Sensex Ends at Record High; Tata Motors and Adani Ports Among Top Nifty Gainers
Closing

Indian share markets extended gains to the second day today and ended at record-high levels with Nifty ending above 14,600-mark.

At the closing bell, the BSE Sensex stood higher by 393 points (up 0.8%).

The NSE Nifty closed higher by 123 points (up 0.9%).

Tata Motors and Adani Ports & SEZ were among the top gainers today.

The SGX Nifty was trading at 14,635, up by 78 points, at the time of writing.

The BSE Mid Cap index ended up by 1.1%. The BSE Small Cap index ended higher by 0.6%.

{inlineads1}

On the sectoral front, gains were largely seen in the auto sector, IT sector and energy sector.

Asian stock markets ended mixed today. As of the most recent closing prices, the Hang Seng ended up by 1.1% and the Shanghai Composite ended up 0.5%. The Nikkei ended lower by 0.4%.

US stock futures are trading higher today indicating a positive opening for Wall Street indices with Dow Futures trading up by 62 points (up 0.2%).

The rupee is trading at 73.01 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.3% at Rs 49,149 per 10 grams.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

{inlineads2}

Speaking of the current stock market scenario, in her latest video, co-head of Research at Equitymaster, Tanushree Banerjee lays down the steps that could help you reset your portfolio for a profitable 2021.

This is first time in 25 years that a benchmark index in India, the BSE Sensex, is trading at a P/E multiple of 40x. The last time the Sensex breached this multiple in October 1994.

Most investors are worried about parking money in safe stocks or safe asset classes. But are they making the right choices?

Tune in to the video to find out more:

Also speaking of the current stock market scenario, note that since the lows in March 2020, the smallcap index has gained more than 100%.

While caution is indeed warranted, Richa Agrawal, Research Analyst at Equitymaster, thinks there is still a lot more steam left to this smallcap rally.

Despite rallying more than 100% since the March 2020 lows, Richa believes small-cap stocks are set for a massive up move in 2021 and beyond.

{inlineads3}

Here's what she wrote in a recent edition of Profit Hunter...

  • The P/E for smallcap index doesn't make sense. There are thousands of listed small companies. Some have negative earnings. The base is not a valid data to work with.

    That said, the closest proxy to relative valuations is the Smallcap to Sensex ratio,

    Historically, this ratio has averaged 0.43x. In the previous mega runs of the smallcap index, this ratio has gone as high as 0.75x.

    In January 2018, when smallcaps peaked, the ratio was at 0.58x.

    Guess where this ratio is now after a 100% run up in the smallcap index?

    0.38.

    It's lower than the median over 2 decades.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

Moving on to stock specific news...

DCM Shriram was among the top buzzing stocks today.

DCM Shriram reported a 45% year-on-year (YoY) increase in its consolidated net profit at Rs 2.5 billion for the quarter ended December and announced a Rs 10 billion investment to grow its chemical business.

Total income stood at Rs 21.7 billion in the third quarter of this financial year (Q3FY21) as against Rs 22.2 billion in the corresponding period of the previous year.

The board declared an interim dividend of 275%, which is Rs 5.50 per equity share of the face value of Rs 2 each for the financial year 2020-21.

The company has approved an investment of Rs 10 billion in chemical business for various projects at the existing site of Bharuch (Gujarat) plant. It will set up a plant to produce Epichlorohydrin (ECH) with a capacity of 51,000 tonnes per annum, along with a glycerine purification facility. It will also produce hydrogen peroxide (H2O2) at a capacity of 52,500 tonnes per annum.

A multipurpose product research and development centre will be set up and the capacity of anhydrous aluminium chloride will be expanded.

The company said that the R&D centre is being set up to enable forward integration of existing products and new products i.e. ECH and H2O2. This will also set up the base of the company for other value-added chemicals going forward. Regarding anhydrous aluminum chloride, the objective of expansion is to meet growing demand and derive economies of scale.

How these developments pan out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Market participants were also tracking Hindustan Zinc share price today as the company reported 36% YoY increase in net profit at Rs 22 billion for the quarter ending 31 December, 2020.

In news from the IPO space...

The initial public offering (IPO) of Indian Railway Finance Corporation (IRFC) was oversubscribed on the third and final day of bidding i.e. today.

By noon hours today, the issue received bids for 1,938 million shares, which was 1.55 times the issue size of 1,247 shares.

The company has already raised Rs 13.9 billion from 31 anchor investors.

The price range for the offer has been fixed at Rs 25-26 per share.

To know more, you can read our IPO note on IRFC here: Indian Railway Finance Corporation IPO: Should You Apply? (requires subscription).

In other news, the IPO of Indigo Paints, the fifth largest decorative paints company in India, was oversubscribed on its first day of bidding today.

The issue of the company was subscribed 1.3 times on its first day of the bidding during noon hours today.

The public issue received bids for 73.51 lakh equity shares against offer size of 55.18 lakh shares (excluding anchor book).

The anchor book witnessed good response from investors, including global investors and domestic asset management companies.

The retail investors' reserved portion saw a subscription of 2.3 times and that of non-institutional investors 80%, while employee portion received 10% subscription and that of qualified institutional buyers 10% during market hours today.

The company aims to raise Rs 11.7 billion through its public issue, of which it has already garnered Rs 3.4 billion from anchor investors.

The price band has been fixed at Rs 1,488-1,490 per share for the initial share sale.

At the upper end of the price band, the public issue is expected to fetch Rs 11.7 billion, which comprises Rs 3 billion through fresh issuance of shares and Rs 8.7 billion through offer for sale (OFS).

Half of the issue is reserved for qualified institutional buyers, 35% for retail investors, 15% for non-institutional bidders and there is a reservation of up to 70,000 equity shares for subscription for employees, who will get a discount of Rs 148 per equity share to the offer price.

How the above IPO sails through remains to be seen. Stay tuned for all the updates from this space.

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


Sensex Trades Marginally Higher; Dow Futures Up by 6 Points
12:30 pm

Share markets in India are presently trading marginally higher.

The BSE Sensex is trading up by 140 points, up 0.3% at 49,538 levels.

Meanwhile, the NSE Nifty is trading up by 80 points.

Tata Motors and Wipro are among the top gainers today. Grasim and NTPC are among the top losers today.

The BSE Mid Cap index is trading up by 0.8%.

The BSE Small Cap index is trading up by 0.7%.

{inlineads1}

On the sectoral front, stocks from the automobile sector, are witnessing most of the buying interest.

On the other hand, stocks from the power sector, are witnessing most of the selling pressure.

US stock futures are trading higher today, indicating a positive opening for Wall Street.

Nasdaq Futures are trading up by 75 points (up 0.6%) while Dow Futures are trading up by 6 points (flat)

The rupee is trading at 73.12 against the US$.

Gold prices are trading up by 0.5% at Rs 49,235 per 10 grams.

{inlineads2}

In global markets, gold prices moved higher following a weaker US dollar amid expectations of a massive US stimulus.

Tracking higher global prices, gold prices edged higher in Indian markets. On MCX, February gold futures rose 0.3% to Rs 49,115 per 10 grams. In the previous session, gold had risen 0.2%.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

The recent price volatility in the bullion market has rattled many traders. Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold?

{inlineads3}

Speaking of stock markets, India's #1 trader, Vijay Bhambwani, talks about why he thinks Paytm could usher in a revolution in the Indian stock market, in one of his latest videos for Fast Profits Daily.

Three months ago, Vijay had recorded a video about how we trade is about to change forever where he was referring to the Robin Hood app. The app had caused quite a disruption in the US stock market and continues to do so.

However, a similar kind of disruption in the Indian market could be happening as you read this. Paytm announced a few days ago that they would offer futures and options trading through their mobile app.

So, how big a disruption could this be and what does it mean for you?

Tune in here to find out more:

Moving on to stock specific news...

Among the buzzing stocks today is Ceat.

Tyre major, Ceat on January 19 reported over a two-and-a-half-fold jump in its consolidated net profit to Rs 1.3 billion in the third quarter ended on December 31, 2020, riding on robust sales. The company had posted a consolidated net profit of Rs 525 million in the year-ago period.

The company's consolidated revenue from operations stood at Rs 22.2 billion in the quarter under review as against Rs 17.6 billion in the year-ago period, a growth of 26%, it added.

Commenting on the company's performance, Ceat's Managing Director Anant Goenka said, "This quarter's growth has been achieved on the back of new capacities across segments, particularly passenger car, two-wheeler and farm segments."

The replacement market has been buoyant because of consumer preference in personal mobility and strong rural demand, he added.

Goenka further said, "All our factories are currently operating at a high capacity and we are confident in maintaining strong growth levels over the next few months. There is expected to be some margin pressure in the next quarter due to increasing raw material prices."

During the quarter, the company's continuous effort to judiciously manage cash helped in bringing down debt by Rs 2.6 billion and helped in qualitative improvement in the leverage ratios and the company's balance sheet.

At the time of writing, Ceat share price was trading up by 3.8% on the BSE.

Moving on to news from the finance sector...

IIFL Home Finance Ties Up with Standard Chartered Bank for Co-Lending

Fairfax-backed IIFL Finance on January 19 said its home loan subsidiary IIFL Home Finance and Standard Chartered Bank have entered into a co-lending arrangement for extending credit to micro, small and medium enterprise (MSME) loans (loan against property).

Under this partnership, IIFL Home Finance and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing.

This is one of the first co-lending arrangements in the industry after Reserve Bank India's (RBI) co-lending guidelines were issued.On November 5, 2020, RBI had announced the co-lending scheme for banks and non-banking finance companies (NBFCs) for the priority sector. Under the model, banks are permitted to co-lend with all registered NBFCs (including housing finance companies) based on a prior agreement. NBFCs shall be required to retain a minimum of 20% share of the individual loans on their books.

IIFL Finance is one of India's leading retail-oriented NBFC with about 90% of its Rs 410 billion loan book under the retail category.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

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


Sensex Opens Higher; Metal and IT Stocks Lead
09:30 am

Asian share markets are trading on a mixed note today. The Nikkei is trading lower by 0.5% and the Hang Seng is trading up by 0.2%.

In US, Wall Street's main indexes rose on Tuesday as US treasury secretary nominee Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world's largest economy ride out a pandemic-driven slump.

The Dow Jones Industrial Average rose 116 points, or 0.4% while the Nasdaq Composite added 199 points, or 1.5%.

Back home, Indian share markets have opened on a positive note.

A total of 36 companies including Bajaj Finance, Bajaj Finserv, HDFC Asset Management Company, and Havells India are set to announce their quarterly results today.

{inlineads1}

The BSE Sensex is trading up by 179 points. Meanwhile, the NSE Nifty is trading higher by 56 points.

Tech Mahindra is among the top gainers today. Power Grid, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.5%. The BSE Small Cap index is trading higher by 0.6%.

Sectoral indices are trading on a mixed note with stocks in the metal sector and IT sector witnessing buying interest. Telecom stocks are trading in red.

Shares of Radico Khaitan and IDFC First Bank hit their 52-week highs today.

The rupee is trading at 73.13 against the US$.

Gold prices are trading up by 0.3% at Rs 49,119 per 10 grams.

{inlineads2}

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Speaking of the current stock market scenario, in her latest video, Co-head of Research at Equitymaster, Tanushree Banerjee lays down the steps that could help you reset your portfolio for a profitable 2021.

This is first time in 25 years that a benchmark index in India, the BSE Sensex, is trading at a P/E multiple of 40x. The last time the Sensex breached this multiple in October 1994.

Most investors are worried about parking money in safe stocks or safe asset classes. But are they making the right choices?

Tune in to the video to find out more:

In news from the IPO space, the initial public offer of Indian Railway Finance Corporation (IRFC) was subscribed 1.22 times on the second day of subscription on Tuesday.

The IPO received bids for 1,526 million equity shares against offer size of over 1,248 million equity shares (excluding anchor book portion), the subscription data available on the exchanges showed.

{inlineads3}

The category reserved for non-institutional investors was subscribed 24% and retail individual investors (RIIs) 2.33 times.

Price range for the offer has been fixed at Rs 25-26 per share.

To know more, you can read our IPO note on IRFC here: Indian Railway Finance Corporation IPO: Should You Apply? (requires subscription).

In other news, the IPO of Indigo Paints will open for public subscription today. The price band has been fixed at Rs 1,488-1,490 per share for the initial share sale.

At the upper end of the price band, the public issue is expected to fetch Rs 11.7 billion, which comprises Rs 3 billion through fresh issuance of shares and Rs 8.7 billion through offer for sale (OFS).

Half of the issue is reserved for qualified institutional buyers, 35% for retail investors, 15% for non-institutional bidders and there is a reservation of up to 70,000 equity shares for subscription for employees, who will get a discount of Rs 148 per equity share to the offer price.

How the above IPOs sail through remains to be seen.

In news from the banking sector, HDFC Bank has submitted a plan to the Reserve Bank of India (RBI) outlining remedies for repeated glitches in the bank's technology platform over the past three years.

People aware of the matter said that the lender is awaiting a response from the regulator on when restrictions imposed in December on new card acquisition will be lifted.

The bank is working on multiple immediate and long-term solutions as part of its internal review. "The action plan that the bank is working on could take anywhere between 10-12 weeks to implement," said one of the persons. "From there on, it's up to the regulator to inspect the progress and take a call on lifting sanctions."

HDFC Bank, which issues nearly 150,000 credit cards a month, was directed by the regulator to stop doing so on December 12 until it had sorted out the problems. The bank also couldn't launch any new digital initiatives.

CEO Sashidhar Jagdishan had apologised to customers for the disruptions and asked them to continue transacting with the bank.

The RBI's move was a blow to the bank's ambition to expand its digital payments business, where it commands a 40% market share. HDFC Bank is a systemically important lender with a 10% share of the loans market and 26% of the credit card business.

The bank grew its credit card business by 32% sequentially in the December quarter.

HDFC Bank share price has opened the day down by 0.5%.

Note that, HDFC Bank is one that has always adapted to changing times.

HDFC Bank wanted to transform itself from a leader in the physical banking to a leader in online banking. Since then, HDFC Bank has constantly focused on going digital.

In 2004, only 10% of customer transactions were initiated through internet and mobile. The number has gone up to 92% in 2019.

HDFC Bank's Digital Transformation

It is a great example of a company which has taken advantage of its scale and embraced disruption rather than fear it.

These are traits that one should look for in picking stocks. They not only withstand the disruption but also gain from it in the long-run.

Moving on to news from pharma sector, drug firm Alembic Pharma on Tuesday reported a 24.9% rise in its consolidated net profit to Rs 2.92 billion for the December quarter mainly on account of robust sales.

The company had posted a net profit of Rs 2.34 billion for the corresponding period of the previous financial year.

Revenue from operations stood at Rs 13.1 billion for the quarter under review.

"It was another good quarter for the company led by strong growth in the India formulation business. The API Business continued to perform well in the current quarter," Alembic Pharma Managing Director Pranav Amin said.

Alembic Pharma share price has opened the day down by 0.9%.

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


SGX Nifty Trades Lower, Top 6 Factors Behind the Stock Market Rally, L&T Finance Holdings Rights Issue, and Buzzing Stocks Today
Pre-Open

Indian share markets rallied nearly 2% yesterday, boosted by realty and finance stocks.

Benchmark indices registered sharp gains yesterday after a massive selloff in the past two days as the incoming US administration pushed for a big stimulus.

At the closing bell yesterday, the BSE Sensex stood higher by 834 points (up 1.7%). In intraday trade, the Sensex zoomed 936 points to 49,500 levels.

The NSE Nifty closed higher by 240 points (up 1.7%).

Bajaj Finserv and Bajaj Finance were among the top gainers.

The BSE Mid Cap index ended up by 2.3%. The BSE Small Cap index ended higher by 1.7%.

On the sectoral front, gains were largely seen in the finance sector, realty sector and metal sector.

At 8:00 am today, the SGX Nifty was trading down by 46 points, or 0.32% lower at 14,500 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading up by 0.2% at Rs 48,990 per 10 grams at the time of closing stock market hours yesterday.

{inlineads1}

Top 6 Factors Why Sensex Surged Over 1.5% Yesterday

Firm Global Cues: Asian stock markets rose yesterday after data showed China's economy was one of the few to grow in the year 2020. China's economy grew 2.3% in 2020 while the United States, Europe and Japan struggled in the wake of the coronavirus pandemic.

Europe Backs Money Printing: Eurozone finance ministers pledged continued fiscal support for their economies and discussed the design of post-pandemic recovery plans as the European Commission warned the Covid-19 crisis was making the bloc's economic imbalances worse.

Sustained Capital Inflows: As per data available with NSDL, foreign portfolio investors (FPIs) have pumped in over Rs 130 billion in the Indian share markets in January so far. FPIs invested a net Rs 174.4 billion into equities but pulled out Rs 25.9 billion from the debt segment between January 1-18.

December Quarter Earnings: Indian companies have reported decent December quarter earnings so far and the same has fuelled optimism in the stock markets.

Budget 2021: Finance Minister Nirmala Sitharaman has said that the Budget will see a massive public sector investment and expenditure push, including on infrastructure projects and the healthcare sector.

Rising Crude Oil Prices: Crude oil prices climbed yesterday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed Covid-19 pandemic lockdowns globally could cool fuel consumption.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

{inlineads2}

Speaking of the current stock market scenario, in her latest video, Co-head of Research at Equitymaster, Tanushree Banerjee lays down the steps that could help you reset your portfolio for a profitable 2021.

This is first time in 25 years that a benchmark index in India, the BSE Sensex, is trading at a P/E multiple of 40x. The last time the Sensex breached this multiple in October 1994.

Most investors are worried about parking money in safe stocks or safe asset classes. But are they making the right choices?

Tune in to the video to find out more:

Top Stocks in Focus Today

Mindtree will be among the top buzzing stocks today.

Mindtree reported a 65.7% rise in consolidated net profit to Rs 3.3 billion for the December 2020 quarter. The company had posted a net profit of Rs 1.97 billion in the corresponding period last year.

On a sequential basis, the company clocked 28.7% growth, backed by growth across verticals and robust margin expansion with a strong order book.

{inlineads3}

The Bengaluru-based company saw its revenue grow 3% to Rs 20.2 billion in the quarter under review from Rs 19.7 billion in the year-ago period.

At the end of the December 2020 quarter, the company's active client base stood at 276, and eight new clients were added during the quarter, the company said in a filing.

To know more, you can read Equitymaster's Mindtree's Q3FY21 result analysis.

Adani Green Energy share price will also be in focus today as the company on January 18 said that French energy giant Total SA will acquire 20% minority interest in the company from Adani Group. The deal, valued at around US$ 2 billion, will also provide Total a seat on the board of directors of AGEL.

The transaction follows Total investing US$ 510 million in April 2020 for the acquisition of 50% stake in AGEL's 2,353 megawatt (MW) operational solar project in the country.

The acquisition is part of Total's target of building a portfolio of 35,000 MW of renewable energy capacity globally by 2025.

Market participants will track realty sector stocks today. Shares of real estate companies witnessed buying interest yesterday with the Nifty Realty index surging nearly 5% after Indiabulls Real Estate said it is seeing high demand for completed products, and continues to expect robust collections for the rest of the financial year.

In an investor presentation, the Mumbai-based real estate developer said the affordability of real estate is at a multi-year high with declining interest rates.

Among individual stocks, DLF hit a 52-week high of Rs 299.45 yesterday after rallying 7% in intra-day trade. Shares of Godrej Properties, Prestige Estate Projects, Sobha, Oberoi Realty and Brigade Enterprises ended up in the range of 4-8% yesterday.

L&T Finance Holdings Rights Issue: Offer Opens on 1st February

In news from the finance sector, L&T Finance Holdings said its board has approved raising of up to Rs 30 billion through a rights issue.

The offer will open on 1 February and close on 15 February.

A rights issue is a fundraising tool to mobilize capital from existing shareholders of a company. Shares are generally offered at a discount to prevailing market price in a rights issue.

The lender has fixed a price of Rs 65 per equity share for the offer and an entitlement ratio at 17:74 (17 equity shares for every 74 shares held by the eligible equity shareholders of the company), as on the record date.

Note that banks and non-banking financial companies (NBFCs) have been raising funds to build capital buffers.

Mahindra & Mahindra Finance and Shriram Transport Finance have raised Rs 30.9 billion and Rs 15 billion through their respective rights issues.

Last week, L&T Finance Holdings reported a 51% decline in consolidated net profit at Rs 2.9 billion for the third quarter ended December 31, 2020, against Rs 5.9 billion in the corresponding period last year.

The company posted highest quarterly disbursements since Q1FY20, up by 51% QoQ.

Recently, a working committee set up by the Reserve Bank of India (RBI) released new proposals to review the ownership and corporate structure of private sector banks. The committee also suggested the conversion of large NBFCs into banks.

As per reports, the proposals are favourable to large NBFCs promoted by corporate houses like L&T Finance along with the likes of Bajaj Finance, Mahindra Finance, Aditya Birla Capital and others who may now look forward to converting to a universal bank.

How the above developments pan out remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

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