Sensex Opens Over 140 Points Down; Capital Goods and Metal Stocks Drag

Fri, 29 Nov 09:30 am

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Asian share markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.4% while the Hang Seng is down 1.8%. The Nikkei 225 is trading down by 0.1%.

Back home, India share markets opened on a negative note. The BSE Sensex is trading down by 148 points while the NSE Nifty is trading down by 30 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.4%.

Sectoral indices have opened the day on a mixed note with realty and healthcare stocks witnessing buying interest. Capital goods and metal stocks are trading in red.

The rupee is currently trading at 71.61 against the US$.

Pharma stocks opened on a mixed note with Piramal Enterprises and Indoco Remedies leading the gainers. As per an article in a leading financial daily, Aurobindo Pharma's subsidiary Auro Vaccines LLC has entered into a pact to acquire certain business assets from Profectus BioSciences Inc USA for an upfront cash consideration of US$ 11.3 million (around Rs 800 million) with potential earn-outs on achieving certain milestones.

Auro Vaccines LLC is a wholly owned subsidiary of Aurobindo Pharma USA Inc, USA, which is a wholly owned arm of the company.

The indicative time period for completion of acquisition of research and development assets of Profectus BioSciences Inc is first half of 2020.

The acquisition provides access to proprietary and innovative technology platforms for prophylactic use and therapeutic use along with global R&D center, the reports stated.

The acquisition will lead to enhancement of research and development capabilities and expertise in developing newer vaccines from basic discovery research into FDA-approved product.

Aurobindo Pharma share price opened the day up by 2%.

Moving on to the news from the commodities space. Gold prices in India moved higher yesterday, tracking an increase in global rates.

On MCX, prices of December gold futures moved 0.4% higher to Rs 37,677 per 10 grams, snapping a seven-day losing streak. Silver prices also moved higher on MCX, rising 0.4% to Rs 44,225 per kg.

In global markets, gold prices inched up today as investors sought the safety of gold on doubts about whether the US and China will be able to reach a trade deal soon after President Donald Trump signed a legislation supporting Hong Kong protesters, a move which was condemned by Beijing.

Domestic gold prices have been under additional pressure due to strength in the Indian rupee against the US dollar.

Gold prices have remained choppy in recent days amid some upbeat economic data from the US. Optimism that US and China could clinch a trade deal soon had also sparked a rally in assets like equities.

Gold is considered a safe store of value during economic or political uncertainties. In global markets, prices are up more than 13% this year, on worries over global growth due to the US-China trade spat.

Speaking of gold, how lucrative gold has been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

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

• In fact, gold has delivered double-digit gains in 10 of the last 15 years.
  
  During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).
  
  During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.
  
  One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment.
  
  If you grab a pie of the big money-making opportunities beyond stocks, I would strongly insist you attend Vijay's Weekly Cash Summit here (It's free).

Meanwhile, Vijay Bhambwani talks about how gold has been relied upon by humankind for 3000 years in one of his videos.

If you consider street inflation, your fixed deposits are giving negative yields. In times like these, Vijay considers gold as a safe haven.

So, is it the time to buy gold?

Tune in to find out...

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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