Indian Stock Markets Trade Higher; Yes Bank and Tata Motors Top Gainers

Wed, 27 Nov 12:30 pm

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Stock markets in India are presently trading higher. The BSE Sensex is trading up by 126 points and the NSE Nifty is trading up by 45 points. The BSE Mid Cap index is trading up by 0.3%, while the BSE Small Cap index is trading up by 0.1%.

Among the sectoral indices, capital goods stocks and realty stocks are witnessing selling pressure. Automobiles stocks and IT stocks are trading in green.

Speaking of the Sensex touching record high, how expensive is the Sensex at current levels? What has the trend been in recent years?

It would be interesting to see how the valuation of the index has moved over the last five years.

The chart below maps the price to earnings ratio of the Sensex from October 2014 to now.

How Pricey Is the Sensex Now?

Here's what Ankit Shah wrote about this in a recent edition of The 5 Minute WrapUp...

• It is worth noting that the Sensex has gained 44% over the last five years, compounding at an annual rate of 7.6% (excluding dividends).
  
  Not quite impressive.
  
  During the same period, the Sensex price to earnings ratio has mostly been in a rising trend, except some intermittent declines.
  
  Between October 2014 and now, the gain in the Sensex price to earnings ratio is 42%. That means that the gains in the index have mostly come from expansion in the valuation multiple, and just meagerly from increases in earnings.

So, before taking the current market bullishness for granted, do weigh in the fact that the Sensex is quite expensively priced.

Meanwhile, as the Sensex crosses 41,000 levels and Nifty touches a new record high, Tanushree Banerjee talks about the trends and stocks that have huge profit potential.

One of the trends she talks about is the privatisation of PSUs.

She talks about the huge potential of this sector and the stocks that could be the big winners!

Tune in...

In the news from the NBFC sector. As per Moody's Investors Service's latest report, the inclusion of Non-banking financial companies (NBFCs) into the Insolvency and Bankruptcy Code (IBC) is credit positive for banks because IBC provides for the orderly resolution of a stressed NBFC company.

According to the report, the close involvement of the Reserve Bank of India (RBI) in the resolution process indicates the importance of the NBFC sector to overall financial stability, including the direct effect of any systemically important NBFC's failure on banks and other credit providers.

It said, "we expect the RBI to selectively approach the IBC to resolve NBFCs with severe liquidity or solvency issues, or to resolve companies whose weak corporate governance is deterring potential buyers."

It also expects banks and the RBI to utilize other debt restructuring options before approaching the IBC.

Recently, the government had empowered RBI to refer stressed NBFCs and housing finance companies (HFCs) having assets worth of at least Rs 5 billion to insolvency courts after notifying Section 227 of the IBC.

Prior to this, the only resolution framework available for stressed NBFCs was liquidation.

Section 227 of IBC empowers the government to notify, in consultation with financial sector regulators, insolvency and liquidation proceedings.

The section specifies that RBI can initiate the bankruptcy process for an NBFC or a housing finance company.

Now, how this pans out going forward remains to be see.

Moving on to the news from the currencies space. The rupee today opened 6 paise higher at 71.44 against the US dollar on account of selling in the American currency by banks and exporters amid persistent foreign fund inflows.

The local currency on Tuesday settled 24 paise higher at 71.50 against the greenback.

On the domestic front, market participants are expected to remain cautious ahead of the important GDP and fiscal numbers that will be released later this week.

Today in US, market participants will be keeping an eye on preliminary GDP and core PCE index number to gauge a view for the greenback. Better-than-expected number could extend gains for the dollar in today's session.

Yesterday, the Indian rupee appreciated by 24 paise to close at 71.50 against the US dollar, buoyed by persistent foreign fund inflows and hopes about US-China trade logjam breakthrough.

At the interbank foreign exchange market, the rupee opened stronger at 71.67 a dollar. During the session, the rupee traded in the range of 71.49 and 71.68, before settling at 71.50 - showing a gain of 24 paise over its previous close.

Speaking of currencies, Vijay Bhambwani, editor of Weekly Cash Alerts, tells you the main reasons why not to trade commodities and currencies the same way you would trade equities. Here's an excerpt of what he wrote...

• Currencies are traded in pairs and the most liquid is the USDINR. Currencies are traded in four decimal points just as bonds are. The international derivative trader's association has indicated that forex may be traded in 6 decimals in the coming few years.
  
  It takes months sometimes for the currency pair to pass the next round figure, say from 70 to 71.
  
  Can you really trade commodities and currencies alike or for that matter, equities and currencies alike? Definitely not!

To know more, you can read Vijay's entire article here: Is Trading in Equities, Commodities, and Currencies the Same?

And 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

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INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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Indian Share Market Update: Top Gainers and Losers