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Indian Indices Trade Volatile, Energy Stocks Show Uptick
Tue, 9 Oct Pre-Open

On Friday, share markets in India opened on a negative note and ended the day in green after a volatile day of trading.

The BSE Sensex closed higher by 97 points to end the day at 34,474. While the broader NSE Nifty ended the day up by 283 points to end at 10,348.

Among BSE sectoral indices, energy stocks rose the most by 3.3%, followed by bank stocks at 1.2%. Yes Bank and Reliance Industries. were among the top gainers.

Top Stocks in Action Today

L&T share price is likely to be in focus today after the company's subsidiary bagged major orders.

The power and transmission business of the subsidiary L&T Construction won orders worth Rs 18.8 billion in both domestic and international markets.

Yes Bank share price will be in focus today after the bank announced that it appointed a search committee to find the current CEO Rana Kapoor's successor.

Company has appointed two former chairmen -- TS Vijayan of LIC and OP Bhatt of SBI to its search and selection committee to find the CEO's successor.

Fuel Price Reduction to Hurt OMCs: Moody's

According to global credit ratings agency Moody's, the government's decision last week to reduce fuel prices through a mix of state and centre tax cuts and price cuts taken by oil marketing companies (OMCs) may have far-flung impact on the domestic oil industry.

The immediate impact, according to the rating agency's note would be a credit negative for the OMCs.

Moody's raised concerns over increased borrowings for OMCs, rating downgrades, further directives to absorb fuel prices and pressure on upstream companies to increase in shareholder returns or subsidise crude oil prices.

On October 4, the government reduced petrol and diesel retail selling prices by Rs 2.50 per litre, through cuts in excise duties by Rs 1.50 per litre and asking OMCs to absorb the remaining Re 1 per litre price cut.

Moody's estimated the government's decision will reduce the combined Earnings before interest, taxation, depreciation and ammortisation (EBITDA) of the three OMCs by Rs 65 billion in fiscal 2019, ending March 2019, which is around 9% of their total EBITDA of Rs 692 billion in fiscal 2018.

The agency added that despite the negative earnings effect of the government's decision, we continue to expect the three OMC to report higher EBITDA in fiscal 2019 versus fiscal 2018, given higher sales volume, stable refining margins and the depreciating rupee. However, borrowing for these OMCs is likely to increase.

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