public holding norm, it has to lower its stake in the company to 75%.

Reports state that this OFS would help the government inch forward towards meeting the Rs 2.10 lakh crore disinvestment target for ongoing fiscal.

The government is also looking at launching initial public offering (IPO) of Indian Railway Finance Corp (IRFC).

The Union Cabinet had in April 2017 approved listing of five railway companies. Four of them - Ircon International, Rites, Rail Vikas Nigam and IRCTC have already been listed.

IRCTC share price opened the day down by 2.8%.

Moving on to news from the power sector, NTPC is planning to add at least 5 gigawatt (GW) solar capacity over the next two years, said Gurdeep Singh, chairman and managing director of India's largest power generation utility on Tuesday.

This assumes significance given that with 63 GW installed capacity, NTPC runs the largest fleet of coal-based capacity in India, and has been working on a green energy push.

In other news, according to a report by rating agency Care Rating, India's power demand is likely to remain subdued amid a daunting economic outlook for the coming quarters. The electricity demand and the consequent generation would contract for the financial year as a whole, the report added.

Domestic electricity generation during the 5 months of April to August 2020 has been at a 4-year low and 11% lower than the generation in the corresponding months of last year.

Electricity generation in the month of August 2020 was 2.5% lower than July, which shows that economic and business activity continues to be limited despite the lifting of the lockdown in various regions.

Being the largest source of electricity, thermal power witnessed the maximum fall of 8% in the month, however, it was partly offset by higher output from renewable sources.

The lockdown has also contributed to shooting up the outstanding dues of distribution companies (discoms). The financial health of discoms was fragile even before the pandemic but as the pandemic hit India's coast, the dues started to swell further.

Payables by discoms had significantly increased from Rs 900 billion as of March 2020 to more than Rs 1.30 lakh crores as of June 2020.

However, in an effort to provide some relief to the discoms, the centre had announced a liquidity infusion package of Rs 900 billion in May 2020.

We will keep you updated on the latest developments from this space. Stay tuned.

Speaking of the power sector, it is interesting to note that the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below:

This is abysmally low by global standards. This shows that there is big upside in the market share of power exchanges in India.

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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