Sensex Ends 336 Points Lower; Power and FMCG Stocks Witness Selling
Closing

Share markets in India witnessed selling pressure during closing hours and ended their trading session on a negative note. Sectoral indices ended on a negative note with stocks in the power sector and FMCG sector witnessing most of the selling pressure.

At the closing bell, the BSE Sensex stood lower by 336 points (down 0.9%) and the NSE Nifty closed down by 91 points (down 0.8%). The BSE Mid Cap index ended the day down 0.3%, while the BSE Small Cap index ended the day down by 0.2%.

The rupee was trading at 71.32 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up by 0.01% and the Shanghai Composite was up by 0.1%. The Nikkei 225 was down 0.1%.

Speaking of Indian share markets, as can be seen in the chart below, there has been a steady rise in direct participation by Indians in stock markets.

Direct Participation in Stock Markets is Growing Steadily

This increased participation has resulted in not just money flowing into mutual funds, but also in the opening of demat accounts.

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In fact, the attractiveness of Indian equities and the fact that investing in demat accounts is now very easy has led to a steady rise in accounts.

What more, this trend is all set to continue, as the Indian stock markets scale new highs in the coming years.

In the news from the FMCG space, ITC share price was in focus today as the company reported 3.9% year-on-year (YoY) rise in its standalone profit at Rs 32 billion for the December quarter. The company had reported Rs 30 billion profit in December quarter of the previous fiscal.

Net sales for the quarter came in at Rs 114 billion against Rs 99 billion in the corresponding quarter last year.

Other income for the quarter rose to Rs 8.3 billion from Rs 6.4 billion in the year-ago quarter.

Market participants were closely tracking the stock of the company on the back of above development.

From the banking sector, Bank of Maharashtra share price was also in focus today as the lender reported a loss of Rs 37.6 billion for December quarter. The loss was led by Rs 44.2 billion provisions and contingencies it made during the quarter.

The loss was six times higher than Rs 5.9 billion loss the lender had reported in the year-ago quarter.

You can also read our analysis of some recently released Q3FY19 results: Zee Entertainment's latest result analysis, Federal Bank, Infosys, TCS, Trident, HDFC bank, NIIT Technologies, Cyient.

In the news from global financial markets, the Bank of Japan cut its inflation forecasts today and warned of rising risks to the economy from faltering global demand.

As expected, the central bank retained its ultra-easy monetary settings at its policy review.

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


Sensex Trades Flat; Metal & FMCG Stocks Gain
12:30 pm

Share markets in India are presently trading on a flat note. Barring realty sector, IT sector and auto sector, all sectoral indices are trading in green with stocks in the metal sector and FMCG sector witnessing buying interest.

The BSE Sensex is trading up by 15 points (up 0.1%), while the NSE Nifty is trading up by 12 points (up 0.1%). The BSE Mid Cap index is trading up by 0.5% and the BSE Small Cap index is trading up by 0.4%.

The rupee is trading at Rs 71.19 against the US$.

The rupee rose 29 paise to 71.15 against the dollar in early session today on increased selling of the American currency by exporters and banks amid a positive opening of the domestic equity markets.

Besides, the dollar falling against other currencies overseas on lingering worries about a global slowdown and continuing US-China trade tensions supported the Indian rupee.

Market participants are tracking ITC, InterGlobe aviation, Bharti Infratel, Vijaya bank as they announce their December ended quarter results today.

You can also read our recently released Q3FY19 results: Zee Entertainment's latest result analysis, Reliance Industries, Federal Bank, Infosys, TCS, Trident, HDFC bank, NIIT Technologies, Cyient.

In the news from the software sector, Wipro share price is witnessing buying interest today.

The company last Friday reported a 31.8% YoY rise in profit at Rs 25.4 billion for the quarter ended December 31.

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Wipro reported 2.4% quarter-on-quarter rise in revenue in constant currency terms led by strong growth in BFSI and consumer business unit.

In rupee terms revenue was up 3.5% at Rs 146.6 billion.

The board of the company also recommended issuing equity shares in the proportion of 1:3, which is one bonus equity share of Rs 2 each for every three fully paid-up equity shares held.

Shares of the company climbed 2% to Rs 353.25, which is their highest level since February 2000.

In the past seven trading days, Wipro has outperformed the market by surging 12%. In comparison, the BSE Sensex was up 1.6% during the same period.

To know more about the company, you can read Wipro Q3FY19 Result Analysis and Wipro Annual Report Analysis on our website.

Moving on to the news from the banking space, Yes bank share price is in focus today.

Shares of the private sector lender climbed 2% in early trade today after the bank partnered with Government of Maharashtra to onboard PDS shops onto the electronic PDS initiative through which they can become agents of the bank.

Under the partnership, Yes bank will empower more than 20,000 ration shops which can offer last mile basic banking services to more than seven lakh beneficiaries.

The bank will cover almost 40% of all the PDS shops across locations like Palghar, Thane, Kolhapur, Latur, Pune and others.

Yes bank share price is presently trading up by 2.5%,

Speaking of updated facts about banks, are you aware of the extent to which bank credit growth has recovered, in recent months?

Credit Growth Back to 5 Year High

The credit growth that banks in India posted in December quarter of 2018, at 15.1% YoY, is not just very healthy. It's nearly 2 times GDP growth. But it also back to the five-year high.

Strong credit disbursal is clearly a sign of many things to come. Higher consumption demand, better capacity utilization, more capex and higher profits.

So even as we await a sharper earnings recovery, the first signs of it are already evident.

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


Sensex Opens Flat; Telecom & Realty Stocks Gain
09:30 am

Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite and the Nikkei 225 are trading flat while the Hang Seng is up 0.2%. US stocks ended lower on Tuesday, snapping a four-session rally, as a gloomy global economic growth outlook, trade concerns and disappointing company forecasts dampened sentiment.

Back home, India share markets opened on a flat note. The BSE Sensex is trading up by 16 points while the NSE Nifty is trading up by 8 points. The BSE Mid Cap index opened up by 0.2% while BSE Small Cap index opened up by 0.1%.

All sectoral indices have opened the day in green with telecom stocks and realty stocks witnessing maximum buying interest.

The rupee is currently trading at Rs 71.14 against the US$.

Insurance stocks opened the day on a mixed note with HDFC Standard Life Insurance & ICICI Lombard General Insurance leading the gainers. As per the Moody's Investors Service, India's insurance and reinsurance sectors will grow strongly driven by strong economic growth and evolving regulatory regime.

It said robust GDP expansion, coupled with current low insurance penetration, should support double digit growth for the non-life sector over the next 3-4 years.

During fiscal 2018, total gross premiums for the non-life and life insurance sectors grew 11.5% to Rs 6.1 trillion (US$ 94 billion), bringing the 5-year compound annual growth rate (CAGR) to 11%.

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Moody's said it expects India's real GDP to expand by 7.4% and 7.3% in fiscal 2019 and 2020, making the Indian economy one of the world's fastest-growing.

Liberalisation of the reinsurance sector with the admission of foreign reinsurers since 2017 and IRDAI's steps to ensure that they can compete with incumbents will specifically benefit the non-life sector.

Further, regulatory reforms will also improve the sector's capital strength, Moody's stated.

Note that, in 2015, IRDAI raised the ceiling on foreign ownership of Indian insurers to 49% from 26%, encouraging global players to buy holdings in local entities.

Besides, the government's launch of a new program in 2018 to provide health insurance for 100 million families is credit positive as it will help grow health premiums and provide insurers with cross-selling opportunities, it noted.

Now speaking of GDP growth, have a look at the latest data projecting the nominal GDP of countries by the year 2030.

India in the Pecking Order of Strongest Economies in Another Decade

As you can see in the chart, China would be by far the strongest economy in another decade. In fact, its GDP could be more than double of America's.

But that India will be a close second.

With GDP crossing 40 trillion dollars, the Indian economy will be at least a third bigger than the US.

No doubt the 40 trillion-dollar GDP will not come without some hiccups.

But once you know the stocks that could gain the most in the coming decade, you too be saying - 'Buy Indian. I am'.

In another development, the Reserve Bank announced a Rs 100-billion bond buyback on Thursday, continuing with its commitment to provide adequate liquidity.

The central bank had earlier committed to purchase government securities under its open market operations for an aggregate Rs 500 billion in January and has so far done Rs 300 billion.

The latest OMO to be conducted Thursday has been decided based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the Reserve Bank stated.

The RBI will buyback five securities maturing between June 2019 and December 2033 through the purchase.

It can be noted that ever since August, the system is passing through a liquidity deficit which is being bridged by the central bank using various tools with OMOs being a primary instrument deployed.

OMOs are the tools which can be used to either inject or drain liquidity from the system.

It is employed to adjust rupee liquidity conditions in the market on a durable basis.

If there is excess liquidity, RBI resorts to sale of government securities and sucks out the rupee liquidity. Similarly, when the liquidity conditions are tight, it buys securities from the market, thereby releasing money into the market.

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


Key Q3FY19 Results, Xelpmoc Design IPO, and Top Stocks in Action Today
Pre-Open

On Tuesday, share markets in India traded on a negative note throughout the day and ended marginally lower after a volatile day of trading.

The BSE Sensex closed lower by 134 points to end the day at 36,445. Vedanta and Tata Steel were among the top losers.

While the broader NSE Nifty ended down by 39 points to end at 10,923.

Among BSE sectoral indices, metal stocks fell the most by 2.3%, followed by telecom stocks and auto stocks.

Top Stocks in Focus Today

Zensar Technologies along with Zensar Information Technologies and Zensar Software Technologies (being wholly owned subsidiaries of the company) has entered into definitive agreements for sale of 100% of the share capital of these wholly owned subsidiaries to Lorhan IT Services, having its registered office at Hyderabad, India.

Alembic pharma share price will be in focus today as the company has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Desvenlafaxine Extended-Release Tablets, 25 mg.

The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), PRISTIQ Extended-Release Tablets, 25 mg of Wyeth Pharma. Desvenlafaxine Extended-Release Tablets, 25 mg are indicated for the treatment of major depressive disorder (MDD).

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If you have not downloaded it yet…We urge you to do it right now.

We believe it has the incredible potential to dramatically change your life…forever.

Here's an additional benefit…

As soon as you download it, We will also automatically block a FREE seat for you at the Rebirth of India MEGA SUMMIT.

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InterGlobe Aviation share price will also be in focus today as the airline reported the Passenger Load Factor (PLF) of 88.9% during the month of December 2018. The company had reported PLF of 84.9% during November 2018.

The PLF is a key indicator of the company's performance, as it measures the average % of seats filled on airline's aircraft fleet.

Market participants will track UFO Movies share price.

NCLT dismissed the petition for the approval of scheme of amalgamation, filed jointly by the company and PJSA before the NCLT for the approval of the scheme.

Results Corner

Reliance Nippon has reported a fall of 13.7% in its net profit at Rs 1.1 billion for the quarter under review as compared to Rs 1.27 billion for the same quarter in the previous year.

TVS Motor has reported 15.6% rise in its net profit at Rs 1.8 billion for the quarter ended December 31, 2018 as compared to Rs 1.54 billion for the same quarter in the previous year.

Shree Cement has reported its net profit for December quarter at Rs 3 billion against Rs 3.3 billion for the same quarter, last year. The revenues rose 21% at Rs 27.8 billion against Rs 23 billion last year.

Wipro on Friday posted a strong 31.8% YoY jump in its consolidated net profit at 25.4 billion and announced a 1:3 bonus share offer.

To know more about the company, you can read Wipro Q3FY19 Result Analysis and Wipro Annual Report Analysis on our website.

You can also read our recently released Q3FY19 results: Zee Entertainment's latest result analysis, Reliance Industries, Federal Bank, Infosys, TCS, Trident, HDFC bank, NIIT Technologies, Cyient.

From the IPO Space...

In the latest developments from the IPO space, Xelpmoc Design and Tech will be launching its initial public offering (IPO) today and will close on January 25, 2019, with a price band of Rs 62 - Rs 66 per equity share of face value of Rs 10 each.

The company provides professional and technical consulting services, offering technology services and end-to-end technology solutions and support.

Its clients range from entrepreneurs and start-up enterprises to established companies, engaged in e-commerce, transportation and logistics, recruitment, financial services, social networking, and various other industries.

The Company proposes to utilize the net proceeds of the issue for the purchase of IT hardware and network equipment's for development centers in Kolkata and Hyderabad, purchase of fit outs for new development centers in Kolkata and Hyderabad, funding the working capital requirements of the company, and general corporate purposes.

In 2018, the markets regulator approved 71 IPO proposals as compared to 46 in 2017.

Speaking of IPO's, according to an article in The Economic Times, Indian stock exchanges ranked second globally in terms of IPOs, raising US$ 5.52 billion from 161 offerings till November this year. The US ranked first, raising US$ 60 billion from 261 IPOs.

Here's an excerpt from the article:

  • According to the report, the drop in IPOs could be attributed to reasons such as significant corrections in the stock markets in mid-cap and small-cap stocks.

    Further, the amount of volatility has increased due to uncertainties around global growth compounded by the ongoing US-China trade wars.

    In addition, there are a number of macroeconomic factors which are contributing uncertainties such as liquidity crises among non-bank lenders in India triggered by defaults done by a leading infrastructure finance company IL&FS and currency volatility (depreciation of the rupee), the report added.

With so many IPOs set to hit the markets, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

To know how to safely profit from the ongoing IPO rush, download this FREE report now and discover How to Get Rich with IPOs.