Sensex Ends 70 Points Higher; Telecom and Banking Stocks Advance

Fri, 15 Nov Closing | Monish Vora, TM Team

   Previous Close   

   Pre-Open   

   09:30 am   

   12:30 pm   

Indian share markets traded on a positive note throughout the day and ended marginally higher. The BSE Sensex rose over 350 points intraday, while the NSE Nifty climbed above 11,950.

Investor sentiments increased amid hopes that the US and China were close to signing a trade deal. White House economic adviser Larry Kudlow said on Thursday that Washington was getting close to a trade agreement with China.

Sectoral indices ended on a mixed note with stocks in the telecom sector and banking sector witnessing buying interest, while FMCG stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 70 points (up 0.2%) and the NSE Nifty closed higher by 23 points (up 0.2%). The BSE MidCap index ended the day up by 0.6%, while the BSE SmallCap index ended down by 0.1%.

Asian stock markets finished on a mixed note as of the most recent closing prices. The Hang Seng was up 0.1% and the Nikkei was up 0.7%. The Shanghai Composite stood lower by 0.6%.

The rupee was trading at 71.77 to the US$ at the time of writing.

Amid the volatility witnessed in Indian stock markets lately, Tanushree Banerjee, in the video below, talks about the Rebirth of India phenomenon and how 3 specific trends are racing ahead even in these gloomy times.

Tune in to find out more...

In news from the realty sector, real estate firm Prestige Estates has bought 14 acres of land in Hyderabad's Kokapet area for Rs 2 billion that will be built as a mixed-use development project.

The Bengaluru-based developer will build around 1.6 million sq ft of mid-income homes as part of the residential project and another 1.8 million sq ft of commercial office space.

Note that, last month, Prestige and real estate firm DB Realty entered into a joint venture to develop a mixed-use project spread across 7.7 acres in Delhi's Aerocity.

The company also reported 21% increase in its consolidated net profit at Rs 1,071 million for the September quarter on the back of higher sales.

Its net profit stood at Rs 881 million in the year-ago period.

Total income rose to Rs 19,627 million during Q2FY20 from Rs 13,387 million in the corresponding period of the previous year.

The consolidated turnover of the company during 2018-19 stood at Rs 52.8 billion with operating income of Rs 15.7 billion.

Prestige Estates share price ended the day down by 4.7%.

It is interesting to note that real estate is one sector that has tested investor patience over the years. While the sector has seen big moves in the last few years, the downward movement has been equally sharp.

The post demonetisation era has been tough on the sector. Excess inventory, i.e. housing projects stuck for years, has meant homeowners have largely stayed away from any fresh buying in the real estate space.

Also, post the IL&FS crisis, lending to real estate developers has largely dried up. The BSE Realty Index also reflects the same. It was down 31% in 2018.

But is the scenario about to change?

Is the Real Estate Sector Set for a Turnaround?

Here's what Tanushree Banerjee wrote about it in a recent edition of The 5 Minute WrapUp...

• The government recently announced a Rs 250 billion package to bailout stalled housing projects. It's a much-needed relief for home owners.
  
  The BSE Realty Index has seen a sharp bounce post this announcement. It is up 21%for the year.
  
  What I'm more interested in is the pickup in consumption once the real estate sector revives.
  
  Once people get their homes, they are likely to spend on tiles, paints, furniture, electronics, pipes, cables, cement, and many other things.

So, look out for strong well-established stocks that will benefit the most from this trend.

Moving on to news from the telecom sector, shares of telecom major Vodafone Idea plunged 11.5% to hit an all-time low of Rs 2.61 apiece in early trade today, after the company reported a net loss of Rs 509.2 billion for the September quarter.

Note that this is the biggest ever loss in corporate India's history. The company reported losses due to outstanding payment related to adjusted gross revenues.

However, shares of the company bounced back over 25% on reports that the government was mulling sops to revive the telecom sector.

Vodafone Idea's MD reached out to employees, in a bid to calm nerves after a Supreme Court order on AGR left the telco facing questions about its future.

As per an article in The Economic Times, Ravinder Takkar on Thursday detailed out the Supreme Court verdict which backed the government's view to include non-core items while computing AGR, leaving the telco facing additional statutory dues of over Rs 390 billion, in license fees, spectrum usage charges (SUC), penalties and interest.

The company reported a massive pre-tax loss of Rs 369.6 billion for the July-September quarter, against a loss of Rs 49.7 billion in the year-ago quarter.

It provisioned for Rs 276.1 billion on account of licence fees and Rs 165.4 billion, including interest and penalties on interest, related to spectrum usage charges (SUC).

Reports state that the company could be pushed towards bankruptcy in the absence of any relief measure from the government.

Vodafone Idea share price ended the day up by 26%.

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!

Read the latest Market Commentary

Indian Share Market Update: Top Gainers and Losers

What else is happening in the markets today? Dig in...