Sensex Ends 231 Points Higher; Capital Goods and FMCG Stocks Witness Buying
Closing

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Indian share markets continued their momentum during closing hours and ended their trading session on a positive note.

At the closing bell, the BSE Sensex stood higher by 231 points (up 0.6%) and the NSE Nifty closed higher by 73 points (up 0.6%).

The BSE Mid Cap index ended up by 0.5% and the BSE Small Cap index ended the day up by 0.1%.

On the sectoral front, gains were seen in the FMCG sector, metal sector and capital goods sector.

Asian stock markets finished on a mixed note as of the most recent closing prices. The Hang Seng stood down by 2.82% and the Nikkei was trading up by 0.71%, while the Shanghai Composite was trading down by 2.75%.

European markets were trading on a positive note. The FTSE 100 was up by 0.10%. The DAX was trading flat, while the CAC 40 was trading up by 0.30%.

The rupee was trading at 71.23 to the US$ at the time of writing.

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Speaking of Indian share markets, the chart below shows the monthly trend in SIP inflows.

SIPs on the rise

As can be seen, in the month of December 2019, SIP inflows into mutual funds hit an all-time high of Rs 8,518 crore.

Here's what Ankit Shah wrote about this in today's edition of The 5 Minute WrapUp...

  • AMFI data shows that mutual funds added, on average, 9.55 lakh SIP accounts each month during FY2019-20, with an average SIP size of about Rs 2,850 per SIP account.
  • From April to December 2019, there were a total of 85.99 lakh new SIP registrations. Indian mutual funds have currently about 2.98 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes.
  • Total SIP AUM (assets under management) has been growing steadily. As on December 2019, the total SIP AUM stood at Rs 3.17 lakh crore.

The big picture Ankit is trying to show is clear.

A lot of money is continuously pouring into the stock markets despite all the bad news about the economy.

In fact, Ankit has also been recommending his Insider subscribers to buy stocks that take advantage of this megatrend (requires subscription).

In news from the finance sector, Bajaj Finance share price was in focus today as the company reported a 52% year-on-year (YoY) jump in consolidated net profit for the third quarter ended December 31.

The growth here was driven by strong growth in net interest income and loan growth.

On a consolidated basis, the company reported profit of Rs 16.1 billion in Q3FY20.

New loans booked during the quarter increased by 13% YoY.

Customer franchise increased by 24% YoY to 40.38 million as of 31 December 2019 from 32.57 million as of 31 December 2018.

Assets under management (AUM) of Bajaj Finance grew by 35% YoY to Rs 1,450.9 billion as of 31 December 2019.

Net interest income for Q3FY20 was up by 42% YoY at Rs 45.4 billion.

During the quarter, Bajaj Finance made an accelerated provision of Rs 850 million in its loan against securities portfolio. Adjusted for this, loan losses and provisions (expected credit loss) for Q3FY20 was Rs 7.46 billion.

Gross NPA and Net NPA stood at 1.61% and 0.70% respectively, while the provisioning coverage ratio stood at 57%.

The consolidated results of Bajaj Finance include the results of its wholly owned subsidiaries viz. Bajaj Housing Finance Limited (BHFL) and Bajaj Financial Securities Limited (BFinsec).

Moving on to the news from commodity markets, gold was witnessing selling pressure today. Losses for the yellow metal were seen as market participants took stock of the economic impact of the new coronavirus and awaited the US Federal Reserve's interest rate decision.

Market participants are looking forward to the US Federal Reserve's policy decision due later in the day. The death toll from the coronavirus outbreak in China rose to 132, while the number of confirmed cases rose to 5,974.

Gold prices also witnessed selling yesterday after strength in the dollar index and upbeat US Richmond manufacturing index and consumer confidence data.

How the policy decision of the Federal Reserve pans out and what impact it has on gold prices remains to be seen. We will keep you updated on all the developments from this space.

Speaking of gold, Vijay Bhambwani talks about how gold has been relied upon by humankind for 3000 years in one of his videos.

If you consider street inflation, your fixed deposits are giving negative yields. In times like these, Vijay considers gold as a safe haven.

So, is it the time to buy gold?

Tune in to find out...

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


Sensex Trades Firm; ITC and Tata Steel Top Gainers
12:30 pm

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Stock markets in India are presently trading higher. The BSE Sensex is trading up by 322 points and the NSE Nifty is trading up by 100 points. The BSE Mid Cap index and the BSE Small Cap index are trading up by 0.8% and 0.4% respectively.

Among the sectoral indices, consumer durables stocks are witnessing selling pressure. Metal stocks and capital goods stocks are trading in green.

In the news from currencies space. The Indian rupee is holding on the morning gains and trading higher by 12 paise at 71.21 per dollar, with buying seen in the domestic equity market.

It opened higher by 10 paise at 71.23 per dollar against previous close 71.33.

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On Tuesday, the rupee gained 10 paise to end at 71.33 against the US dollar as crude prices eased following concerns that oil demand will be hit amid rapid spread of coronavirus from China to other countries.

Speaking of currencies, Vijay Bhambwani, editor of Weekly Cash Alerts, tells you the main reasons why not to trade commodities and currencies the same way you would trade equities. Here's an excerpt of what he wrote...

  • Currencies are traded in pairs and the most liquid is the USDINR. Currencies are traded in four decimal points just as bonds are. The international derivative trader's association has indicated that forex may be traded in 6 decimals in the coming few years.

    It takes months sometimes for the currency pair to pass the next round figure, say from 70 to 71.

    Can you really trade commodities and currencies alike or for that matter, equities and currencies alike? Definitely not!

To know more, you can read Vijay's entire article here: Is Trading in Equities, Commodities, and Currencies the Same?

In the news from the pharma sector. As per an article in a leading financial daily, Alembic Pharma's joint venture (JV) Aleor Dermaceuticals (Aleor) has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Clobetasol Propionate Cream USP, 0.05%.

The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), Temovate Cream, 0.05%, of Fougera Pharmaceuticals Inc. (Fougera).

The drug is indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses.

It has an estimated market size of US$57 million for twelve months ending September 2019 according to IQVIA. Alembic has a cumulative total of 118 ANDA approvals (106 final approvals and 12 tentative approvals) from USFDA.

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Meanwhile, the company received final approvals from the USFDA for its Abbreviated New Drug Applications (ANDAs) Azithromycin Tablets USP, 250 mg and 500 mg.

The approved ANDAs are therapeutically equivalent to the reference listed drug products (RLDs), Zithromax Tablets, 250 mg and 500 mg, of Pfizer, Inc. (Pfizer).

The tablets have an estimated market size of US$129 million for twelve months ending September 2019 according to IQVIA.

At the time of writing, Alembic pharma was trading up by 0.2%.

In another development, Dr. Reddy's Laboratories informed that the audit of its API manufacturing plant at Srikakulam, Andhra Pradesh (CTO VI), by the US FDA, has been completed on 28 January 2020.

The company has been issued a Form 483 with 5 observations.

It will address them comprehensively within the stipulated timeline.

Dr. Reddy's share price is trading down by 0.1%.

Here's an interesting data on Dr. Reddy's Lab, investing just Rs 100,000 in Dr. Reddy's Labs in 1992, it would have given a whopping Rs 4.89 crores in 2014!

Profit Opportunities in the Rebirth of India

Co-head of Research, Tanushree Banerjee believes, the opportunities in the Rebirth of India are not only more profitable than the ones in 1991 but the gains could come faster too.

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


Sensex Opens Higher; Automobile & Metal Stocks Lead
09:30 am

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Asian share markets are higher today as better-than-expected Apple Inc earnings drove some regional tech gains although broader confidence was capped by worries about the economic impact of China's virus outbreak.

Back home, India share markets have opened the day on a strong note. The BSE Sensex is trading up by 263 points while the NSE Nifty is trading up by 86 points.

The BSE Mid Cap index and the BSE Small Cap index have opened the day up by 0.9% and 0.6%, respectively.

All sectoral indices have opened the day on a positive note with stocks in the metal sector and auto sector witnessing most of the buying interest.

Speaking of the Indian share markets, earnings and upcoming budget would play a critical role in shaping the investment trend.

In the below video, Tanushree Banerjee tells how you should react to the biggest economic event of the year - the Union Budget.

Watch Now...

In news from the realty sector, real estate firm Prestige Estates is in talks with 2-3 large investors to raise US$ 300-400 million, by monetising some of its retail mall and office assets, before it goes a real estate investment trust (REIT) listing in a year or so.

The company's management said that the fund-raising will help the company in not only reducing its debt levels but the investor partner may acquire a stake in the rental portfolio and then become an anchor investor, when Prestige eventually goes for a REIT.

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Reportedly, the company's current net debt stands at around Rs 86.7 billion.

The group's chief executive Venkat K. Narayana confirmed the fund-raising plan and said around 6 million sq ft of retail and commercial office space will be ready in the next ten months.

Note that REITs have become a favourable option for India's leading commercial office developers, after Embassy Office Parks successfully listed the first one in the country, in March 2019.

Last month, Mindspace REIT filed its draft IPO prospectus which will see the listing raise Rs 10 billion through a fresh issue of shares, while existing shareholders, K. Raheja Corp. and Blackstone Group Lp, will offload a part of their shareholding through an offer for sale.

Last week on Friday, Prestige had said it raised around Rs 4.4 billion through a preferential issue of equity shares to Singapore-based GIC managed investment firm Gamnat Pte.

In other news, GIC has bought an additional 3.4% stake and increased its stake in Prestige Estates from 5.7% to 8.9%.

Prestige Estates share price has opened the day down by 1%.

Speaking of the real estate sector, note that this is one sector that has tested investor patience over the years. While the sector has seen big moves in the last few years, the downward movement has been equally sharp.

The post demonetisation era has been tough on the sector. Excess inventory, i.e. housing projects stuck for years, has meant homeowners have largely stayed away from any fresh buying in the real estate space.

Also, post the IL&FS crisis, lending to real estate developers has largely dried up. The BSE Realty Index also reflects the same. It was down 31% in 2018.

But is the scenario about to change?

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The government recently announced a Rs 250 billion package to bailout stalled housing projects. It's a much-needed relief for homeowners.

The government plans to revive over 1,600 stalled housing projects covering 4.6 lakh units.

Announcing the decision, Finance Minister Nirmala Sitharaman had said the government will put in Rs 100 billion in this alternative investment fund (AIF) while SBI and LIC would provide Rs 150 billion, taking the total size to Rs 250 billion.

Is the Real Estate Sector Set for a Turnaround?

What would be more interesting is the pickup in consumption once the real estate sector revives.

Once people get their homes, they are likely to spend on tiles, paints, furniture, electronics, pipes, cables, cement, and many other things.

Watch this space for more!

Moving on to news from the automobile sector, Maruti Suzuki has launched BS-VI compliant Super Carry (Petrol). This will result in price increase in all the variants of Super Carry (Petrol).

The revised Ex-showroom price in Delhi and NCR region shall vary from Rs 4.14 lakh to Rs 4.24 lakh. The same is effective from January 28, 2020.

Yesterday, the company reported 5.1% year-on-year (YoY) rise in profit at Rs 15.6 billion for the December quarter compared with Rs 14.8 billion in the same quarter last year.

The company said that during the quarter, cost reduction efforts, lower operating expenses, lower commodity prices and reduction in corporate tax rate were partially offset by higher sales promotion expenses, higher depreciation and lower fair value gains on invested surplus.

Sales for the quarter rose 3.8% YoY to Rs 196.4 billion. The automaker sold a total of 4,37,361 vehicles during the quarter, up 2% YoY. Sales in the domestic market stood at 4,13,698 units, higher by 2% YoY.

Maruti Suzuki share price has opened the day up by 1.1%.

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


December Quarter Results, IPO Buzz, and Top Stocks in Action Today
Pre-Open

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On Tuesday, Indian share markets witnessed selling pressure during closing hours and ended lower.

The BSE Sensex closed lower by 188 points to end the day at 40,967. Bharti Airtel and Tata Steel were among the top losers.

While the broader NSE Nifty ended down by 59 points to end at 12,060.

Among BSE sectoral indices, telecom stocks fell the most, followed by metal stocks and automobile stocks.

Speaking of the Indian share markets, earnings and upcoming budget would play a critical role in shaping the investment trend.

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In the below video, Tanushree Banerjee tells how you should react to the biggest economic event of the year - the Union Budget.

Watch Now...

Top Stocks in Action Today

Alembic Pharma share price will be in focus today as the company has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Azithromycin Tablets USP, 600 mg. The approved ANDA is therapeutically equivalent to the reference listed drug product Zithromax Tablets of Pfizer, Inc.

Bajaj Auto share price will also be in focus today as the company has launched a BS-VI compliant range of its CT and Platina motorcycle models at a starting price of Rs 40,794.

Market participants will also track Quess Corp share price, Nilkamal share price, and Trident share price as the companies will announce their December quarter (Q3FY20) results later today.

Results Corner

United Spirits has reported a rise of 34.5% in its net profit at Rs 2.6 billion for the December 2019 quarter as compared to Rs 1.9 billion for the same quarter in the previous year.

DCM Shriram has reported fall of 22.5% in its net profit at Rs 1,743.5 million for the quarter under review as compared to Rs 2,249.1 million for the same quarter in the previous year.

However, total income of the company increased by 4.4% at Rs 22,294.9 million for Q3FY20 as compared Rs 21,352 million for the corresponding quarter previous year.

To know more, you can read DCM Shriram's Q3FY20 result analysis on our website.

InterGlobe Aviation (IndiGo) has posted a 168% rise in consolidated net profit at Rs 4.9 billion for the quarter ended December 31. The bottom line of the aviation player got a boost on the back of increasing load factor and higher operating income.

The carrier reported revenue from operations of Rs 99.3 billion for the quarter, marking an increase of 25.5% against a 19.3% increase in capacity compared to the same period last year. Total income grew to Rs 103.3 billion during Q3FY20 as against Rs 82.2 billion in Q3FY19.

To know more about the company and the results, you can read InterGlobe Aviation's latest result analysis on our website.

Maruti Suzuki has reported 5.1% year-on-year (YoY) rise in profit at Rs 15.6 billion for the December quarter compared with Rs 14.8 billion in the same quarter last year.

The company said that during the quarter, cost reduction efforts, lower operating expenses, lower commodity prices and reduction in corporate tax rate were partially offset by higher sales promotion expenses, higher depreciation and lower fair value gains on invested surplus.

Sales for the quarter rose 3.8% YoY to Rs 196.4 billion. The automaker sold a total of 4,37,361 vehicles during the quarter, up 2% YoY. Sales in the domestic market stood at 4,13,698 units, higher by 2% YoY.

From the IPO Space...

Burger King India, the national master franchisee of the American burger brand in India, has received a green signal from the markets regulator to float its initial public offering (IPO).

The regulator issued its final observations on Burger King India's IPO proposal on January 24.

The proposed IPO will involve private equity firm Everstone selling a quarter of its shares and the burger chain issuing fresh shares worth Rs 4 billion. The total IPO size is estimated at Rs 10 billion.

The company will use Rs 2.9 billion out of the fresh net proceeds to roll out new company-owned restaurants and part of the money for general corporate purposes.

The burger chain had filed its documents for the proposed IPO last November.

Burger King is the second-largest burger brand globally as measured by the total number of restaurants. It had a global network of over 18,000 restaurants in more than 100 countries and US territories at the end of June 30, 2019.

It would be interesting to see how this IPO sails through.

Speaking of IPOs, Ankit keeps a tab on all the IPOs at his premium newsletter Equitymaster Insider (requires subscription).

He's closely watching IPOs in 2020 and is going to pick all the profitable ones for his readers at Equitymaster Insider.

In one of his recent articles, he has explained why keeping a tab on the IPO market is vital to your overall investing goals. You can read it here: What I Learnt from IPOs in 2019 (requires subscription).

Global Stock Market Drivers

European markets rebounded early on Tuesday after the previous day's thumping, which saw investors worried about the economic fallout from the coronavirus outbreak in China huddle in safe-haven assets.

Japan's Nikkei closed 0.6% lower. Australian shares ended 1.3% down and South Korea's Kospi index skidded 3%.

Brent oil prices stabilized above US$ 59, safely above their three-month low of US$ 58.50 and 10-year US Treasury yields stabilized above 1.6% after briefly dipping below that level on Monday.

The United States and other countries warned against travel to China as the coronavirus death toll rose to more than 100 and after the virus was detected in more than a dozen countries outside China.

As per the economic schedule released by Vijay Bhambwani, editor of Weekly Cash Alerts, here are the important events due later today:

  • India - M3 Money Supply
  • Australia - CPI Q4
  • USA - Crude Inventory

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