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Indian Indices Trade Marginally Higher; IT Stocks Witness Buying
Fri, 13 Jul 12:30 pm | Monish Vora, TM Team

Stock markets in India are presently trading marginally higher. Sectoral indices are trading on a mixed note with stocks in the IT sector and energy sector witnessing maximum buying interest. Telecom stocks are trading on a negative note.

The BSE Sensex is trading up 85 points (up 0.2%) and the NSE Nifty is trading up 14 points (up 0.1%). The BSE Mid Cap index is trading down by 0.5%, while the BSE Small Cap index is trading down by 1%.

The rupee is trading at 68.46 to the US$.

In the news from the commodity space, as per the latest government data, US crude oil exports to India hit a record in June.

Also, so far this year, US exports of crude oil are almost double that of last year's total as the Asian nation's refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration.

As per the data, producers and traders in the US will send more than 15 million barrels of US crude oil to India this year through July. This is compared with 8 million barrels in all of 2017.

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Note that, global oil prices have climbed steadily this year, helped by rising demand. They have topped US$ 80 per barrel in May for the first time in three and a half years.

Rising crude oil prices doesn't bode well for the Indian economy, as it not only affects fuel prices, but also has many other repercussions on the macroeconomic level.

They can be a big worry for the Modi government as well as it has been a big beneficiary of lower crude oil prices.

Have a look at the chart below. It shows India's total import bill of crude oil and petroleum products on an annual basis during the Manmohan Singh regime and the Narendra Modi regime.

Here's Why Crude Oil Was Modi's Best Friend So Far

As Ankit Shah wrote in one of the editions of The 5 Minute WrapUp...

  • During the UPA II regime, India's average annual oil import bill was US$ 133 billion. In fact, in the last three years of Manmohan Singh's leadership, the oil import bill exceeded US$ 150 billion. Compare that with an average annual oil bill of US$ 95 billion during the four years of Modi's leadership.

    The actual savings would have been even higher, because I believe the consumption of crude oil and petroleum products would have been quite higher in the Modi era than the Manmohan era.

    Last Thursday, Brent crude oil prices shot above US$ 80 a barrel.

    This is the highest level since 2014. In the past one year alone, oil prices have surged more than 50%.

    Now, what if oil prices go back to the levels during the Manmohan Singh regime? What would happen to India's current account and fiscal deficit? What would happen to inflation and RBI's stance on interest rates?

    With the next general elections just a year away, rising crude oil prices are going to be a big worry for the Modi government.

    It should worry you too...

Apart from that, what does rising crude oil prices mean for stock markets?

Richa Agarwal, editor of Hidden Treasure, tracks the oil and gas sector very closely. She believes the rise in crude oil prices is a bearish sign for stock markets globally. At the same time, any market correction, will throw up interesting buying opportunities in small-cap stocks.

This is what she wrote...

  • After hitting a low of US$ 30 per barrel in January 2016, prices have more than doubled to US$ 68 in April 2018.

    The recent news of Saudi Arabia wanting crude oil prices to touch US$ 100 per barrel doesn't help. The 2008 recession was preceded by crude oil touching US$ 150 per barrel. Any movement upwards can result in a possible downturn for the global market.

    While the Hidden Treasure team looks for long-term wealth creators, such macro situations can help to recommend such stocks at a bargain. The ones who keeps calm, when everyone else is losing their heads, will gain the most when the tide turns.

How the government handles this situation of rising crude oil and fuel prices remains to be seen. Meanwhile, we will keep you posted on all the developments from this space. Stay tuned.

In the news from IT space, HCL Technologies share price is in focus today. Shares of the company are witnessing selling pressure today following the announcement of its share buyback.

The company's board has approved a proposal to buy back shares of up to Rs 40 billion at Rs 1,100 apiece.

At the time of writing, HCL Technologies share price was trading down by 2.1%.

Speaking of buybacks, the number of buyback offers in 2017-18 were at an all-time high. Never, in the last two decades, Indian markets saw fifty-nine companies announcing buyback plans.

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.

At Equitymaster, we believe, 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.

It's a matter of time before you get to use the cash for buying stocks, you've always wanted to, at attractive bargains.

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

LAKSHMI MACHINE Surges by 6%; BSE CAPITAL GOODS Index Up 0.9% (Today's Market)

Nov 13, 2018 02:55 PM

LAKSHMI MACHINE share price has surged by 6% and its current market price is Rs 6,150. The BSE CAPITAL GOODS is up by 0.9%. The top gainers in the BSE CAPITAL GOODS Index is LAKSHMI MACHINE (up 5.5%). The top losers are THERMAX LTD (down 0.1%) and AIA ENGINEERING (down 0.2%).

ASHOKA BUILDCON Surges by 11%; BSE REALTY Index Down 0.6% (Today's Market)

Nov 13, 2018 02:39 PM

ASHOKA BUILDCON share price has surged by 11% and its current market price is Rs 138. The BSE REALTY is down by 0.6%. The top gainers in the BSE REALTY Index is ASHOKA BUILDCON (up 10.7%). The top losers are PHOENIX MILL (down 0.1%) and DLF LTD (down 0.1%).

NCC LTD Surges by 5%; BSE REALTY Index Down 0.8% (Today's Market)

Nov 13, 2018 02:21 PM

NCC LTD share price has surged by 5% and its current market price is Rs 87. The BSE REALTY is down by 0.8%. The top gainers in the BSE REALTY Index is NCC LTD (up 5.1%). The top losers are PHOENIX MILL (down 0.1%) and DLF LTD (down 0.6%).

ASHOKA BUILDCON Surges by 6%; BSE REALTY Index Down 0.8% (Today's Market)

Nov 13, 2018 02:13 PM

ASHOKA BUILDCON share price has surged by 6% and its current market price is Rs 130. The BSE REALTY is down by 0.8%. The top gainers in the BSE REALTY Index is ASHOKA BUILDCON (up 5.7%). The top losers are OMAXE LTD and PHOENIX MILL (down 0.1%).

ALLAHABAD BANK Plunges by 11%; BSE BANKEX Index Up 0.5% (Today's Market)

Nov 13, 2018 02:13 PM

ALLAHABAD BANK share price has plunged by 11% and its current market price is Rs 43. The BSE BANKEX is up by 0.5%. The top gainers in the BSE BANKEX Index are AXIS BANK (up 1.3%) and ICICI BANK (up 1.1%). The top losers is ALLAHABAD BANK (down 10.6%)..

Indian Share Markets Trade Flat; Tata Motors & Sun Pharma Top Losers (Today's Market)

Nov 13, 2018 12:30 pm

The BSE Sensex is trading up by 76 points, while the NSE Nifty is trading up by 26 points.

View More Indian Share Market News

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