Sensex Ends 216 Points Higher; Banking and Finance Stocks Witness Buying
Closing

Indian share markets continued their momentum during closing hours and ended the day on a positive note. Gains were largely seen in the telecom sector and realty sector.

At the closing bell, the BSE Sensex stood higher by 216 points (up 0.6%) and the NSE Nifty closed higher by 40 points (up 0.4%). The BSE Mid Cap index closed down by 0.4%, while the BSE Small Cap index ended the day down by 0.3%.

Asian stock markets finished on a positive note as of the most recent closing prices. The Hang Seng stood down by 0.4% and the Nikkei was trading down by 1%.

European markets were trading on a mixed note. The FTSE 100 was trading flat. The DAX was trading down by 0.1%, while the CAC 40 was up by 0.2%.

The rupee was trading at 69.48 to the US$ at the time of writing.

Data available with NSE suggested that foreign portfolio investors (FPIs) bought Rs 24.7 billion worth of domestic stocks on Tuesday.

Domestic institutional investors (DIIs), on the other hand, were net sellers to the tune of Rs 9.9 billion.

Speaking of FII data, 2018 was a turbulent year for the Indian stock markets. Foreign investors dumped Indian equities worth Rs 33,014 crore and debt instruments worth Rs 47,795 crore. In fact, they have continued to be net sellers in Indian stocks even in 2019. So far in January 2019, they have sold equities worth Rs 2,675 crore.

Had it not been for the solid participation from domestic investors, the Indian markets would have witnessed a much steeper fall.

The chart below puts things in perspective.

The Rapid Growth of the Indian Mutual Fund Industry

Ankit Shah shares an interesting observation around the rapid growth of mutual fund (MF) Industry in India.

Here's what he wrote in one of the editions of The 5 Minute WrapUp...

  • Ten years ago, the total assets under management (AUM of the Indian mutual fund industry were Rs 4.13 trillion (1 trillion equals 1 lakh crore) as on 31 December 2008.

    Over the subsequent five years, the industry grew at a compound annual growth rate (CAGR) of 15% to take the total AUM to Rs 8.2 trillion as on 31 December 2013.

    Thereafter, the Indian mutual fund industry took off like never before, compounding at 23% CAGR, and taking the total AUM as on 31 December 2018 to Rs 22.86 trillion.

    In just 10 years, the AUM of the Indian MF Industry has multiplied 5.5 times, compounding at 19% CAGR.

    The total number of mutual fund folios as on 31 December 2018 stood at 8.03 crore (80.3 million).

Moving on to the news from the insurance sector, HDFC Life Insurance Company share price is in focus today. The retail quota of HDFC Life Insurance Company offer for sale (OFS) got subscribed 4% by morning hours today.

This came in after the OFS observed strong response from non-retail investors yesterday.

Data available with the NSE showed the issue received retail bids for 4.36 lakh shares against the retail quota of 99.5 lakh shares.

Standard Life, the joint venture partner in HDFC Life Insurance, is set to sell close to 5% stake in the company to meet public shareholding norm.

The share sale will fetch around Rs 35.7 billion to Standard Life.

The floor price for the offer is set at Rs 357.5.

Standard Life will sell up to 70 million shares, or 3.47% of the total equity of HDFC Life Insurance Company on March 12 through the offer for sale (OFS) route with an option of selling additional 1.46%, or 29.5 million shares, in the event of oversubscription.

In the news from the pharma space, Zydus Cadila said it has received final approval from the US health regulator to market Potassium Chloride extended-release capsules, used to treat or prevent low amounts of potassium in the blood.

The company said the newly-approved product will be manufactured at the group's formulations manufacturing facility at SEZ, Ahmedabad.

As per the news, the company has received approval from the US Food and Drug Administration (USFDA) to market the drug in the strengths of 8 mEq (600 mg) and 10 mEq (750 mg).

Shares of the company's listed entity Cadila Healthcare were in focus today on the back of the above development.

The company has more than 254 approvals and has so far filed over 350 abbreviated new drug applications (ANDAs) since it commenced filings in 2003-04.

From the aviation space, SpiceJet share price was in focus today. The stock of the company witnessed selling pressure on fears that grounding of Boeing 737 MAX aircraft will hurt the airline's revenue and profitability.

As per an article in The Economic Times, India has grounded Boeing 737 MAX being operated by airlines in the country after about 15 countries banned the aircraft following two deadly accidents within a span of five months.

Shares of the company fell around 8% in early trade today after the Directorate General of Civil Aviation (DGCA), India's aviation regulator, grounded Boeing 737 MAX planes following the fatal crash of a plane of the same model in Ethiopia.

In other news, Jet Airways share price was also witnessing selling pressure today as it was reported that the airline has grounded another four of its aircraft due to non-payment of lease rentals.

With this, the total number of aircraft taken out of operations due to severe liquidity crunch in the airline and its subsequent failure to pay rentals to various lessors now stand at 32 so far.

Yesterday, the debt-laden airline was in focus on reports that Etihad Airways and a new partner will together invest nearly Rs 40 billion to revive the airline. Also, the founder-promoter Naresh Goyal and his wife would step down from the board and all executive positions.

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


Sensex Trades Marginally Higher; HDFC Bank, IndusInd Bank Top Gainers
12:30 pm

Share markets in India are presently trading marginally higher. Sectoral indices are trading mixed with stocks in the realty sector and finance sector witnessing buying interest while metal stocks and telecom stock are witnessing selling pressure.

The BSE Sensex is trading up by 95 points while the NSE Nifty is trading up by 11 points. The BSE Mid Cap index is trading down by 0.2% while the BSE Small Cap index is trading down by 0.3%.

The rupee is trading at Rs 69.61 against the US$.

The domestic currency appreciated by 8 paise to 69.63 against the dollar in opening trade today, driven by sustained foreign fund flows and higher opening in domestic equity market.

In the news from the aviation space, SpiceJet share price is witnessing selling pressure today on fears that grounding of Boeing 737 MAX aircraft will hurt the airline's revenue and profitability.

As per an article in The Economic Times, India has grounded Boeing 737 MAX being operated by airlines in the country after about 15 countries banned the aircraft following two deadly accidents within a span of five months.

Shares of the company fell around 8% in early trade today after the Directorate General of Civil Aviation (DGCA), India's aviation regulator, grounded Boeing 737 MAX planes following the fatal crash of a plane of the same model in Ethiopia.

Here's an excerpt from the article:

  • DGCA has taken the decision to ground the Boeing 737-MAX planes immediately. These planes will be grounded till appropriate modifications and safety measures are undertaken to ensure their safe operations. As always, passenger safety remains our top priority.

In other news, Jet Airways share price is also witnessing selling pressure today. Financially stressed Jet Airways said it has grounded another four of its aircraft due to non-payment of lease rentals.

With this, the total number of aircraft taken out of operations due to severe liquidity crunch in the airline and its subsequent failure to pay rentals to various lessors now stand at 32 so far.

Yesterday, the debt-laden airline was in focus on reports that Etihad Airways and a new partner will together invest nearly Rs 40 billion to revive the airline. Also, the founder-promoter Naresh Goyal and his wife would step down from the board and all executive positions.

Reports stated that the company received fresh loans of Rs 20.5 billion from Punjab National Bank (PNB).

As per an article, the airline raised foreign currency term loans worth Rs 11 billion and a non-fund-based credit facility of Rs 9.5 billion from PNB. Jet Airways will use the credit facility for its working capital needs.

Sources also said Etihad, which currently holds 24% stake will consider fund infusion into Jet under bank-led provisional resolution plan.

Last week, the debt-laden airline was forced to ground four more aircraft due to non-payment of lease rental. With this, a total of 25 aircraft have been grounded in less than a month for unpaid dues, including the newly introduced Boeing 737 Max, Boeing 737 NG and Airbus A330 planes.

The airline has been compelled to cancel nearly 200 domestic flights every day, approximately a third of the daily schedule of 600 flights.

Jet Airways had tried to lease or sell some of its owned aircraft to raise money that could help pare its over Rs 80 billion debt. But the plans, including a wet leasing deal with TruJet for its ATRs, got stuck.

As per an article in a leading financial daily, aircraft lessors have been supportive of the company's efforts in this regard. The company is also making all efforts to minimize disruption to its network due to the above and is proactively informing and re-accommodating its affected guests.

Jet Airways share price is presently trading down by 2%.

Moving on to the news from the realty sector, DLF share price is witnessing buying interest today. The company plans to raise an estimated Rs 30 billion by June through the sale of equity shares to qualified institutional investors.

Aiming to become a debt-free company, DLF had last year announced plans to issue up to 173 million shares through qualified institutional placement (QIP) to raise funds pre-pay loans.

DLF share price is presently trading up by 3%.

Speaking of realty sector, note that The BSE Realty index has been volatile in the last five years.

Have a look at the chart below to see the performance:

Volatile Performance of BSE Realty Index in the Last Five Years

Here's what Sarvajeet Bodas wrote about it in one of the recent editions of The 5 Minute WrapUp...

  • In 2017, the BSE Realty index was the best performer with a massive gain of 98%. In the next year, the index was the worst performer with a decline of 31%.

    In 2018, the realty sector took a beating on the back of concerns of higher interest rates and accounting changes (from percentage of completion method to completion method). The NBFC crisis added to the woes.

    Interestingly, 2018 also witnessed some improvement in real estate sales.

    2019 hasn't been good so far with the index down about 3%.

    However, the recent budgetary support and interest rate reduction by the RBI could help to revive demand.

    Buying the right real estate stock today is the way to go.

He believes, this could be the turning point for the real estate sector.


Sensex Opens Flat; Metal and Power Stocks Drag
09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.5% while the Hang Seng is down 0.5%. The Nikkei 225 is trading down by 1.4%. Meanwhile, the S&P 500 and the Nasdaq rose on Tuesday after tame inflation data underscored the Federal Reserve's dovish stance on interest rate hikes, but the Dow ended lower as Boeing's shares sank for a second day after one of its planes crashed in Ethiopia.

Back home, India share markets opened on a flat note. The BSE Sensex is trading up by 14 points while the NSE Nifty is trading up by 5 points. Both, the BSE Mid Cap index and BSE Small Cap index opened flat too.

Sectoral indices have opened on a mixed note with consumer durables stocks and realty stocks witnessing maximum buying interest. Metal stocks and power stocks have opened the day in red.

The rupee is currently trading at Rs 69.66 against the US$.

In the news from the economy. Food prices registered their fifth successive monthly decline in February, continuing the trend.

Reportedly, the fall is bound to put pressure on farm incomes, heightening the agrarian crisis that could play an important role in the upcoming Lok Sabha elections.

Annual growth in India's benchmark inflation measure, Consumer Price Index (CPI) was reported to be 2.57% for February 2019 against 1.97% in January. However, food and beverage prices, which have a 46% weight in the total CPI basket, registered a fall.

This is the longest spell of a fall in food prices for the period covered by the new CPI series.

To be sure, the pace of fall in food prices has reduced in the past couple of months.

The growth in food and beverages component of CPI has increased by 122 basis points between January 2019 and February 2019.

There is also a rural-urban divide in the behaviour of food prices. While urban food inflation has been in positive territory for both January and February 2019, rural food inflation continues to be negative.

The recovery in urban food prices was also reflected in the Wholesale Price Index (WPI) for primary food articles, a useful proxy for farm-gate prices, which registered positive growth in January 2019. It had been falling continuously between August 2018 and December 2018.

WPI data for February is yet to be released.

A detailed breakup of CPI food basket also shows that the price crash in the headline food inflation number is because of fall in prices of fruits and vegetables, pulses and sugar.

In fact, inflation for vegetables, pulses and sugar has been in negative territory for the entire period between April 2018 and February 2019. Cereals, which are procured by the government at Minimum Support Prices (MSPs) have not faced a disinflation throughout this period.

The food inflation trends might have mixed political implications.

Moving on to the news from IPO space. Indian firms are returning to equity markets to raise funds with two companies opening subscriptions for initial public offerings (IPOs) this month, but sentiment is expected to remain cautious ahead of national election starting in April.

Mini Ratna MSTC is all set to hit the market with an initial public offering today.

The government has proposed to offload 1.8 billion shares, or 25%, of total paid-up equity in the largest B2B e-commerce company in India.

The issue by the Kolkata-headquartered firm will be closed on March 15.

You can get access to our MSTC IPO note here.

Speaking of IPOs, 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.

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


Indian Indices Continue Momentum; MSTC IPO, and Top Stocks in Action Today
Pre-Open

On Tuesday, share markets in India opened on a positive note and ended the day deep in green after an optimistic day of trading.

The BSE Sensex closed higher by 482 points to end the day at 37,536. While the broader NSE Nifty ended up by 133 points, to end the day at 11,301 points.

Among BSE sectoral indices, realty stocks rose the most by 2.6%, followed by telecom stocks at 2.4%.

Top Stocks in Action Today

Bharti Airtel share price will be in focus today as the company is planning to reduce its direct stake in Bharti Infratel by over 50%. The company's unit -- Nettle Infrastructure Investments will be purchasing up to 32% share in Bharti Infratel by March 18, 2019.

Piramal Enterprise share price will be in focus today as the company's partner for its global pharma businesses - Slate Run Pharmaceuticals LLC. (Slate Run) has launched generic cinacalcet hydrochloride tablets (30mg, 60mg and 90mg) in the United States (US).

Tata Motors share price will also be in focus today as the company has bagged orders for over 2,500 commercial passenger transportation vehicles from various institutional customers and the company is in the process of delivering these units.

Market participants will also track Deep Industries share price.

Reportedly, Deep Industries has received Letter of Award of contract from ONGC, for charter hiring of 01 No. of 1000 HP Mobile Drilling Rig for Ahmedabad Asset for a period of 3 years. The total estimated value of the said Award is approximate Rs 917.5 million.

From the Currency Space...

The rupee appreciated 15 paise to 69.99 against the dollar yesterday, on weakening greenback, fresh foreign inflows and higher opening of domestic equities.

The rupee closed at 69.89 against the dollar on Monday, its highest close since January 7.

In its previous session Friday, the rupee edged 14 paise lower to close at 70.14. On a weekly basis, however, the domestic currency logged 78 paise gains.

The dollar depreciated against most Asian currencies after Federal Reserve Chairman Jerome Powell said the central bank was in no hurry to change interest rates.

Reportedly, fresh foreign fund inflows and positive sentiment on Dalal Street also buoyed the local unit.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 11 billion on Friday, the reports noted.

From the IPO Space...

In the news from the IPO space, the initial public offering of state-run e-commerce company MSTC is set to open today. The company is planning to raise Rs 2.3 billion through this IPO. The issue closes on March 15 and the company has fixed the price band of Rs 121-128 per share.

Incorporated in 1964, Kolkata based MSTC Limited is a PSU involved in the business trading of bulk-raw material and e-commerce service provider to government and government-controlled entities.

It was a canalizing agency for import of ferrous scrap until 1992 and established itself one of the leading e-commerce service providers in the country after de-canalization.

The company has also entered into the recycling business through a 50:50 joint venture with Mahindra Intertrade Limited (MIL) for setting up a shredding plant and collection centers across the country.

The three main business verticals of MSTC are (i) E-commerce, (ii) Trading, and (iii) Recycling.

We will keep you updated on all the developments from this space. Stay tuned.

Speaking of IPOs, 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.