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Markets will remain closed on 19th & 20th October 2017.
We wish all our readers a very Happy Diwali!

Sensex Slips Again in Today's Trade; Realty & Pharma Stocks Plunge
Mon, 25 Sep Closing | Karan Janani, TM Team

Indian share markets continued to languish in red in the afternoon session on sustained foreign fund outflows and weak global markets. The sentiment also remained negative as concerns persisted over US- North Korea's war of words.

At the closing bell, the BSE Sensex closed lower by 296 points and the NSE Nifty finished down by 92 points. The S&P BSE Mid Cap finished down by 1.1% while S&P BSE Small Cap finished down by 2%. Losses were largely seen in realty stocks, pharma stocks and capital goods stocks.

Asian stock markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.50%, while the Hang Seng & the Shanghai Composite fell 1.36% and 0.33% respectively. European markets are mixed to lower as market participants digested election results out of Germany, where the nationalist Alternative for Germany won parliamentary seats for the first time. Shares in London are off as the FTSE 100 drops 0.29%. The CAC 40 is down 0.20% while the DAX in Germany is unchanged.

The rupee was trading at Rs 64.83 against the US$ in the afternoon session. Oil prices were trading at US$ 50.61 at the time of writing.

Software stocks finished the trading day on a weak note with NIIT Ltd share price and HCL Infosystems share price leading the loses.

As per a leading financial daily, the National Association of Software and Services Companies (Nasscom) is expecting the industry to deliver a strong performance in the next fiscal, on the back of revival of financial sector investments in tech spends along with demand uptick in the US.

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Outlining the industry's annual guidance in June this year, Nasscom had said the Indian IT export would grow by 7-8% this fiscal, the same as the previous year, while the domestic infotech industry would expand at 10-11% during the period.

Nasscom President R Chandrasekhar, praising the re-strategising done by the Indian companies, said that this would also contribute the growth of IT sector. He also highlighted the company's focus on re-skilling employees on new digital technologies to drive growth. However, Nasscom President expressed concerns over the issues like stricter work visa regulations in key markets like the US and the UK and an uncertain business environment.

IT giants like TCS, Infosys were considered a safe bet at any price. The top 4 IT companies have underperformed the benchmark. With the sector heavily dependent on US customers, Trump's protectionist policy announcements have further dampened the mood in this sector.

Underperformance of Top IT Stocks

Also, with automation on the horizon, Indian IT companies' low-cost labor outsourcing is turning into a thing of the past. IT companies need to re-invent itself. Automation is needed in their traditional businesses like BPO, application management, and infrastructure management.

Moving on to news from oil & gas sector. As per an article in The Livemint, Oil and Natural Gas Corp. Ltd (ONGC) will acquire the government's 51.11% stake in Hindustan Petroleum Corp. Ltd (HPCL) through a bulk or block deal some time in November or December at the prevailing market price.

While the government is keen that the deal, which would fetch it over Rs 330 billion at the current market price, is done in October, as per the reports ONGC wants time to raise the money required for the acquisition.

ONGC will have to borrow about Rs 250 billion to fund just the purchase of the government stake. Half of the company's Rs 150 billion of cash has already gone into buying Gujarat State Petroleum Corp's stake in a KG basin gas block. Also, after accounting for capital expenditure requirement for the current year, ONGC will be left with Rs 40-50 billion.

ONGC share price finished the day on a flat note.

In another development, oil marketing companies are quietly drawing up plans to expand their modest presence in renewable energy space as the companies wary of being left behind in the race for renewables and electric vehicles.

The government is pushing solar and wind energy as well as electric vehicles, to curb oil imports and pollution, and meet its commitments under the Paris accord on climate change. Reportedly, India also pledged that by 2030, 40% of the country's electricity would come from non-fossil fuel.

As per an article in The Livemint, companies like Indian Oil Corporation is already exploring opportunities for setting up battery charging stations and battery replacement facilities for electric vehicles in its petrol pumps. Meanwhile, Bharat Petroleum Corp. Ltd (BPCL) sees 5% of its revenue coming from non-fossil fuel sources by 2021-22.

In news from retail sector, Shoppers Stop share price surged 20% in today's trade. This comes as the company recently announced that its board approved a proposal to sell 5% equity stake in the company for Rs 1.8 billion to Amazon NV Holdings LLC, the investment arm of the world's largest online retailer Amazon Inc.

As per the news, Amazon.com NV Investment Holdings, a foreign portfolio investor, will subscribe to about 43.95 lakh shares in Shoppers Stop at Rs 407.78 each on a preferential basis. The above partnership will help Shoppers Stop tap non-metro markets and aid its performance.

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Oct 18, 2017 (Close)

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