Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Of Capital Infusion in PSBs, November WPI Inflation, and Top Cues in Focus Today
Mon, 17 Dec Pre-Open | Monish Vora, TM Team

Indian share markets closed marginally higher on Friday. Gains were largely seen in the telecom sector and oil & gas sector, while healthcare stocks witnessed selling pressure.

At the closing bell on Friday, the BSE Sensex stood higher by 33 points (up 0.1%) and the NSE Nifty closed higher by 14 points (up 0.1%). The BSE Mid Cap index ended the day up by 0.1%, while the BSE Small Cap index ended the day flat.

Top Stocks in Focus Today

Form the automobiles sector, Motherson Sumi will be in focus today as media reports last week suggested that the company is in talks to acquire or merge with Germany-based Leoni, the largest maker of special automotive cables globally.

To know more about the company you can read Motherson Sumi Q2FY19 result analysis and Motherson Sumi Annual Report analysis on our website.

From the pharma sector, Lupin share price will be in focus today as the company last week announced that it has received tentative approval for its Dimethyl Fumarate Delayed Release Capsules, 120 mg and 240 mg from the United States Food and Drug Administration (FDA).

From the energy space, market participants will be tracking Indian Oil Corporation share price today. Shares of the company witnessed buying interest on Friday after the company announced a buyback of 3.06% equity share at a price of Rs 149 per stock for a consideration not exceeding Rs 44 billion.

The company's board also recommended an interim dividend of 67.5% (i.e. Rs 6.75 per share) for FY19.

--- Advertisement ---
Get One of Our Best Services FREE For A Year!

It's not every day that we do something like this. That's why we want you to grab this opportunity with both hands before it disappears.

Simply stated, you now have an opportunity to get one of our best services – our small cap service, Hidden Treasure – FREE for a year.

Yes! Hidden Treasure recommendations have given several triple-digit and even four-digit gains in the long run. And a year's subscription to Hidden Treasure normally costs Rs 6,000.

This offer will expire very shortly and may NEVER be available again. And the reason we're giving this now is due to the recent market crash, a number of solid small caps are also available cheap right now.

So don't delay. Click here for full details right away!
------------------------------

November WPI at 3-Month Low

According to the government data released on Friday, inflation based on wholesale prices (WPI) fell to a three-month low of 4.64% in November. This was seen as prices of food articles, especially vegetables, softened.

The Wholesale Price Index (WPI)-based inflation stood was 5.28% in October and 4.02% in November last year.

As per the data, food articles witnessed softening of prices with deflation at 3.31% in November, against 1.49% in October. Vegetables also became cheaper with deflation at 26.98% in November, compared to 18.65% in October.

Inflation for the fuel and power basket however continued to rule high at 16.28% on account of lowering of prices of petrol and diesel. But this was lower than 18.44% in October.

How this pans out in the coming months remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Additional Capital Infusion in PSBs

In the news form the macroeconomic space, the government is considering additional capital infusion of up to Rs 300 billion in public sector banks (PSBs) as they have been unable to raise required funds from the markets.

As part of the capital infusion plan announced by the Finance Ministry in October 2017, the government envisaged that PSBs would raise Rs 580 billion from the stock markets by March 2019 to meet Basel III norms.

However, due to subdued market conditions, banks have been unable to raise enough funds from the markets so far.

In addition, non-performing assets of many banks have seen a spurt in the first two quarters of this fiscal, putting stress on their bottomlines.

However, the banks have got a breather in respect of Capital Conservation Buffer (CCB), a part of Basel III norms. The RBI, at its last board meeting, deferred the requirement to meet the CCB target by one year, leaving about Rs 370 billion in the hands of banks.

Despite this relaxation, PSBs need more funds to meet global capital norms called Basel III as the RBI has retained the capital to risk weighted assets ratio (CRAR) at 9%, and the shortfall could be around Rs 300 billion, the reports noted.

The government had decided to take a massive step to capitalise PSBs in a front-loaded manner, with a view to support credit growth. This entailed mobilisation of capital to the tune of about Rs 2,110 billion over the next two years, through budgetary provisions of Rs 181.4 billion, recapitalisation bonds of Rs 1,350 billion, and the balance through raising of capital by banks from the market while diluting government equity estimated at Rs 580 billion.

As per this plan, the remaining capital infusion is about Rs 420 billion.

Earlier this year, the government pumped in Rs 113.4 billion into five PSBs, including PNB, Allahabad Bank, Indian Overseas Bank, Andhra Bank and Corporation Bank to improve their financial health.

However, using recapitalisation bonds can only act as a short-term measure to the crisis afflicting Indian public sector banks today. Such a measure will not address the structural issue in the banking system, i.e. the poor standard of lending and poor governance system.

Our big picture editor, Vivek Kaul, talks about moral hazard risk arising out of recapitalization. He writes...

  • If the government bails them around this time around, the banks know that they can count on the government bailing them out the next time around as well. And this means that they can follow fairly loose standards of lending, in order to lend money quickly.

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


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

Equitymaster requests your view! Post a comment on "Of Capital Infusion in PSBs, November WPI Inflation, and Top Cues in Focus Today". Click here!

  

Stock Market Updates

SUNTECK REALTY Share Price Up by 5%; BSE REALTY Index Up 2.1% (Today's Market)

Aug 4, 2020 03:17 PM

SUNTECK REALTY share price is trading up by 5% and its current market price is Rs 191. The BSE REALTY is up by 2.1%. The top gainers in the BSE REALTY Index is SUNTECK REALTY (up 5.2%). The top losers are MAHINDRA LIFESPACE and PHOENIX MILL (down 2.0%).

MISHRA DHATU NIGAM LTD Share Price Up by 5%; BSE METAL Index Up 1.4% (Today's Market)

Aug 4, 2020 02:59 PM

MISHRA DHATU NIGAM LTD share price is trading up by 5% and its current market price is Rs 208. The BSE METAL is up by 1.4%. The top gainers in the BSE METAL Index is MISHRA DHATU NIGAM LTD (up 5.0%). The top losers is NMDC LTD (down 0.2%).

IPCA LABS Share Price Up by 5%; BSE HEALTHCARE Index Up 1.2% (Today's Market)

Aug 4, 2020 02:59 PM

IPCA LABS share price is trading up by 5% and its current market price is Rs 1,997. The BSE HEALTHCARE is up by 1.2%. The top gainers in the BSE HEALTHCARE Index are IPCA LABS (up 5.0%) and APOLLO HOSPITALS (up 5.2%). The top losers are PROCTER & GAMBLE HEALTH and PFIZER (down 0.1%).

VAIBHAV GLOBAL Share Price Up by 10%; BSE 500 Index Up 1.6% (Today's Market)

Aug 4, 2020 02:55 PM

VAIBHAV GLOBAL share price is trading up by 10% and its current market price is Rs 1,485. The BSE 500 is up by 1.6%. The top gainers in the BSE 500 Index are VAIBHAV GLOBAL (up 10.3%) and FINE ORGANIC INDUSTRIES (up 10.4%). The top losers are NMDC LTD (down 0.1%) and TCS (down 0.1%).

FINE ORGANIC INDUSTRIES Share Price Up by 10%; BSE 500 Index Up 1.6% (Today's Market)

Aug 4, 2020 02:53 PM

FINE ORGANIC INDUSTRIES share price is trading up by 10% and its current market price is Rs 2,440. The BSE 500 is up by 1.6%. The top gainers in the BSE 500 Index are FINE ORGANIC INDUSTRIES (up 10.0%) and RAJESH EXPORTS (up 10.2%). The top losers are BIOCON and TCS (down 0.1%).

Sensex Surges 550 Points; HDFC Bank & Reliance Industries Top Gainers (Today's Market)

Aug 4, 2020 12:30 pm

The BSE Sensex is trading up by 566 points, while the NSE Nifty is trading up by 158 points.

View More Indian Share Market News

Most Popular

Why the Stock of HDFC Bank Deserves a Closer Look than Before...(Profit Hunter)

Jul 22, 2020

HDFC Bank's results point to a gaping hole in Indian financial sector. Possibly even a global contagion.

These 5 Smallcaps Deserve a Place in Your Coffee Can Portfolio(Profit Hunter)

Jul 28, 2020

When it comes to quality stocks, doing less is more.

My Best Trading Ideas When Interest Rates Are So Low(Fast Profits Daily)

Jul 23, 2020

India's interest rates are lower than the inflation rate. Here are the best trades for this situation.

Gold or Silver: Which One Should You Buy Now?(Fast Profits Daily)

Jul 24, 2020

Silver and gold are both vying for your attention. Which is the better trade today?

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Aug 4, 2020 03:37 PM

MARKET STATS