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Sensex Ends 307 Points Higher; Metal and Oil & Gas Stocks Witness Buying
Mon, 17 Dec Closing | Monish Vora, TM Team

Indian share markets traded on a positive note throughout the day and ended on a strong note. Gains were seen in the metal sector, oil & gas sector and power sector, while realty stocks and IT stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 307 points (up 0.9%) and the NSE Nifty closed higher by 83 points (up 0.8%). The BSE Mid Cap index ended the day up 0.4% and the BSE Small Cap index ended the day up by 0.3%.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 0.1% and the Shanghai Composite was up by 0.2%. The Nikkei 225 was up 0.6%.

The rupee was trading at 71.62 against the US$.

In the news from the automobiles sector, Tata Motors share price was in focus today after a news report suggested that the company-owned Jaguar Land Rover (JLR) plans to cut thousands of jobs as part of a turnaround strategy.

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Earlier, JLR reduced the workforce at the plant in Solihull, Central England. The company also reported that the external environment remains challenging and decisive actions are taken to achieve the necessary operational efficiencies to safeguard long term success. Jaguar Land Rover (JLR) has also won the backing of the UK government's 25-million Pounds grant intended to accelerate the development of innovative low-carbon vehicle technologies.

Last month, Moody's Investors Service changed the outlook on Tata Motors's corporate family rating to negative from stable.

In the past one week, the auto company has rallied around 12%, outperforming the market.

To know more about the company, you can access to Tata Motors Q2FY19 result analysis and Tata Motors stock analysis on our website.

In the news from the banking space, Bandhan bank share price witnessed buying interest today after the Kolkata-based private sector lender received prior approval from the Reserve Bank of India (RBI) to open new branches.

Shares of the bank have rallied 19% in the last four trading sessions on back of the above news.

In September, the Reserve Bank of India had barred Bandhan Bank from opening new branches without its approval and had ordered it to freeze the MD's salary over its failure to meet shareholding rules.

The RBI took the decision as the bank was not able to bring down the shareholding of non-operative financial holding company to 40%, as required under the licensing condition.

According to RBI's new licensing guidelines, the bank's promoter, Bandhan Financial Holdings Ltd, has to reduce its stake from 82% to 40% within three years of commencing the business.

Thereafter, banks are required to reduce their shareholding to 20% and 15% within 10 years and 12 years, respectively. Bandhan Bank's deadline ended on 23 August.

Bandhan Bank share price closed the day higher by 7.5%.

In another news, Kotak Mahindra bank was also in focus today after the Bombay high court refused to grant stay on 31st December deadline given by the RBI for promoter stake dilution.

Earlier this month, reports stated that Warren Buffett's Berkshire Hathaway Inc is planning to invest about $4 billion to $6 billion in the bank.

Reportedly, Berkshire Hathaway may invest in the lender by buying promoter stake or through a preferential allotment.

As per RBI guidelines, Uday Kotak needs to dilute his stake to below 20% by December 2018 to ensure a wider ownership of banks. Earlier, Uday Kotak had sought Reserve bank of India's (RBI) permission to bring down his stake in the bank to 20% from the current 30% by selling nonconvertible perpetual noncumulative preference shares (PNCPS) to a group of investors in August 2018. RBI, however, shot down this arrangement.

Speaking of corporate banks, Sarvajeet offers an interesting observation on a corporate bank stock.

Here's what he wrote in one of the recent editions of The 5 Minute WrapUp...

  • Corporate banks have underperformed retail-focused banks in the last five years. The chart below shows the annualised returns of the last five years.
Corporate Banks Underperforming Retail-focused Banks

  • Retail-focused banks such as HDFC Bank and Kotak Mahindra bank performed significantly better compared to corporate banks. One of the important reasons for this outperformance is stable asset quality. They could maintain gross NPAs below 1% in the previous five years.

    Whereas corporate focused banks such as ICICI Bank, Axis Bank, and SBI are facing serious asset quality issues. Not to mention, some of these banks had management issues as well. No wonder these banks not only underperformed retail-focused banks, but also the BSE Bank index as well.

    But as I mentioned earlier, the worst is behind them.

    We recommended a corporate bank in Smart Money Secrets.

    Its aggressive clean-up of its corporate loan book, hiring the right people at the top, adoption of digital technology, and using algorithms in its core operations, bodes well for the bank and its stock. Smart Money Subscribers can access the report here.

If you do not have access to Smart Money Secrets, you can sign up 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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Stock Market Updates

RELIANCE POWER Plunges by 12%; BSE POWER Index Up 0.5% (Today's Market)

Jun 18, 2019 02:34 PM

RELIANCE POWER share price has plunged by 12% and its current market price is Rs 5. The BSE POWER is up by 0.5%. The top gainers in the BSE POWER Index are NHPC LTD (up 1.9%) and KALPATARU POWER (up 1.8%). The top losers are RELIANCE POWER (down 11.9%) and RELIANCE INFRA (down 17.3%).

RELIANCE CAPITAL Plunges by 11%; BSE 500 Index Up 0.1% (Today's Market)

Jun 18, 2019 02:34 PM

RELIANCE CAPITAL share price has plunged by 11% and its current market price is Rs 73. The BSE 500 is up by 0.1%. The top gainers in the BSE 500 Index are VARUN BEVERAGES LTD (up 5.0%) and SRF LTD (up 4.6%). The top losers are RELIANCE CAPITAL (down 10.7%) and DHFL (down 10.0%).

IRB INFRA. Plunges by 5%; BSE REALTY Index Down 0.2% (Today's Market)

Jun 18, 2019 02:34 PM

IRB INFRA. share price has plunged by 5% and its current market price is Rs 111. The BSE REALTY is down by 0.2%. The top gainers in the BSE REALTY Index are OBEROI REALTY (up 1.1%) and INDIABULLS REAL EST (up 0.7%). The top losers is IRB INFRA. (down 5.0%).

GRANULES INDIA Plunges by 5%; BSE HEALTHCARE Index Down 0.2% (Today's Market)

Jun 18, 2019 02:34 PM

GRANULES INDIA share price has plunged by 5% and its current market price is Rs 96. The BSE HEALTHCARE is down by 0.2%. The top gainers in the BSE HEALTHCARE Index are ASTRAZENECA PHARMA (up 3.4%) and JUBILANT LIFE SCIENCES (up 3.1%). The top losers are GRANULES INDIA (down 5.4%) and PIRAMAL ENTERPRISES (down 5.8%).

CG POWER & INDUSTRIAL Plunges by 5%; BSE CAPITAL GOODS Index Up 0.3% (Today's Market)

Jun 18, 2019 02:34 PM

CG POWER & INDUSTRIAL share price has plunged by 5% and its current market price is Rs 30. The BSE CAPITAL GOODS is up by 0.3%. The top gainers in the BSE CAPITAL GOODS Index are KALPATARU POWER (up 1.8%) and LAKSHMI MACHINE (up 1.7%). The top losers are CG POWER & INDUSTRIAL (down 5.3%) and SUZLON ENERGY (down 7.4%).

Sensex Opens Marginally Higher; IT and Power Stocks Lead (Today's Market)

Jun 18, 2019 09:30 am

Indian share markets open on a positive note with Sensex up by 66 points, while the Nifty is trading higher by 11 points.

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Jun 18, 2019 02:41 PM