Stock Market's Sudden Crash; Rising Oil Prices; Banking Stocks and Top Cues in Action Today

Mon, 24 Sep Pre-Open | Rini Mehta, TM Team

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The Indian share markets ended lower on Friday. The S&P BSE Sensex partially recovered after crashing 1,000 points in intraday trade to settle 280 points lower. The Nifty 50 index slipped 91 points to end the day at 11,143.

The decline came on the back of a sharp fall in NBFC stocks. DHFL skidded over 50% in intraday trade on fears of a liquidity crisis. The management, however, assauged investor concerns and said the company has not defaulted on any repayments. The stock settled nearly 45% lower at Rs 337.8 on the BSE.

In the broader markets, the S&P BSE SmallCap index fell 3% lower 15,763 levels, while the S&P BSE MidCap index has slipped 1.7% to end at 15,596 mark.

Among other stocks, YES Bank fell 20% after RBI trimmed Rana Kapoor's tenure as its CEO. The private sector lender said on Wednesday that the Reserve Bank of India (RBI) had allowed Kapoor to continue only till January 31.

According to sources, the RBI has cited corporate governance and regulatory issues for not extending Kapoor's term. Further, the lender has been directed to search for a successor.

Market participants will closely watch the movements of NBFCs, housing finance & banking stocks today.

Top Stocks in Focus

Sun Pharma share price will be in focus after it received the Australian Therapeutic Goods Administration (TGA) approval for its specialty product, ILUMYA (tildrakizumab) for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy.

Cipla also received approval from the US health regulator for anti-nausea drug. The stock will be in focus.

Dilip Buildcon will hog limelight after company declared lowest bidder for metro rail project of Rs 2.3 billion.

Shares of liquor company United Spirits will be in focus after the parent company Diageo warned that its full-year profits will be dented by the recent sell-off in emerging market currencies.

To know more, check out our share market updates here.

Global Stock Market Drivers

Stocks in Europe followed gains across Asia as the bullish mood that has characterized most of the week continued to buoy global equity markets. Treasury yields edged higher alongside the dollar, though the greenback was still set for its worst week since March.

Commodities, stocks and emerging-market assets were all rallying, and the dollar was falling, as investors bet the global economic expansion is intact despite the latest data from Europe and the escalating trade war.

Oil Steady as US Crude Inventories Fall

Oil futures inched up on Friday amid concerns over supply as US sanctions on Iran's crude exports loom, although calls by US President Donald Trump for lower oilprices dragged.

International benchmark Brent crude for November delivery was up 26 cents, or 0.33%, at US$78.96 a barrel.

US West Texas Intermediate crude for October delivery was up 7 cents, or 0.1%, at US$70.39 a barrel.

From the IPO Space...

This week, market participants will look forward to two more upcoming IPOs of Garden shipbuilders & Aavas Financiers.

Housing finance company Aavas Financiers is planning to raise around Rs 17.34 billion through an IPO. The IPO will open on September 25 and will close on September 27. Meanwhile, government-owned Garden Reach Shipbuilders & Engineers' Rs 3.4-billion IPO will remain open for subscription between September 24 and September 26. The price band for the issue has been fixed at Rs 115 to Rs 118 per share.

With so many IPOs set to hit the markets, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

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Indian Share Market Update: Top Gainers and Losers

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