Political Instability in the US; India's Air Passenger Traffic & Top Stocks in Action Today

Wed, 26 Dec Pre-Open

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On Monday, the Indian share markets continued their losing streak for the third consecutive session, ending the Christmas-eve by falling nearly 1%. The Sensex ended at 35,470, down 272 points, while Nifty50 index settled at 10,664, down 91 points.

Barring the IT index, all sectoral indices ended in the red, with automobiles, banks, FMCG, energy and metals leading the losses.

Wipro and TCS were the top gainers, while Hero MotoCorp, Bajaj Auto, and JSW Steel lost the most.

Top Stocks in Focus

Board of Directors of the Max India has considered and approved a composite scheme of amalgamation and arrangement amongst Max India, Max Healthcare Institute, Radiant Life Care. The stock will be watched out for today.

Indigo share price will be in focus today as the airline's parent InterGlobe Aviation signed a codeshare and mutual cooperation agreement with Turkish Airlines as part of its international expansion strategy.

Sun Pharmaceutical Industries' wholly owned subsidiary has received approval from US Food and Drug Administration (USFDA) for the New Drug Application (NDA), for Elepsia XR 1000 mg and Elepsia XR 1500 mg.

Meanwhile, Zydus received approvals from the USFDA for Doxycycline Hyclate Delayed-Release Tablets and Febuxostat Tablets. Cadila Healthcare share price will be in focus.

Dr. Reddy's Laboratories has launched Aspirin and Extended-Release Dipyridamole Capsules, a therapeutic equivalent generic version of Aggrenox Capsules in the United States (US) market from the USFDA.

GE Power India share price will hog limelight today as the company bagged electrical and mechanical works contract in Malaysia.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

By the way, you can read our recently released Q2FY19 result analysis of the following companies: Asian Paints, TVS Motors, Wipro, Ambuja Cement, HDFC Bank, Infosys and more.

Global Stock Market Drivers

Asian stocks were subdued on Monday as investors fretted that political instability in the United States was leaving the country rudderless at a time when the global economy was showing signs of faltering.

Moves were limited by a holiday in Japan while many bourses are set to close early for Christmas.

Donald Trump's budget director and chief of staff on Sunday said the partial US government shutdown could continue into January.

Trump on Sunday said he was replacing Defense Secretary Jim Mattis two months early, a move driven by the president's anger at Mattis' resignation letter and its rebuke of his foreign policy.

Reportedly, Trump has privately discussed the possibility of firing Federal Reserve Chairman Jerome Powell, a move that would likely roil financial markets.

Treasury Secretary Steven Mnuchin felt it necessary to personally call the heads of the six largest US banks to calm nerves and made plans to convene a group of officials known as the "Plunge Protection Team."

The political uncertainty has only added to the air of risk aversion, punishing equities to the benefit of bonds.

Oil Prices Rise

Oil markets rose on Monday on signs that the recent price plunge may start pressing supply from the United States, though concerns about the global economy continued to weigh.

International benchmark Brent crude futures had risen 0.6% to US$54.12 a barrel. US West Texas Intermediate (WTI) crude futures were up 0.3%, at US$45.74 a barrel. They earlier climbed as high as US$46.24.

Crude prices rebounded from sharp declines last week. Brent fell 11% for the week, dropping to its lowest since September 2017 on Friday, while WTI also lost 11% last week, its worst weekly performance since January 2016.

Both benchmarks are down more than 35% from their recent peaks in early October. The price plunge has caused US shale oil producers to curtail drilling plans for next year.

The market remains skeptical over the effectiveness of the curbs by the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia because of surging American shale production.

While the US is pumping at record levels and inventories are also high, President Donald Trump's trade war with China and the Federal Reserve's rate-hike policy are raising concerns over the health of the global economy.

India's Domestic Air Passenger Traffic Surges

As per Directorate General of Civil Aviation (DGCA)'s latest report, India's domestic air passenger traffic surged by 11% to 11.6 million in November 2018 as compared to 10.5 million in November 2017.

The report also showed that passenger traffic during the January-November 2018 period grew by 19.2%.

Further, passengers carried by domestic airlines during January-November 2018 were 126.2 million as against 105.9 million during the corresponding period of previous year.

The report highlighted that SpiceJet has the highest passenger load factor (PLF) at 91.1% during November 2018. SpiceJet was followed by GoAir with a PLF of 87.6%, AirAsia India at 86.5% and IndiGo at 84.9%.

Speaking of airline sector, India's domestic air traffic has seen a prolific growth of 20-25% during 2015 and 2016. And in 2017, it tapered to 17.4%. However, for the first time, domestic air traffic crossed an important landmark of 100 million passengers during the previous year.

What's foreseeable for India's aviation traffic now is some pressure on the back of the consistent rise in crude oil prices.

Oil prices are closely monitored by the Indian air carriers, as aviation turbine fuel is their single largest input cost. A sharp rise in the cost of fuel puts pressure on margins, and consequently an increase in air fares.

Although air travel is becoming the new normal, investors need to understand the industry dynamics before buying up aviation stocks.

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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