Sensex Ends Flat; IT and FMCG Stocks Witness Selling

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After opening the day at record high levels, Indian share markets erased gains to end on a flat note led by a decline in IT and FMCG stocks.

At the closing bell, the BSE Sensex stood lower by 50 points. Meanwhile, the NSE Nifty ended down by 1 point.

In intraday trade today, the Sensex rallied over 300 points to hit fresh record high while the Nifty rose above 15,400.

Power Grid was among the top gainers today. Axis Bank, on the other hand, was among the top losers today.

SGX Nifty was trading at 15,323, down by 10 points, at the time of writing.

The BSE Mid Cap index ended up by 0.2%. The BSE Small Cap index ended higher by 0.5%.

Sectoral indices ended on a mixed note with stocks in the power sector and metal sector witnessing buying interest.

IT stocks and FMCG stocks, on the other hand, witnessed selling pressure.

Asian share markets ended higher today with Japanese stocks rising to 30-year highs as progress in the distribution of coronavirus vaccines boosted expectations that the global economy is poised for a strong recovery.

The Nikkei ended up 1.3% at 30,467.75, closing at its highest since August 1990.

US stock futures are trading higher today indicating a positive opening for Wall Street indices. Nasdaq Futures are trading up by 52 points, while Dow Futures are trading higher by 186 points.

The rupee is trading at 72.71 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.4% at Rs 47,428 per 10 grams.

Speaking of stock markets, in one of his videos for Fast Profits Daily, Vijay Bhambwani answers queries on intraday trading and also shares his views on how to decide stop losses and target prices.

Tune in to the video below to find out more:

In news from the IPO space...

RailTel Corporation of India kicked off its Rs 8.2-billion initial public offer (IPO) today. The IPO saw strong demand as the issue was oversubscribed in first few hours.

The public offer was subscribed 1.57 times in early morning deals. The issue received bids for 96 million equity shares against offer size of over 61.1 million shares.

The offer size mentioned above is excluding the anchor book. The company raised Rs 2.4 billion from anchor investors on Monday.

The mini-ratna PSU is one of the largest neutral telecom infrastructure providers in the country owning an optic fiber network on exclusive Right of Way (RoW) along railway track. The company provides broadband telecom and multimedia network across the country.

The company has fixed a price band of Rs 93-94 a share for its initial share-sale.

The IPO is entirely an offer-for-sale (OFS) through which government will offload 87,153,369 equity shares, or 27.16% stake.

Half of the issue is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional bidders.

The last railway IPO that hit the street of IRFC had a weak market debut. But grey market trends suggest investors are betting big on the RailTel IPO.

The premium on the unlisted shares of RailTel had surged to Rs 44-47 in the grey market last week, the unofficial market for trading in unlisted shares. That translated into a 50% bump up on the IPO price of Rs 93-94 per share.

How the IPO sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

Moving on to stock specific news...

Security Intelligence Services (SIS) was among the top buzzing stocks today.

Shares of SIS surged 9% to Rs 465 on the BSE in intra-day session after the company announced a share buyback offer worth Rs 1 billion.

The company in an exchange filing on February 15, 2021, said that it would buyback 18,18,181 equity shares, representing 1.24% of the total paid-up equity capital as on March 31, 2020.

The firm has set the buyback price at Rs 550 per share which is 29% higher than its previous close of Rs 426.15.

The board of directors noted the intention of the promoters and members of the promoter group of the company to participate in the proposed buyback.

The promoter and promoter groups held 73.1% of the total equity capital followed by foreign institutional investors (FIIs) that held 14.4% stake and mutual funds that owned 6.6% stake.

SIS share price ended the day up by 2.3%.

Speaking of buybacks, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible use it to your advantage to rake in some cash.

As per Rahul Shah, co-head of Research, investors should not assume buybacks are always good. Here's an excerpt of what he wrote in one of the editions of The 5 Minute Wrapup:

• The reason behind the buyback must be investigated. At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.

Moving on to news from the retail sector, Titan share price was in focus today.

Shares of Titan rose 1% in early trade today after the company said its subsidiary, CaratLane Trading, has incorporated a wholly-owned subsidiary 'StudioC Inc' in Delaware, USA, for retailing jewelry.

StudioC Inc will carry on the business of jewelry retailing. CaratLane will subscribe to the share capital of US$ 150,000, which is 100% of the share capital of StudioC.

Titan Company is engaged in making and selling watches, jewellery, eyewear and others. The company's retail chain (including CaratLane) stands at 1,854 stores, as on 31 December 2020 with a retail area crossing 2.4 million square feet for all its brands covering 292 towns.

Earlier this month, the Tata Group company had posted a 10.9% decline in standalone net profit to Rs 4.2 billion on a 17.6% rise in total income to Rs 73.2 billion in Q3FY21.

Titan share price ended the day down by 0.7%.

Speaking of the country's largest watchmaker, here's an interesting data on Titan...

Even a tiny investment of Rs 1,000 per month in the stock of Titan, since 2002, would have led to mouthwatering returns.

Take a look at how the power of compounding has gone wild here...

Here's what Co-head of Research at Equitymaster, Tanushree Banerjee wrote about it in one of the editions of Profit Hunter:

• It's possible to accumulate a few crores by investing small amounts in good businesses. Especially when the business is in distress and comes with margin of safety in valuations.
  
  Like the stock in my latest special report - First Stock to Potentially Rs 7 Crore Long-term Wealth.
  
  Business headwinds and macro and regulatory issues have kept the stock out of favour in most of 2020.
  
  Given its pedigree, balance sheet strength and cash flows, the stock has a very high chance of rerating once the temporary clouds of uncertainty disperse.
  
  In fact, I believe that 2021 could be for this stock what 2004 was for Titan.

In an upcoming special online event - The Great Indian Wealth Project - Tanushree will show you how to potentially accumulate Rs 7 crore in wealth, over the long-term.

You can sign up for free here.

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!

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