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Sensex Trades Marginally Lower; Metal & IT Stocks Drag
Tue, 20 Nov 12:30 pm

Share markets in India are presently trading on a negative note. Sectoral indices are trading mixed with stocks in the auto sector and oil & gas sector witnessing maximum buying interest while metal stocks and IT stocks are witnessing selling pressure.

The BSE Sensex is trading down by 101 points (down 0.3%), while the NSE Nifty is trading down by 42 points (down 0.4%). The BSE Mid Cap index is trading down 0.3%, while the BSE Small Cap index is trading down by 0.2%.

The rupee is trading at Rs 71.37 against the US$.

The rupee opened 20 paise higher at 71.47 against the US currency, extending its gaining streak for the sixth straight session keeping afloat robust forex inflows and softening crude oil prices.

Rupee also got some support after the outcome from the RBI's board meeting on Monday removed uncertainty over a growing rift over policy decisions between the government and the central bank.

The rupee has gained over 1.5% since November 13.

Note that, the rupee is the worst performer in Asia in 2018. It has fallen by around 12% against the US dollar this year.

Indian Rupee is the Worst Performing Currency in Asia

This selling pressure is seen on the back of a strong dollar and high oil prices. Similarly, the spill-over from the emerging-market turmoil in Argentina and Turkey is weighing on the rupee.

The falling rupee is also triggering sales of bonds and stocks, which in turn is further pressuring the rupee.

However, in the near term, the rupee being under pressure could benefit export-oriented businesses.

The recent Smart Money Secrets recommendation will benefit from the rupee depreciation.

If you're a Smart Money Secrets subscriber, read the detailed report here.

In the news from the aviation spaceJet Airways share price is witnessing selling pressure today. As per an article in a leading financial daily, the board of Tata Sons has raised concerns over the financial health of the airline.

Reportedly, the Tata Sons board has cautioned the management against rushing into any deal with the cash-strapped airline amid concerns of rising liabilities of the airline.

As Ankit Shah wrote in a recent edition of The 5 Minute WrapUp...

  • On Friday, Tata Sons clarified that discussions with Jet Airways have been preliminary and no proposal has been made. However, if the deal comes through, it may be a lease of life for the airline.

    Well, it must be recalled that the Tatas were the first to enter the aviation sector as early as 1932. It was Tata Airlines that nationalized and turned into the financial mess that we now call Air India.

    Ever since the government started allowing private airlines in the 1990s, the Tatas have harboured ambitions of returning to aviation. They reentered the Indian skies with two joint ventures - Vistara, a joint venture with Singapore Airlines, and another with Air Asia. But these joint ventures account for a small share of the Indian aviation market.

    With Jet Airways, the Tatas could enter the big league and become the second largest aviation group in India after budget carrier Indigo (InterGlobe Aviation Ltd).

    On the face of it, it seems like the Tatas are the ideal contenders to rescue the troubled airline. The Tatas have the resources to bring the airline back from the deathbed. But will it really turn the fortunes of the airline and make it profitable?

    To me, this sounds like a Bollywood love saga wherein the protagonist rescues the damsel in distress, and they pledge to tie the knot and live happily ever after. However, most married men will agree that the real challenges arise post marriage.??

    As we've written time and again, the aviation business is one of the toughest nuts to crack. Despite India witnessing rapid passenger growth, the cost structures and high competitive intensity make it very difficult for most airline companies to turn a decent profit.

    So, while traders and speculators may rush to trade on the news of a potential takeover by the Tatas and a likely consequent turnaround of the troubled airline, this is certainly not an investment idea for serious, long-term investors seeking safe stocks and a good night's sleep.

It would be interesting to see how this pans out. Meanwhile, we will keep you updated on all the developments from this space.

In the latest development from the results corner, Siemens reported 55.2% fall in its net profit at Rs 2.8 billion for the quarter ended September 30, 2018 as compared to Rs 6.2 billion for the same quarter in the previous year.

Siemens share price is trading down by 1%.

You can read Siemens Q2FY19 analysis and Siemens annual report on our website.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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