Sensex Ends 314 Points Higher; Capital Goods and Metal Stocks Witness Huge Buying
Closing

Indian share markets ended their trading session on a positive note today.

At the closing bell, the BSE Sensex stood higher by 318 points (up 0.8%) and the NSE Nifty closed higher by 100 points (up 0.8%).

The BSE Mid Cap index ended up by 1.2%, while the BSE Small Cap index ended the day up by 1.4%.

On the sectoral front, gains were seen in the power sector and IT sector. Auto sector and consumer durables sector, on the other hand, witnessed selling.

Asian stock markets finished on a mixed note as of the most recent closing prices. The Hang Seng stood up by 1.25% and the Nikkei was trading down by 0.76%, while the Shanghai Composite was trading up by 1.15%.

European markets were trading on a positive note. The FTSE 100 was up by 0.94%. The DAX was trading up by 0.78%, while the CAC 40 was trading up by 1.27%.

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The rupee was trading at 71.33 to the US$ at the time of writing.

Speaking of Indian share markets, Indian indices have witnessed a starkly polarised situation since 2018, after the uninterrupted bull rally of 2017 entered a period of correction.

While the Sensex recovered from the correction and went on to hitting new life-time highs, the broader markets - predominantly the small and midcap stocks -haven't recovered much.

Ankit Shah has been talking about this trend since a long time. But now, he has even more elaborate data to show you how deep this trend has been.

He pulled out data on 1,638 companies listed on the NSE.

And he shares his observations in a recent edition of The 5 Minute WrapUp...

  • Between 29 December 2017 and 30 December 2019, just 246 companies have witnessed gains. Together, these 246 companies added Rs 29.8 trillion worth of market capitalisation.

    In other words, 1,392 companies are below the levels they traded at the end of December 2017. Together, these 1,392 companies lost Rs 28.6 trillion worth of market capitalisation.

    So, you see the money has literally shifted from one place to another.

Even among the 246 companies that witnessed gains, the major chunk was captured by just a small list of companies.

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This can be seen from the chart below...

A Very Small Group of Stocks Captured All the Gains

As you can see, the top 5 companies captured 41% of all the gains in market capitalisation over the last two years. In fact, the top 30 stocks captured more than 80% of the gains.

In short, money has been rushing to safety, into large, liquid, bluechips stocks.

Where can you look for such bluechip stocks?

You can consider the bluechip recommendations made by our Safe Stocks guru, Tanushree Banerjee. She has picked her top 7 stocks for 2020.

In the news from finance sector, HDFC share price was in focus today. The stock of the company witnessed buying interest after the NBFC received approval from CCI and the Reserve Bank of India (RBI) to acquire of 51.2% stake in Apollo Munich Health Insurance Company.

The NBFC said that it has also received approval for the merger of Apollo Munich with HDFC ERGO General Insurance.

In the news from the commodity space, according to the commerce ministry data, India's gold imports fell about 7% to US$ 20.57 billion during April-November period of the ongoing financial year.

Imports of the yellow metal stood at US$ 22.16 billion in the same period of 2018-19.

The decline in gold imports has helped in narrowing the country's trade deficit to US$ 106.84 billion during the eight-month period under review as against US$ 133.74 billion in the year-ago months.

Note that gold imports have been recording a negative growth since July this year. However, it grew about 5% to US$ 1.84 billion in October and 6.6% to US$ 2.94 billion in November.

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonne of gold annually.

To mitigate the negative impact of gold imports on trade deficit and current account deficit, the government increased the import duty on the metal to 12.5% from 10% in this year's Budget.

The country's gold imports dipped about 3% in value terms to US$ 32.8 billion in 2018-19.

The CAD narrowed to 0.9% of GDP or US$ 6.3 billion in July-September, 2019-20 from 2.9% or US$ 19 billion in same period last year.

How this trend pans out in the coming months remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

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


Indian Indices Extend Gains; Ultratech Cement & Tata Steel Top Gainers
12:30 pm

Share markets in India have extended early gains and are presently trading on a strong note.

Barring consumer durable stocks, all sectoral indices are trading in green with stocks in the metal sector and capital goods sector witnessing most of the buying interest.

The BSE Sensex is trading up by 218 points while the NSE Nifty is trading up by 67 points. The BSE Mid Cap index is trading up by 0.7%, while the BSE Small Cap index is trading up by 1.2%.

The rupee is trading at 71.33 against the US$.

In news from the automobile sector, Maruti Suzuki share price is in focus today.

The company reported total sales of 133,296 units in December 2019, as compared to 128,338 units in December 2018, registering rise of 3.9%.

This includes 125,735 units in domestic market and 7,561 units of exports.

Maruti Suzuki ended 2019 with a drop of 12.3% in its annual sales. Note that this fall is the steepest in almost a decade, amid poor economic growth and a slowdown in overall consumption.

During the year, the company saw its sales volumes contract to 1.6 million units in the domestic market, from 1.8 million units a year ago.

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In other news, as per an article in The Economic Times, sales of passenger vehicles fell below the psychological 3-million mark in 2019, after crossing the figure for the first time in 2017.

India's top seven auto manufacturers reported dispatching 2.67 million passenger vehicles to dealerships in 2019, against 3.12 million the previous year.

The decline was led by the top brands that included Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors, Honda and Toyota.

Passenger vehicle makers in India sold 14% fewer units in 2019 than in the previous year, as prospective customers deferred purchases in a year marked by a grinding slowdown, liquidity crisis and confusion over new emission norms.

Overall, passenger vehicle sales in December fell 6% from a year ago, even as automakers prepare for transition to Bharat Stage VI (BS-VI) emission norms.

Note that India's automobile industry is bracing itself for a unique challenge in the first quarter of 2020 when the transition of BS-IV to BS-VI emission norms has to be made at the stroke of midnight on 31 March 2020.

No BS-IV vehicle could be sold from 1 April 2020, which means automakers would have to reduce their inventory on BS-IV models to zero by then.

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The exercise is likely to see companies show extra caution in dispatching cars to dealers in the next few months, which may cause a continuation of the decline in wholesale numbers.

However, despite the slowdown in the auto sector, the sales volume of electric vehicles (EVs) are growing at a robust pace.

Sale of Electric Vehicles in India Projected to Go Up 10x in the Next Two Decades

Electric vehicles are very much on their way to invading Indian roads. The threat of disruption in this era is something you cannot ignore.

The recently announced government incentives will give a further boost to EV sales.

The coming one year will be a real test for India's auto companies.

It will also tell us if this slowdown is temporary or if there has been a structural change in the sector.

In our view, companies in the sector adapting their business models to the rapidly changing environment will survive and thrive.

Moving on to news from the pharma sector, Sun Pharma's plans to consolidate its subsidiaries have hit a roadblock after the National Company Law Tribunal (NCLT) rejected a proposal in which India's biggest drug-maker sought to demerge an overseas unit.

The company had approached the Ahmedabad bench of NCLT for an approval to transfer investment undertakings from Sun Pharma to its Netherlands-based wholly owned subsidiary.

The decision was approved by Sun Pharma's board in May 2018.

Note that Sun Pharma has been consolidating its businesses lately. In December 2018, the company completed the demerger of the specified business of Sun Pharma Global FZE and its merger into Sun Pharmaceutical Industries.

Sun Pharma share price is presently trading up by 1.8%.

Speaking of the pharma sector, in the video below, Tanushree talks in great detail about the pharma sector.

She tells us where the sector stands now and also about the potential for a rebound.

Tune in to find out more...

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


Sensex Opens Higher; Metal and Capital Goods Stocks Gain
09:30 am

Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 1.4% while the Hang Seng is up 1%. The Nikkei 225 is trading down by 0.8%.

Back home, India share markets opened on a positive note. The BSE Sensex is trading up by 127 points while the NSE Nifty is trading up by 37 points. Both, the BSE Mid Cap index and BSE Small Cap index opened the day up by 0.3%.

Except power stocks and consumer durables stocks, all sectoral indices have opened the day in green with metal stocks and capital goods stocks witnessing maximum buying interest.

The rupee is currently trading at 71.22 against the US$.

In the news from the IPO space. As per an article in a leading financial daily, omni channel cloud communications service provider Route Mobile has received approval from capital market regulator to launch its initial public offering (IPO).

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The offer comprises of a fresh issue worth Rs 2.4 billion and an offer for sale of Rs 3.6 billion by the promoters, Y Sandipkumar Gupta and Rajdipkumar Gupta.

ICICI Securities, Axis Capital, Edelweiss Financial Services, IDBI Capital Markets & Securities are book running lead managers to the issue.

In other news, as per an article in The Economic Times, Indian companies may mop up Rs 400-500 billion through the IPO route in 2020.

It would be nearly four times higher compared with the Rs 123.6 billion raised by 16 companies in 2019 on the main exchange boards, which was the lowest in five years.

Among the prominent IPOs that may hit in the first half of the new year are SBI Cards & Payment, UTI Asset Management Company, Burger King, Home First Finance, and Computer Age Management Services.

Note that the year 2019 hasn't seen much activity in the IPO market. Since the start of the year, there have been just 16 IPOs on the BSE main board.

Even the ones that hit the primary markets were mostly small to mid-sized IPOs. And no mega IPOs.

Very few companies come out with IPOs during bearish market conditions. So, when the IPO market is sluggish, you must take that as an indicator of market sentiment and liquidity conditions.

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It is interesting to note that despite the tepid market conditions, most of the companies gave positive listing day gains.

In fact, if you had invested in each one of them and held them till now, your gains would have been even better.

The chart below shows the top five performing IPOs of 2019:

Top 5 Winning IPOs of 2019

So, unlike bull markets wherein selling shareholders do their best to squeeze the highest price, bear markets often offer fantastic opportunities to spot great companies and get onboard early on.

Moving on the news from the automobiles sector. Tata Motors announced a decline of 12% in total domestic sales to 44,254 units in December versus 50,440 units in the domestic market in December 2018.

The company's sales in the domestic & international market, for December 2019 also came lower at 46,903 vehicles, compared to 54,439 units during December 2018.

Total MHCVs sales in December including MHCV Truck, Buses and International Business stood at 9,657 units compared to 14,374 units last year.

The company's domestic sales of passenger vehicle also slipped by 10% at 12,785 units in December 2019 as compared to 14,260 units in the same month previous year.

Tata Motors share price opened the day up by 0.8%.

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


December Auto Sales, IPO Buzz, and Top Cues in Focus Today
Pre-Open

On Wednesday, Indian share markets traded on a positive note throughout the day and ended marginally higher.

The BSE Sensex closed higher by 52 points to end the day at 41,306. Power Grid and NTPC were among the top gainers.

While the broader NSE Nifty ended up by 21 points to end at 12,190.

Among BSE sectoral indices, power stocks gained the most, followed by IT stocks and FMCG stocks.

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Top Stocks in Action Today

JSW Steel share price will be in focus today as the company has completed the acquisition of Vardhman Industries (VIL) by infusing Rs 635 million into the debt-ridden company. The acquisition has been done as per the resolution plan approved by the lenders of VIL and the National Company Law Tribunal (NCLT).

Piramal Enterprises share price will also be in focus today as the company has raised funds worth Rs 16 billion through the allotment of 16,000 secured, rated, unlisted redeemable non-convertible debentures (NCDs) each having a face value of Rs 1 million on private placement basis.

Market participants will also track NESCO share price. Reportedly, NESCO has incorporated a Section 8 company as its wholly owned subsidiary namely, 'Nesco Foundation for Innovation and Development'.

The company has been incorporated to carry out CSR and other activities. It is been incorporated with an initial subscription of 10,000 equity shares of Rs 10 each.

December Automobile Sales

Maruti Suzuki has reported total sales of 133,296 units in December 2019, as compared 128,338 units in December 2018, registering rise of 3.9%. This includes 125,735 units in domestic market and 7,561 units of exports.

Mahindra & Mahindra (M&M) has reported auto sales performance for December 2019 which stood at 39,230 vehicles, compared to 39,755 vehicles during December 2018, registering a fall of 1.3%.

The company's domestic sales touched 37,081 vehicles during December 2019, as against 36,690 vehicles in December 2018. Exports for December 2019 stood at 2,149 vehicles.

SML Isuzu has reported 32.1% fall in December 2019 sales. The company sold 549 vehicles in December 2019 against 817 vehicles in December 2018.

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From the Economic Space...

India's current account deficit (CAD) narrowed sharply to 0.9% of GDP in the July-September (Q2) of FY20 from 2.9% in the year ago period and 2% in the preceding quarter.

This contraction in CAD was primarily on account of lower trade deficit.

CAD occurs when the value of goods and services a country imports exceeds the value of exports. A large CAD can cause the domestic currency to depreciate.

In absolute terms, the CAD in the second quarter came down to US$ 6.3 billion from US$ 19 billion in the year ago quarter and US$ 14.2 billion in the preceding (April-June 2019) quarter.

Trade deficit in the quarter was lower too at US$ 38.1 billion as compared with US$ 50 billion a year ago.

In the financial account, net foreign direct investment was US$ 7.4 billion, almost same level as in corresponding Q2 of 2018-19.

Foreign portfolio investment recorded net inflow of US$ 2.5 billion as against an outflow of US$ 1.6 billion in Q2 of 2018-19, on account of net purchases in the debt market.

Net inflow on account of external commercial borrowings to India was US$ 3.2 billion as compared with US$ 2 billion in Q2 of 2018-19.

There was an accretion of US$ 5.1 billion to the foreign exchange reserves as against a depletion of US$ 1.9 billion in Q2 of 2018-19.

IPO Buzz

In latest developments from the IPO space, Mindspace Business Parks REIT on Tuesday filed the draft prospectus for its initial public offering (IPO), making it the second REIT to attempt a listing on the Indian bourses.

In March 2019, Bengaluru-based developer Embassy and Blackstone had launched India's first public REIT, Embassy Office Parks REIT, in a Rs 47.5-billion IPO.

Mindspace Business Parks REIT is backed by real estate developer K. Raheja Corp. and private equity investor Blackstone.

According to the draft prospectus filed by Mindspace, the REIT aims to raise Rs 10 billion through a fresh issue of shares, while the existing shareholders, K. Raheja Corp. and Blackstone, will offload a part of their shareholding through an offer for sale.

The REIT will use the IPO proceeds for partial or full prepayment, or scheduled repayment, of certain debt facilities of the assets held by it.

In other news, Apeejay Surrendra Park Hotels has filed draft papers with Indian stock markets regulator for its proposed IPO to raise up to Rs 10 billion.

The IPO comprises a fresh issue of up to Rs 4 billion and an offer-for-sale (OFS) of up to Rs 6 billion.

The amount to be raised through OFS comprises up to Rs 1.25 billion by promoter selling shareholder, up to Rs 3.54 billion by Apeejay Pvt Ltd, up to Rs 847 million by Apeejay House Pvt Ltd and Rs 349 million by investor selling shareholders.

The group's business is spread across industries such as hospitality, shipping, tea, real estate, retail brands such as Oxford bookstores, and education.

The hospitality company has pioneered the concept of luxury boutique hotel in India under "THE PARK" brand.

It has presence in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR as well as in other major cities such as Coimbatore, Jaipur, Jodhpur, Jammu, Navi Mumbai, Raipur and Visakhapatnam, the DRHP stated.

The net proceeds from the IPO will be utilised towards repayment/prepayment of certain borrowings availed and for general corporate purposes.

We will keep you updated on all the developments from this space. Stay tuned.

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