Sensex Ends 202 Points Lower; Oil & Gas and Power Stocks Witness Selling
Closing

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India share markets witnessed selling pressure during closing hours and ended their day on a negative note.

At the closing bell, the BSE Sensex stood lower by 202 points (down 0.5%) and the NSE Nifty stood down by 67 points (down 0.6%).

The BSE Mid Cap index ended the day down 0.9%, while the BSE Small Cap index stood down by 1%.

Stocks in the oil & gas sector and power sector witnessed huge selling pressure, while consumer durable stocks were trading in the green.

The rupee was trading at 71.38 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up by 0.52% and the Shanghai Composite was up by 2.28%. The Nikkei 225 was down 0.69%.

European markets were trading on a positive note. The FTSE 100 was up by 0.24%. The DAX was trading up by 0.20%, while the CAC 40 stood up 0.14%.

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Smallcaps Are Way Ahead of the Sensex in 2020

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In news from the macroeconomic space, Moody's Investors Service slashed its 2020 growth projection for India to 5.4% from 6.6% forecast earlier. The forecast is lowered amid growing concerns over the economic fallout of the novel coronavirus outbreak.

The agency expects a shallower recovery in Asia's third-largest economy given that global growth will likely take a hit following the virus outbreak in China.

It stated that improvements in the latest high frequency indicators such as PMI data suggest that the economy may have stabilized. While the economy may well begin to recover in the current quarter, the agency expects any recovery to be slower than it had previously expected. Accordingly, it has revised its India's growth forecasts to 5.4% for 2020 and 5.8% for 2021, down from the previous projections of 6.6% and 6.7%, respectively.

Moody's also reduced its global growth projection, saying that the coronavirus outbreak has diminished optimism about prospects of an incipient stabilization of global growth this year.

In China's Hubei province, the epicenter of the outbreak, about 1,933 new cases and 100 deaths were reported on 16 February, the lowest daily death count since 11 February.

Death toll in mailand China touched 1,770 as of the end of Sunday, with total confirmed cases at 70,548.

The rating agency said with the virus continuing to spread, it is still too early to make a final assessment of the impact on China and the global economy.

It has revised global GDP growth forecast down, and now expects G-20 economies to collectively grow 2.4% in 2020, a softer rate than last year, followed by a pickup to 2.8% in 2021.

For India, Moody's said, a key to stronger economic momentum would be the revival of domestic demand, both rural and urban. It also stated that the resumption of credit growth in the economy is equally important.

Moving on to news from finance sector, LIC Housing Finance share price was in focus today. The stock of the company witnessed huge selling pressure after reports stated that the country's biggest institutional investor Life Insurance Corporation of India (LIC) may speed up the process of merging its housing finance arm with IDBI Bank.

LIC, however, denied reports saying there is no proposal to merge LIC Housing Finance with any other entity.

At present, the market capitalisation of LIC Housing Finance and IDBI Bank is hovering at Rs 187 billion and Rs 372 billion.

LIC holds 51% stake in IDBI Bank and 40.13% in LIC Housing Finance.

Note that a one-time tax expense of Rs 62.7 billion has left IDBI Bank deep into the red for the 13th consecutive quarter with a net loss of Rs 57.6 billion for the three months to December 2019.

The bank has been under the prompt corrective action (PCA) framework of the Reserve Bank of India since May 2017.

How the above development pans out remain to be seen. Meanwhile, we will keep you updated on all the news from this space.

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


Sensex Trades Flat; ONGC and SBI Top Losers
12:30 pm

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Share markets in India are presently trading on a flat note. The BSE Sensex is trading down by 37 points, while the NSE Nifty is trading down by 16 points.

The BSE Mid Cap index is trading down by 0.3%, while the BSE Small Cap index is trading down by 0.6%.

Sectoral indices are trading mixed with stocks in the power sector and realty sector witnessing selling pressure, while consumer durable stocks and IT stocks are witnessing buying interest.

The rupee is currently trading at Rs 71.42 against the US$.

In news from the telecom sector, Bharti Airtel has paid Rs 100 billion to the Department of Telecommunications (DoT) as a part of its adjusted gross revenue (AGR) dues.

In a statement, the company said that it has paid a total amount of Rs 100 billion on behalf of Bharti Airtel, Bharti Hexacom, and Telenor.

The company added that it will make payment of the balance amount after self-assessment exercise.

Bharti Airtel's total AGR dues as assessed by DoT amounts to Rs 355.9 billion, including licence fee and spectrum usage charge.

Last week on Friday, the telecom department issued fifth and final notice to telecom operators for making payment immediately.

DoT's move comes after the Supreme Court pulled up Bharti Airtel and Vodafone Idea for not paying their AGR dues to the government by 23 January.

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The apex court had ended a 14-year legal battle between telecom companies and the DoT over what constituted AGR.

While the Supreme Court verdict has hit telcos, note that it has also made non-telecom firms holding licences for internal communications and signaling to pay licence fees on their entire revenue, even if they did not offer telecom services.

DoT has sought Rs 1.72 trillion from GAIL (India), Rs 480 billion from Oil India, and Rs 221.7 billion from Power Grid Corporation of India.

Bharti Airtel share price is presently trading down by 0.1%.

Moving on to news from the mutual funds space, investors poured nearly Rs 120 billion into equity oriented mutual funds in the three months ended December 2019, a sharp slump of 50% from the preceding quarter.

All categories of equity funds, including large-cap, mid-cap, small-cap and dividend yield funds saw a drop in flows compared to the preceding quarter.

Total flows in equity mutual funds stood at Rs 118.4 billion for the December quarter as against Rs 238.7 billion in the September quarter.

During the April-June quarter, inflows in such schemes stood at Rs 175 billion.

Meanwhile, the asset base of equity funds rose 6% to Rs 7.7 lakh crore for the quarter ended December.

Reportedly, over 30% of the net equity flows have been directed toward the large-cap category, as this segment has been the most resilient over the past year and delivered good returns.

However, inflows in large-cap funds plunged by 42% to Rs 35 billion for the quarter under review, from Rs 60 billion seen in July-September.

Mid-cap funds saw infusion of Rs 26.9 billion in the quarter under review, from Rs 37.4 billion in the preceding three months.

The flows in the small-cap category halved to Rs 13.6 billion, from Rs 30.4 billion in the September quarter.

Speaking of the mutual fund industry, note that the Indian mutual fund industry is a high growth sector.

In fact, the growth rate over the last five years has been even higher. The chart below shows the trend in mutual fund AUMs since FY14.

Mutual Fund AUM Tripled in Just 5 years

Over the last five years, mutual fund AUMs have nearly tripled, growing at 23.5% CAGR.

Recently, NSE-backed Computer Age Management Services (CAMS) filed a draft red herring prospectus with the market regulator. CAMS is the largest registrar and transfer agent (RTA) for mutual funds in India.

Being the largest registrar and transfer agent for mutual funds, CAMS is a direct beneficiary of the twin megatrends of financialisation and digitalisation.

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


Sensex Opens Down; Automobiles and Energy Stocks Lose
09:30 am

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Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 1.2% while the Hang Seng is up 0.5%. The Nikkei 225 is trading down by 0.8%.

Back home, India share markets opened marginally lower. The BSE Sensex is trading down by 69 points while the NSE Nifty is trading down by 25 points. The BSE Mid Cap index opened up by 0.5% while BSE Small Cap index opened up by 0.4%.

Sectoral indices have opened the day on a mixed note with IT stocks and consumer durables stocks witnessing buying interest. Oil & gas and automobiles stocks are trading in the red.

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

The rupee is currently trading at 71.41 against the US$.

In the news from the economy. The country's exports dropped 1.7% to US$26 billion in January, the sixth straight month of contraction, on account of a significant fall in shipments of petroleum, plastic, carpet, gems and jewellery, and leather products.

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According to the government data released, imports also fell for the eighth consecutive months, down 0.8% to US$41.1 billion in January, widening the trade deficit to a seven-month high of US$15.2 billion.

Gold imports shrunk by about 9% to US$1.6 billion during the month under review.

Last time, it was in June 2019 when the trade deficit aggregated at US$15.3 billion.

Of the 30 key sectors, as many as 18 segments showed negative growth in exports during the month.

Shipments of petroleum products, plastic, carpet, gems and jewellery, and leather products contracted by 7.4%, 10.6%, 5.2%, 6.9%, and 7.6% respectively, in January.

The country's outbound shipments have remained subdued so far this year. It may have a bearing on the overall economic growth, which is pegged at 5% for the current financial year.

Industrial output declined by 0.3% in December 2019 due to poor performance mainly by manufacturing.

In January, while oil imports grew 15.3% to US$ 13 billion, non-oil imports fell by 6.7% to US$28.2 billion.

Cumulatively, during the April 2019-January 2020 period, exports were down 1.9% to US$265.3 billion, while imports contracted by 8.1% to US$398.5 billion.

Trade deficit during the period narrowed to US$133.3 billion as against US$163.3 billion in April-January 2018-19.

Meanwhile, an RBI release showed that services export for December 2019 stood at about US$20 billion while imports were at US$12.6 billion.

Moving on to the news from pharma sector. Dr Reddy's Laboratories announced that the United States Food and Drug Administration (USFDA) has asked it to initiate voluntary action at its Duvvada facility in Andhra Pradesh.

Last week, the audit of Dr. Reddy's Formulations Srikakulum Plant (SEZ) Unit I, Andhra Pradesh, was completed with zero observation by the USFDA.

Earlier on 5 November 2015, USFDA had issued a warning letter to Dr Reddy's over deviations with current good manufacturing practices at its active pharmaceutical ingredients (API) manufacturing facilities in Andhra Pradesh and Telangana, as well as over violations at its oncology formulation manufacturing facility at Duvvada.

Of these three manufacturing facilities, API manufacturing facility at Miryalaguda, Telangana and oncology formulation manufacturing facility at Duvvada received Establishment Inspection Reports from the USFDA in June 2017 and February 2019, respectively.

In a separate development, Dr Reddy's on 12 February announced to acquire Wockhardt's select divisions of branded generics business in India and a few other international territories of Nepal, Sri Lanka, Bhutan and Maldives for a consideration of Rs 18.5 billion.

Dr. Reddy's share price opened up by 0.4%.

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

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Meanwhile, in the video below, Tanushree talks in great detail about pharma sector. She tells us where the sector stands now and also about the potential for a rebound.

Watch Now...

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 Cues in Focus Today
Pre-Open

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On Friday, Indian share markets witnessed most of the selling pressure during closing hours and ended lower.

The BSE Sensex closed lower by 202 points to end the day at 41,258. IndusInd Bank and Power Grid were among the top losers.

While the broader NSE Nifty ended down by 61 points to end at 12,113.

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

Top Stocks in Action Today

Tata Motors share price will be in focus today as the company has bagged an order from Uttar Gujarat Vij Company (UGVCL) for supplying the electric version of its sub-compact sedan Tigor, which will be deployed in Gandhinagar and Ahmedabad, as part of its tender with Energy Efficiency Services (EESL).

Bharat Petroleum Corporation (BPCL) share price will also be in focus as it has received approval from its board of directors for divestment of company's shareholding of 61.65% in Numaligarh Refinery as per the decision of Cabinet Committee on Economic Affairs (CCEA).

This divestment would be undertaken subject to the completion of all requisite formalities including inter-alia shareholders' approval.

Market participants will also track Reliance Industries share price. The company's telecom arm - Reliance Jio Infocomm (Jio) has continued its lead in average 4G download speed rankings with 20.9 megabit per second (mbps) speed in January.

According to telecom regulator TRAI's data, Reliance Jio led the chart despite dip in peak download speed of 27.2 mbps recorded in November. The company had almost three times higher speed than its nearest rival Bharti Airtel.

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Results Corner

Nestle on Thursday posted a 38.4% rise in December quarter profit at Rs 4,730 million. The packaged foods and beverages company had reported a profit of Rs 3,418 million in the same quarter a year ago.

The FMCG major's total sales rose to Rs 31,307 million compared with Rs 28,788 million from a year before.

The company's total income rose to Rs 31,940 million, from 29,725 million a year ago.

The company declared a final dividend of Rs 61 per share.

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

BPCL has reported over 2-fold jump in its net profit at Rs 12,606.3 million for the quarter under review as compared to Rs 4,951.4 million for the same quarter in the previous year.

PI Industries has reported a rise of 12.2% in its net profit at Rs 1,204 million for the quarter ended December 31, 2019 as compared to Rs 1,073 million for the same quarter in the previous year.

Total income of the company increased by 20.3% at Rs 8,695 million for Q3FY20 as compared to Rs 7,227 million for the corresponding quarter previous year.

On a consolidated basis, Adani Transmission has reported a rise of 32.5% in its net profit at Rs 2,036.7 million for the quarter under review as compared to Rs 1,536.7 million for the same quarter in the previous year.

Supreme Court Dismisses Telcos' Plea

On Friday, the Supreme court rejected the telcos' plea seeking new schedule of AGR payments.

Coming down heavily on the Department of Telecommunications (DoT) for not taking coercive action against telcos for failing to repay, the apex court ordered contempt proceedings against Bharti Airtel and Vodafone Idea.

The next hearing has been scheduled for March 17.

The Apex Court also pulled up the DoT desk officer who wrote to the Attorney General asking him to not insist on payment of dues.

Last month, a bench headed by Justice Arun Mishra had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 trillion in statutory dues by January 23, saying it did not find any "justifiable reason" to entertain them.

Vodafone Idea, Bharti Airtel and Tata Teleservices had filed modification applications on the time schedule to make payments of over Rs 1 trillion that they owe to DoT as AGR.

From the IPO Space...

As per an article in The Economic Times, the Rs 95-billion initial public offer (IPO) of SBI Cards and Payments Service is likely to be launched in the first week of March.

Earlier this week, the markets regulator gave its inprincipal approval to SBI Cards to launch its IPO.

Here's an excerpt from the article:

  • The IPO is likely to be priced in a band of Rs 690-700 per share. In the unofficial grey market, SBI shares are being traded at Rs 950-970 per share, about 38% over its likely IPO price.

Parent State Bank of India added a record 3.6 lakh shareholders in December quarter as a portion of the shares in the SBI Cards IPO are reserved for the state-owned lender's shareholders.

The company will offer up to 130.5 million equity shares via the offer for sale route, according to the draft red herring prospectors (DRHP).

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

Global Stock Market Updates

European shares touched record highs on Friday as investors digested whether China's coronavirus outbreak would cause long-lasting damage to global economy.

Asian stock markets ended on a mixed note. As of the most recent closing prices, the Hang Seng was up 0.3% while the Nikkei was down 0.6%.

Asian shares had earlier inched higher toward their second straight week of gains, helped by hopes that government will make provisions to soften the impact on their economies from the coronavirus epidemic.

The euro slumped to another near-three-year low, with worries lingering about slowing growth in the euro zone and rising political uncertainties in Germany.

On the commodities front, crude oil prices edged up backed by expectations that major producers will implement deeper output cuts to offset slowing demand in China caused by the coronavirus epidemic.

In response to the demand slump, the Organization of the Petroleum Exporting Countries (OPEC) and its allied producers, a grouping known as OPEC+, are considering cutting output by up to 2.3 million barrels per day.

The International Energy Agency (IEA) said that first-quarter oil demand is set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the coronavirus outbreak.

US Energy Secretary Dan Brouillette also told Reuters the coronavirus epidemic in China has had a marginal impact on energy markets and is unlikely to dramatically affect oil prices even if Chinese demand falls by 500,000 barrels per day.

We will keep you updated on the latest 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.