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Sensex Plunges 788 Points, Huge Selling at Banks, and Top Cues in Focus Today
Tue, 7 Jan Pre-Open | Monish Vora, TM Team

Indian share markets fell sharply yesterday, tracking a global selloff amid the US-Iran tensions. The BSE Sensex fell over 800 points, breaching the 41,000-mark, while the Nifty fell below 12,000.

All sectoral indices ended on a negative note, with stocks in the metal sector, banking sector and finance sector, leading the losses.

At the closing bell yesterday, the BSE Sensex stood lower by 788 points (down 1.9%) and the NSE Nifty closed down by 234 points (down 1.9%).

The BSE Mid Cap index and the BSE Small Cap index ended the day down by 2.3% and 2%, respectively.

Speaking of share markets, in the video below, Rahul Shah shares a tip that he believes will hold good not just in 2020 but well beyond.

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Top Stocks in Focus Today

From the banking sector, shares of Karur Vyasa Bank will be in focus today as the lender said its Managing Director & CEO P R Seshadri has submitted his resignation citing personal reasons.

The bank in a regulatory filing said, "board of Directors of the Bank in their meeting held Monday has accepted the resignation of P R Seshadri."

The filing added that Seshadri will be relieved from the services of the bank at the close of working hours on 31st March 2020 as per his request.

From the retail sector, Titan Company share price will be in focus today as the company's jewelry sales for the December quarter (Q3FY20) came in line with guidance.

The company said that "retail sales in jewellery were better than expected at the beginning of Q3FY20, possibly due to a good wedding season and reasonable inelasticity of wedding jewellery. The industry witnessed satisfactory growth in the festive season and the company performed better than industry, which led to market share gains."

Rising Forex Reserves

In the news from the macroeconomic space, India's forex reserves jumped by US$ 2.5 billion in the week ended 27 December.

India's foreign exchange reserves jumped by US$ 2.5 billion to US$ 457.5 billion in the week ended 27 December 2019. The foreign exchange reserves had stood at US$ 455 a week ago.

Within the foreign exchange reserves, the foreign currency assets moved up to US$ 424.9 billion in the week ended 27 December 2019 from US$ 422.7 billion a week ago.

The gold asset also increased to US$ 27.4 billion from US$ 27.1 billion a week ago.

India's foreign exchange reserves increased by US$ 44.6 billion over March 2019, while jumped US$ 64.1 billion over a year ago level.

Banking Sector Stocks Witness Huge Selling

Shares of Punjab National Bank, Bank of Baroda, State Bank of India (SBI) and Canara Bank witnessed selling pressure yesterday as heightened tensions between the United States and Iran pushed bond yields higher in India.

Private banks including RBL Bank, Federal Bank, Yes Bank and ICICI Bank also fell in the range of 2-3%.

US President Donald Trump on Sunday vowed "major retaliation" if Iran tried to avenge the death of its key military commander Qasem Soleimani, who was killed by the US military on Friday.

In response, Tehran decided to "abandon the limits, imposed on it, under the 2015 nuclear deal".

Apart from higher yields, selling pressure at banks was seen amid reports that the government may not propose fresh capital infusion under Union Budget 2020, and will rather encourage them to expedite recovery of bad loans and raise funds from the market.

According to the report, banks may be asked to divest or sell their non-core business as part of fund-raising exercise during 2020-21.

Banks may be asked to depend on the "robust pipeline of recovery from the resolution of both NCLT and non-NCLT cases" during this calendar year and also maintain headroom for raising capital from the market.

Finance Minister Nirmala Sitharaman is expected to present the second budget of the Modi 2.0 government on February 1.

SBI has already initiated the process of diluting its stake in its subsidiaries SBI Cards and Payment Services and UTI Mutual Fund.

Note that the government has already front loaded Rs 688.6 billion, out of Rs 700 billion earmarked for capital infusion for the current fiscal, to take care of the mega-merger plan announced in August 2019.

How the above developments pan out in the coming days remains to be seen.

National Stock Exchange IPO

The National Stock Exchange (NSE) on Monday said it has approached markets regulator for its initial public offering and hopes to launch the public issue by September this year subject to approvals.

The entire IPO would be offer-for-sale (OFS), wherein existing shareholders will sell NSE's shares.

The country's largest lender SBI, earlier this month, announced that it is looking to sell 5 million shares representing 1.01% stake in the NSE as part of its capital raising exercise.

Currently, SBI holds 5.2% stake in the exchange.

Earlier in December 2016, NSE had filed draft papers for its much-awaited IPO.

However, NSE's listing plans hit a roadblock following a probe by markets regulator against the exchange and some of its top officials. It was alleged that the exchange misused its co-location facility and gave preferential access to certain trading members.

In April 2019, the regulator had barred NSE from accessing the capital markets for a period of six months. It had also asked NSE to "disgorge" more than Rs 6.3 billion along with 12% interest per annum in connection with the co-location case.

NSE aims to raise about Rs 100 billion from the IPO, which would result in existing promoters selling 22-24% of their stakes.

LIC of India, SBI Group, IDBI, Norwest Venture Partners and GS Strategic Investments Ltd (Mauritius) are among the shareholders that may sell a portion of their stake through the public offering.

How this IPO sails through remains to be seen. We will keep you updated on all the developments from this space. Stay tuned.

Speaking of IPOs, Ankit Shah keeps a tab on all the IPOs and shares insights for his readers at Equitymaster Insider (requires subscription).

He's closely watching IPOs in 2020 and is going to pick all the profitable ones for his readers at Equitymaster Insider. In one of his recent articles, he has explained why keeping a tab on the IPO market is vital to your overall investing goals. You can read it here: What I Learnt from IPOs in 2019 (requires subscription).

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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Stock Market Updates

GRANULES INDIA at 52 Week High; BSE 500 Index Down 0.3 % (Today's Market)

Feb 18, 2020 03:34 PM

GRANULES INDIA share price has hit a 52-week high. It is presently trading at Rs 180. BSE 500 Index is down by 0.3% at 15,684. Within the BSE 500, GRANULES INDIA (up 2.3%) and TV18 BROADCAST (up 14.9%) are among the top gainers, while top losers are BHARTI INFRATEL and VODAFONE IDEA.

CARE RATING Plunges by 5%; BSE 500 Index Down 0.3% (Today's Market)

Feb 18, 2020 03:32 PM

CARE RATING share price has plunged by 5% and its current market price is Rs 515. The BSE 500 is down by 0.3%. The top gainers in the BSE 500 Index are TV18 BROADCAST (up 14.9%) and JAIPRAKASH ASSO. (up 9.9%). The top losers are CARE RATING (down 5.2%) and TORRENT POWER LTD (down 5.9%).

BEML LTD. Plunges by 5%; BSE CAPITAL GOODS Index Up 0.3% (Today's Market)

Feb 18, 2020 03:30 PM

BEML LTD. share price has plunged by 5% and its current market price is Rs 915. The BSE CAPITAL GOODS is up by 0.3%. The top gainers in the BSE CAPITAL GOODS Index are BHARAT ELECTRONICS (up 3.0%) and SCHAEFFLER INDIA LTD (up 2.9%). The top losers are BEML LTD. (down 5.1%) and SADBHAV ENGINEERING (down 7.9%).

ESCORTS LIMITED at 52 Week High; BSE 500 Index Down 0.4 % (Today's Market)

Feb 18, 2020 03:28 PM

ESCORTS LIMITED share price has hit a 52-week high. It is presently trading at Rs 896. BSE 500 Index is down by 0.4% at 15,684. Within the BSE 500, ESCORTS LIMITED (up 1.1%) and TV18 BROADCAST (up 14.5%) are among the top gainers, while top losers are VODAFONE IDEA and BHARTI INFRATEL.

ABBOTT INDIA Surges by 5%; BSE HEALTHCARE Index Down 0.0% (Today's Market)

Feb 18, 2020 03:18 PM

ABBOTT INDIA share price has surged by 5% and its current market price is Rs 15,441. The BSE HEALTHCARE is down by 0.0%. The top gainers in the BSE HEALTHCARE Index is ABBOTT INDIA (up 5.1%). The top losers are THYROCARE TECHNOLOGIES (down 0.5%) and BLISS GVS PHARMA (down 0.5%).

Sensex Slips 400 Points; IndusInd Bank & Tata Steel Top Losers (Today's Market)

Feb 18, 2020 12:30 pm

The BSE Sensex is trading down by 396 points, while the NSE Nifty is trading down by 122 points.

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