Indian Indices End Flat; IT and Energy Stocks Witness Buying

Tue, 13 Oct Closing | Yash Vora, TM Team

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Indian share markets witnessed volatile trading activity throughout the day today and ended on a flat note.

At the closing bell, the BSE Sensex stood higher by 32 points. The NSE Nifty ended up by 4 points.

Infosys and HCL Tech were among the top gainers today. Titan, on the other hand, was among the top losers today.

SGX Nifty was trading at 11,946, up by 8 points, at the time of writing.

The BSE Mid Cap index ended down by 0.3%.

The BSE Small Cap index ended down by 0.1%.

Sectoral indices ended on a mixed note with stocks in the IT sector and energy sector witnessing buying interest.

Healthcare stocks, on the other hand, witnessed selling pressure.

Asian stock markets ended on a positive note. As of the most recent closing prices, the Shanghai Composite ended up by 0.1% and the Nikkei ended up by 0.2%.

European shares fell today as worries over the coronavirus pandemic overshadowed Chinese trade data that pointed to a buoyant recovery.

US stock futures are trading mixed today. Nasdaq Futures are trading up by 95 points (up 0.8%), while Dow Futures are trading down by 95 points (down 0.3%).

The rupee is trading at 73.36 against the US$.

Gold prices are trading down by 0.2% at Rs 51,017 per 10 grams.

Watch Now: 3 Little-known Stocks We are Super Bullish On

Speaking of the current stock market scenario, have a look at the chart below which shows the performance of BSE Smallcap index and the BSE Sensex since 23 March:

As you can see, the smallcap index is up with 68% gains versus 56% gains in the Sensex.

The markets are back at the highest levels since the pandemic began.

As per Richa Agarwal, lead smallcap analyst at Equitymaster, there could still be a lot of steam left to this smallcap rebound rally.

As per Richa, if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

Loan Moratorium Highlights

In news from the finance sector, the Supreme Court today adjourned its hearing on a batch of petitions seeking interest waiver during the loan moratorium period to October 14.

The three judge bench comprising of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah assembled at 12 noon today and announced that the matter will be taken up at the end of board.

The case is adjourned till tomorrow since Justice Ashok Bhushan is required to sit in a different combination of judges in the post lunch session.

On October 5, the bench heard pleas seeking waiver of accruing interest during the six-month loan.

A loan moratorium exceeding six months might result in vitiating the overall credit discipline, which will have a debilitating impact on the process of credit creation in the economy, the Reserve Bank of India has told the Supreme Court.

Earlier this year in March, the RBI had announced a moratorium on repayment of term deposits for three months, which was later extended till August 31.

Moving on to stock specific news...

Rane Brake was among the top buzzing stocks today.

Rane Brake share price surged 14% today after the company said its board will meet on Thursday to consider share buyback proposal.

"The exchange may please note that the board of directors at its meeting convened on October 15, 2020, is scheduled to inter-alia consider a proposal for buyback of equity shares of the Company and matters connected thereto," the company said in an exchange filing.

As of September 30, 2020, the promoters held 67% stake in the auto-ancillary company.

Speaking of buybacks, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible use it to your advantage to rake in some cash.

As per Rahul Shah, co-head of Research, investors should not assume buybacks are always good. Here's an excerpt of what he wrote in one of the editions of The 5 Minute Wrapup:

• The reason behind the buyback must be investigated. At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.

Moving on to news from the cement sector, shares of cement companies witnessed buying interest today on hopes of demand recovery.

Shares of UltraTech Cement, Ramco Cement, JK Cement, Ambuja Cement, India Cements, Orient Cement, Heidelberg Cement, ACC and Shree Cement ended up in the range of 1-3%.

As per a leading financial daily, the cement industry demand is slowly improving from the disruption created from Covid-19 due to pent up demand and improved rural demand.

In the past month, shares of JK Cement, ACC, Ambuja Cements and UltraTech Cement have rallied as much as 19%.

JK Cement share price hit a fresh record high of Rs 1,725 today. Last week, the company successfully commissioned 0.7 million tonne per annum grey cement grinding capacity and also commenced commercial dispatches from 8th October 2020.

How cement stocks perform in the coming months remains to be seen. Stay tuned for more updates from this space.

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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