Sensex Ends 143 Points Lower; Realty and Oil & Gas Stocks Witness Selling
Closing

Editor's note: Dear reader, we are now on Telegram! Get our latest views on stock markets and more, instantly. Join our Telegram channel here!


India share markets recovered some losses during closing hours today and ended their day marginally lower.

At the closing bell, the BSE Sensex stood lower by 143 points (down 0.4%) and the NSE Nifty stood down by 45 points (down 0.4%).

The BSE Mid Cap index ended the day down 0.7%, while the BSE Small Cap index stood down by 0.8%.

Stocks in the realty sector and oil & gas sector witnessed huge selling pressure, while healthcare stocks were trading in the green.

Note that Indian stock market fell for the fifth consecutive day in a row today tracking weak global cues.

The Sensex plunged as much as 400 points while the Nifty dropped more than 100 points to trade below 11,600 levels.

{inlineads1}

Market participants are worried whether the broader markets will fall further, or will there be a meaningful recovery?

When I asked Apurva Sheth, lead chartist and technical analyst at Equitymaster for his view, he told me that there are bright chances for Nifty to bounce back from here.

He explained further by saying:

  • "Nifty bounced back after touching the day's low of 10,536. This level is very close to the 50% retracement level of 11,550.

    The 50% retracement is drawn from the low of 10,670 in September 2019 to the high of 12,430 in January 2020. The 50% retracement levels have acted as support for index and stocks on several occasions in the past. So, I expect a healthy upswing in the Nifty very soon."

So, make sure you stay on the look out for any opportunities to snag up some quick profits.

Keep watching this space for more updates.

The rupee was trading at 71.62 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up by 0.31% and the Shanghai Composite was up by 0.11%. The Nikkei 225 was down 2.13%.

European markets were also trading on a negative note. The FTSE 100 was down by 1.64%. The DAX was trading down by 1.84%, while the CAC 40 stood down 1.65%.

In news from the pharma sector, Dr Reddy's Laboratories share price was in focus today as the company announced the first-to-market launch of naproxen and esomeprazole magnesium delayed-release tablets.

The tablets are the therapeutic equivalent generic version of Vimovo, approved by the US Food and Drug Administration (USFDA).

The company management in a release said that this launch is a testament to the company's core strengths in the areas of research and development and intellectual property and it is excited to be a part of forming the first generic market for Vimovo tablets and to provide an affordable treatment alternative for patients.

The Vimovo brand had US sales of approximately US$ 414 million for the 12 months ended December 2019, according to IQVIA Health.

Also, in other news, the company announced that the audit of its Integrated Product Development Organization (IPDO) at Medchal-Malkajgiri, Telangana, by the US FDA, has been completed today, and no Form 483 was issued at the closure of the audit.

Speaking of pharma sector, in the video below, co-head of research, Tanushree Banerjee talks about where the sector stands now and its potential for a rebound.

Tune in to find out more...

Meanwhile, Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from what she calls the Rebirth of India.

As per her, now is the right time to buy these stocks to profit from the Rebirth of India. You can read about them here.

Moving on to news from the commodity space, gold was witnessing buying interest today. The yellow-metal continued its uptrend seen this week as market participants rushed to safe haven assets as new coronavirus cases grew rapidly outside of China.

As per the news, the number of new infections inside China - the source of the outbreak - was for the first time overtaken by fresh cases elsewhere on Wednesday, with Italy and Iran emerging as epicentres of the rapidly spreading illness.

Italy has reported more than 400 cases and Iran has reported only 139 cases, but epidemiologists say the true number of cases must be many times higher.

Note that 2019 proved pretty good for gold, as gold surged amid fears of a possible slowdown in global growth and uncertainty surrounding geopolitical crisis in West Asia and Britain's divorce from the European Union.

The same uptrend is also seen in 2020 so far.

Gold prices are seen rising as the rapid spread of coronavirus cases outside of China and its potential negative impact on the global economy are prompting investors to take refuge in safe haven assets like gold.

Increase in the number of new coronavirus cases outside China over the past few days have bolstered the safe haven appeal of gold. South Korea, Italy and Iran have logged sharp increases in infections and deaths, while several countries in the Middle East reported their first cases of coronavirus.

The international spot gold prices have rallied to seven-year highs while India's domestic gold prices rallied to all-time highs.

Speaking of gold, 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...

Gold Has Been a Shining Long-Term Investment

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

Here's what Ankit Shah wrote about this in one of the editions of The 5 Minute WrapUp...

  • In fact, gold has delivered double-digit gains in 10 of the last 15 years.

    During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).

    During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.

    One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment.

Meanwhile, in his latest video, Vijay Bhambwani shares his view on gold and silver prices. He talks about how the bullion prices will move in the short term.

You can check the same here: Will Gold and Silver Prices Fall because of the Coronavirus?

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


Sensex Slips 450 Points; SBI & IndusInd Bank Top Losers
12:30 pm

Editor's note: Dear reader, we are now on Telegram! Get our latest views on stock markets and more, instantly. Join our Telegram channel here!


Share markets in India fell nearly 1% today tracking weakness in global markets owing to the rapid spread of coronavirus beyond China.

Heavy foreign fund outflows too weighed on market sentiment. Foreign portfolio investors offloaded shares worth Rs 33.8 billion on Wednesday, taking their total sales to over Rs 69 billion in past three days.

Barring consumer durable stocks, all sectoral indices are trading on a negative note with stocks in the realty sector, metal sector and power sector witnessing most of the selling pressure.

The BSE Sensex is trading down by 391 points (down 0.9%), while the NSE Nifty is trading down by 123 points (down 1%).

The BSE MidCap index is trading down by 1.2%, while the BSE SmallCap index is trading down by 1.5%.

The rupee is currently trading at 71.61 against the US$.

In news from the pharma sector, Sun Pharma's wholly owned subsidiary has launched Riomet ER in the US as an adjunct to diet and exercise to improve glycemic control in patients 10 years of age and older with type 2 diabetes mellitus.

{inlineads1}

Riomet ER was approved by the US Food and Drug Administration (USFDA) on August 29, 2019.

Riomet ER is the first and only FDA-approved liquid formulation of extended-release metformin.

Sun Pharma share price is presently trading up by 1.7%.

Speaking of the pharma sector, co-head of research at Equitymaster, Tanushree Banerjee talks in great detail about the sector in the video below.

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

Watch Now...

Moving on to news from the insurance sector, the Insurance Regulatory and Development Authority of India (IRDAI) has set up a committee to study the feasibility of allowing life insurers to sell indemnity-based health products.

Until now, these companies were allowed to sell only benefits-based health products.

As per an article in The Economic Times, if the nine-member panel recommends the move and the Centre gives the green light, this will pave the way for Life Insurance Corporation (LIC) to further consolidate its dominance of the country's insurance landscape using its expansive distribution network to potentially seize market share from health insurers ahead of its IPO next year.

However, stakeholders and market observers point out that while such a move can bring much needed improvement in coverage of health-based products, the proposition may face stiff resistance from health insurers.

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

In other news, Fitch ratings on Wednesday said that the proposed initial share sale of LIC will improve the accountability and transparency of the country's largest insurer and benefit the insurance industry.

Fitch said it expects that the initial public offering (IPO), once executed, may also encourage some of the other private sector insurance companies to list some of their shares in the stock market over the medium term, although the current insurance regulation does not require all insurers to be listed publicly.

Finance Minister Nirmala Sitharaman had said that LIC will be listed as part of government's disinvestment initiative.

Currently, the government owns the entire 100% stake in LIC.

Fitch expects the state to reduce ownership only marginally in the insurer in the near term, but could gradually reduce the stake over the long run to meet the minimum public holding requirement for listed companies.

Speaking of the life insurance sector, this is one sector which is a clear outperformer in this volatile market.

With the huge future potential of the sector, the outperformance is not surprising. India's life insurance penetration i.e. insurance premiums as a percentage of GDP, is very low compared to the global average.

Life Insurance Sector - Megatrend in the Making

The industry is expected to grow at a CAGR of 11-13% over the next five years. India's large youth population and growing awareness about insurance is bound to accelerate growth.

As per Tanushree, this is one of the megatrends that will help what she calls the Rebirth of India.

She has identified the 7 best stocks that will profit from the Rebirth of India. You can read about these top 7 stocks here.

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


Sensex Opens Over 200 Points Down; Realty and Auto Stocks Under Pressure
09:30 am

Editor's note: Dear reader, we are now on Telegram! Get our latest views on stock markets and more, instantly. Join our Telegram channel here!


Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.2% while the Hang Seng is down 0.9%. The Nikkei 225 is trading down by 1.8%. Meanwhile, the S&P 500 fell for a fifth straight day on Wednesday and while its decline was slower than the last few days, the session was volatile as investors reacted to headlines about coronavirus and sought to gauge its economic fallout.

Back home, India share markets opened lower. The BSE Sensex is trading down by 204 points while the NSE Nifty is trading down by 57 points. The BSE Mid Cap index and BSE Small Cap index opened down by 0.5% and 0.3% respectively.

All sectoral indices have opened the day on a negative note with realty stocks, automobiles stocks and IT stocks witnessing maximum selling pressure.

The rupee is currently trading at 71.58 against the US$.

The Indian rupee settled for the day higher by 20 paise at 71.65 against the US dollar on Wednesday in line with other Asian currencies, helped by lower crude oil prices.

{inlineads1}

At the interbank foreign exchange market, the local currency opened at 71.76 to the US dollar.

During the day, the local unit saw a high of 71.59 and a low of 71.79. The domestic unit finally settled at 71.65, up 20 paise from its previous close.

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?

Moving on to the news from the economy. As per the ratings agency Crisil, increased demand for retail loans, strong growth in lending by private banks and pick-up in economic activity may improve credit growth in the next financial year (FY21).

The RBI's move to exempt banks from cash reserve ratio (CRR) requirement for incremental credit to certain sectors for up to five years, will also support lending.

According to report, the prolonged slowdown in bank lending may be bottoming out this fiscal, with gross credit offtake set to rise 8-9% on-year in FY21, a good 200-300 basis points (bps) over the likely growth of around 6% this fiscal.

So far this year, loan growth has slowed to around 7-7.5%. During this fiscal, some growth momentum is expected in the fourth quarter, after subdued three quarters due to traditional fiscal year ending growth.

It mentioned that retail credit should continue to grow at a healthy rate of around 16%, next year, supported by sustained demand for unsecured loans, muted business growth for non-banks as well as steady levels of pool purchases.

Structural shifts such as favourable demographics, rising propensity to leverage for personal consumption, increase in availability of financing, and reasonable risk-adjusted returns for lenders, will continue to support retail lending.

One theme we believe will play out over the next decade is the credit growth in India.

Retail and corporate credit are expected to grow by multi-fold over the next few years.

It remains to be seen how these projections pan out. We will keep you updated on all the developments from this space.

Speaking of credit growth, let's take a look at India's domestic credit data...

Increasing Domestic Credit to Private Sector Key for Economic Growth

Domestic credit to the private sector in India is amongst the lowest in the world.

Here's what Tanushree Banerjee, co-head of research at Equitymaster, wrote about it in one of the editions of The 5 Minute WrapUp...

  • A huge chunk of the domestic borrowing is by the government. That leaves very little scope to lend to the private sector.

    Low credit to the private sector means low capital available for expansion. A major hurdle for one of the major growth engines of the economy.

    With the government set to borrow overseas, a lot of capital is expected to free up at home.

    This also coincides with the recent efforts by the Insolvency and Bankruptcy Code (IBC) to resolve bad loans. This will free up further capital for lending.

As per her, a proactive step in this regard will be a huge boost to the economy going forward.

This is one of the megatrends that will help what Tanushree calls the Rebirth of India.

She has identified the 7 best stocks that will profit from the Rebirth of India. You can read about these top 7 stocks here.

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


Indian Indices Continue Sell-Off, Rising Gold Prices, and Top Cues in Focus Today
Pre-Open

Editor's note: Dear reader, we are now on Telegram! Get our latest views on stock markets and more, instantly. Join our Telegram channel here!


On Wednesday, Indian share markets witnessed selling pressure throughout the day and ended deep in the red.

Benchmark indices extended losses to the fourth straight day, tracking a massive sell-off on the Wall Street amid concerns over the Covid-19 spreading beyond China.

Besides weak cues from global markets, heavy foreign fund outflows too weighed on market sentiment.

The BSE Sensex closed lower by 392 points to end the day at 39,889. Sun Pharma and Maruti Suzuki were among the top losers.

While the broader NSE Nifty ended down by 119 points to end at 11,679.

Among BSE sectoral indices, realty stocks fell the most, followed by automobile stocks and capital goods stocks.

{inlineads1}

RBI Lifts Ban on Bandhan Bank's Network Expansion

Bandhan Bank share price will be in focus today as the Reserve Bank of India (RBI) lifted restrictions placed on the bank from opening new branches.

In September 2018, the central bank had imposed a ban on the private lender from expanding its network as the lender had failed to reduce promoter stake to 40% from close to 82% within the stipulated three years from the time of commencing operations.

RBI had also ordered the bank to freeze the salary of its chief executive Chandra Shekhar Ghosh over its failure to meet shareholding rules.

Bandhan Bank's current promoter holding at 61% is still above the regulatory ceiling.

According to RBI's bank licence norms, a private sector bank's promoter needs to pare holding to 40% within three years, to 20% within 10 years, and to 15% within 15 years.

In a regulatory filing to exchanges, the Kolkata-based bank said RBI has removed the restriction "considering the efforts made by the bank to comply with the said licensing condition".

The easing of curbs has come within a month of RBI allowing Kotak Mahindra Bank's founder Uday Kotak to own a higher 26% stake than the earlier regulatory stipulated of 15%.

Bandhan Financial Holdings is the holding company and promoter of the Bandhan Bank. It's holding was diluted to 61% from 82% after the acquisition of Gruh Finance last year.

Speaking of banking sector, note that 2019 was brutal for some banking stocks.

The market has severely punished them. This is due to issues such as worsening asset-quality, corporate governance, and inadequate capital.

Stocks such as Yes Bank and Lakshmi Vilas Bank are down more than 70%.

Falling Knives in the Banking Sector

Falling stock prices could be enticing. After all, we love deep discounts and good bargains.

But if you're thinking of buying these stocks it's important to remember this point - If a stock is in a falling spree, there's probably a good reason behind it.

And realising this in a falling market is the first step towards correcting one's investing process.

Gold Continues Uptrend

Moving on to news from the commodity space, market participants will be closely tracking gold prices today as gold rate rose heading back towards a more-than seven-year high hit earlier this week, as a warning from the United States over the domestic spread of the coronavirus outbreak rattled global markets, supporting the yellow metal's safe-haven demand.

Note that 2019 proved pretty good for gold, as gold surged amid fears of a possible slowdown in global growth and uncertainty surrounding geopolitical crisis in West Asia and Britain's divorce from the European Union.

The same uptrend is also seen in 2020 so far.

Gold prices are seen rising as the rapid spread of coronavirus cases outside of China and its potential negative impact on the global economy are prompting investors to take refuge in safe haven assets like gold.

Increase in the number of new coronavirus cases outside China over the past few days have bolstered the safe haven appeal of gold. South Korea, Italy and Iran have logged sharp increases in infections and deaths, while several countries in the Middle East reported their first cases of coronavirus.

The international spot gold prices have rallied to seven-year highs while India's domestic gold prices rallied to all-time highs.

Speaking of gold, in his latest video, Vijay Bhambwani shares his view on gold and silver prices. He talks about how the bullion prices will move in the short term.

You can check the same here: Will Gold and Silver Prices Fall because of the Coronavirus?

Developments in the Pharma Space

Lupin share price will be in focus today as the company has launched Ethacrynic Acid Tablets USP, 25 mg, having received an approval from the United States Food and Drug Administration (USFDA) earlier.

The product would be manufactured at Lupin's Nagpur OSD facility, India.

The tablets are generic equivalent of Edecrin Tablets, 25 mg, of Bausch Health Americas Inc. and are indicated for the treatment of edema when an agent with greater diuretic potential than those commonly employed is required.

Cipla share price will also be in focus today as the US health regulator has issued a warning letter to the pharma company for its Goa manufacturing unit.

Cipla said that the company has received a warning letter from the US Food and Drug Administration (USFDA) for its formulations plant at Goa where inspection was conducted during 16-27 September 2019.

The warning letter reportedly said that the pharma company may continue to sell existing drugs from the Goa facility, but newer approvals will be held by the regulator if corrective measures are not taken.

The company said it remained committed to maintain the highest standards of compliance and will work closely with the agency to comprehensively address all the observations.

Last month, the drug maker had informed exchanges that that the USFDA had classified the inspection conducted at its Goa manufacturing facility as Official Action Indicated (OAI). The company had then said that it did not believe that it would have any material impact on the US business at this stage.

We will keep you updated on how this development pans out. Stay tuned.

Speaking of pharma sector, in the video below, co-head of research, Tanushree Banerjee talks about where the sector stands now and its potential for a rebound.

Tune in to find out more...

Meanwhile, Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from what she calls the Rebirth of India.

As per her, now is the right time to buy these stocks to profit from the Rebirth of India. You can read about them here.

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