Sensex Ends 164 Points Lower; Bajaj Finserv and Shree Cement Among Top Nifty Losers

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Indian share markets witnessed negative trading activity throughout the day today and ended lower.

Benchmark indices edged lower in today's session after India's manufacturing PMI fell below 50 for the first time since July 2020 to 48.1 in June 2021, as the intensification of the pandemic and strict containment measures negatively impacted the country's demand.

At the closing bell, the BSE Sensex stood lower by 164 points (down 0.3%).

Meanwhile, the NSE Nifty closed lower by 42 points (down 0.3%).

Dr Reddy's Labs and Hindalco were among the top gainers today.

Bajaj Finserv and Shree Cement, on the other hand, were among the top losers today.

The SGX Nifty was trading at 15,721, down by 26 points, at the time of writing.

The BSE MidCap index ended down by 0.2%, while the BSE SmallCap index ended up by 0.3%.

Sectoral indices ended on a mixed note with stocks in the power sector, telecom sector and energy sector witnessing most of the selling pressure.

Auto and healthcare stocks, on the other hand, witnessed buying interest.

Shares of KEI Industries and Mindtree hit their respective 52-week highs today.

Asian stock markets ended on a negative note today, weighed by worries about new coronavirus infections and fresh lockdowns.

The Hang Seng and the Shanghai Composite ended the day down by 0.6% and 0.1%, respectively.

The Nikkei ended down by 0.3% in today's session.

US stock futures are trading on a positive note today with the Dow Futures trading up by 44 points.

The rupee is trading at 74.56 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.5% at Rs 47,086 per 10 grams.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani shares why he has turned cautious on the market, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

In news from the energy sector, IOC was among the top buzzing stocks today.

Indian Oil Corporation (IOC) plans to invest Rs 45 bn to set up India's first-ever styrene monomer project in Haryana.

The Indian Oil's board has accorded stage - 1 approval for implementation of styrene monomer project with a capacity of 387 thousand metric tonnes per annum (TMTPA) at Indian Oil's Panipat refinery and petrochemical complex.

Styrene is used to produce poly styrene, paints and coatings / acrylic, unsaturated polyester resins, and elastomers such as acrylonitrile butadiene styrene (ABS), styrene-butadiene rubber (SBR) etc.

Presently India's Styrene consumption is around 900 TMTPA, and the demand is expected to increase consistently over the next 15-20 years.

However, there is no domestic Styrene capacity in India. The entire demand is met through imports from Singapore, Middle East and Southeast Asia, causing significant inconvenience to the domestic Styrene downstream industry.

The proposed Styrene project will address this issue to a great extent and reduce the nation's import dependence substantially.

Thus, considerable forex savings of about Rs 36.5 bn (US$500 m) per annum is likely to be generated.

'The project would be commissioned by 2026-27. Availability of Styrene domestically is expected to accelerate the growth of downstream industry and create employment opportunities,' the company said.

Earlier in February 2021, the Indian Oil board approved the Panipat refinery expansion project to enhance its capacity from the existing 15 MMTPA to 25 MMTPA with a capital expenditure (CAPEX) of Rs 329.5 bn.

IOC share price ended the day down by 0.4% on the BSE.

Moving on to news from the banking sector...

Union Bank of India's Board Approves Fund Raising Plan

Union Bank of India's board of directors on Wednesday approved fund raising, including via equity and bonds, of up to Rs 97 bn.

Within the overall limit of Rs 97 bn, the public sector bank is planning to raise up to Rs 35 bn via equity and up to Rs 62 bn via bonds (Additional Tier 1 and/or Tier 2), according to a regulatory filing.

The raising of equity capital will be through one or more routes, including follow-on public offer, rights issue, private placement including qualified institutions placement and preferential allotment to the government of India and/or other institutions, as per the filing.

The bank will be obtaining shareholders' approval for the capital plan at the 19th annual general meeting (AGM) on 10 August 2021.

In the last month, Union Bank of India posted a standalone net profit of Rs 13.3 bn for the quarter ended March 2021.

The state-run lender reported a loss of Rs 25 bn in the same period of previous fiscal.

The bank saw its asset quality improve, with gross non-performing assets (NPAs) decline to 13.7% of the gross advances as of 31 March 2021, against 14.2% in the last year.

Union Bank of India is one of the largest Indian government-owned banks. It is under the ownership of Ministry of Finance, with more than 120 m customers and a total business of US$106 bn.

Union Bank of India share price ended the day up by 0.4% on the BSE.

Speaking of public sector undertakings (PSU), have a look at the chart below which shows the performance of BSE PSU index compared to BSE Sensex over the past few years.

As can be seen from the chart above, over the last decade, Rs 100 invested in BSE-PSU index would have eroded to Rs 80, compared to almost 3x gains for the Sensex.

Here's what Richa Agarwal, lead Smallcap Analyst at Equitymaster, wrote about PSU stocks in a recent edition of Profit Hunter:

• However, it will be folly to paint all PSUs with the same brush. There are some exceptions in this space, which put their private peers to shame.
  
  In a recent editorial, I shared an opportunity in a PSU stock that is riding and enabling an irreversible megatrend - digitisation.

One of Richa's stock recommendation (subscription required) is a stock from this space. This smallcap PSU is leading the digitisation drive from the frontlines.

Richa believes it could be a perfect bet for these uncertain times. Hidden Treasure subscribers can read the recommendation here.

And if you're not a subscriber, here's where you can sign up.

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