Indian Indices at 3 Year Lows: Sensex Cracks 5.6%; Nifty Ends Below 8,600 Mark
Closing

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It was another day of bloodbath on Dalal Street today. India share markets traded deep in the red as Sensex and Nifty hit a fresh 3-year low tracking negative trend seen in Asian markets.

Losses were seen amid heightened worries of COVID-19 virus outbreak.

The fall led to the market-capitalisation of BSE listed companies getting reduced to Rs 114.48 trillion, its lowest level since February 15, 2017.

Selling pressure was also seen as the Supreme Court in its hearing rapped telcos and the department of telecommunication (DoT) for going through self-assessment. The apex court questioned the Solicitor General on telcos' self-assessments without permission of the court, calling it a contempt of court.

At the closing bell, the BSE Sensex stood lower by 1,709 points (down 5.6%) and the NSE Nifty stood down by 425 points (down 4.8%).

The BSE Mid Cap index ended the day down 4.8%, while the BSE Small Cap index stood down by 6.1%.

All sectoral indices ended deep in the red with stocks in the telecom sector, banking sector and power sector witnessing maximum selling pressure.

The rupee was trading at 74.35 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 4.18% and the Shanghai Composite was down by 1.83%. The Nikkei 225 was down 1.68%.

European markets were also trading on a negative note. The FTSE 100 was down by 4.61%. The DAX was trading down by 4.24%, while the CAC 40 stood down 4.57%.

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Here's what Richa Agarwal, our smallcap analyst at Equitymaster, has to say about the ongoing market crash and what it means for stock market participants...

  • ...at a time when you see the Sensex and large cap stocks taking big knocks, you will be completely surprised at another feature of the market.

    It has flown under the radar for most investors so far...

    Small cap stocks, which were already cheap and attractive, have now become downright ridiculously priced!

    Many of them offer massive gains to those who will buy at current prices.

    And I'm not even talking about the weak companies...

    I'm talking about strong companies with ultra-strong balance sheets. Businesses strong enough to weather the oncoming coronavirus storm - whatever it throws at them.


    Looks like the perfect time for the opportunistic investor to pick up some good bargains!

Richa believes the best approach right now is to consider investing in stocks that are fundamentally strong and promise steady income along with strong upside in the long term.

She has identified one such stock that has the potential to return crores in the long term. To know more, click here for all the details.

Also, Richa's latest webinar - Smallcap Rebound Opportunity in the Times of Coronavirus shares a list of open positions where the rebound potential is strong... And until the rebound, one can enjoy regular income from the dividend stocks with yields up to 9%.

And here's what Tanushree Banerjee wrote about the coronavirus pandemic and its effects on the global economy in today's edition of The 5 Minute WrapUp...

  • ...pandemics have had profound economic effects. But in the longer term, the economic effects can be positive.

    Is the assumption that Coronavirus could lead to such a massive social and economic change too farfetched?

    Not at all!

    In fact, the outbreak of Coronavirus exposed the underbelly of the fragile global supply chains, over dependent on China.

    And therefore, global manufacturers are bound to seek geographic diversification of resources and imports.

    That could mean a massive change in the way businesses are run.

Tanushree believes that the ongoing market crash could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.

For bluechip stocks, she believes the time is ripe to begin buying some of the safest bluechips as there is safety in valuations and the market is offering them at deeper and deeper bargains.

The profits of bluechips (BSE 200 companies) are currently at a decade low as can be seen in the chart below.

A Rebound in Profits Overdue?

Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with. She has already recommended 4 safe bluechips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Trade the Coronavirus Crisis Safely (requires subscription)

And if you are not a StockSelect subscriber, here's where you sign up.

In the video below, Tanushree has also explained how buying the above stocks at bargain prices is a once in a decade opportunity.

In news from the aviation space, data released by aviation regulator DGCA showed domestic air passenger traffic in February increased by 8.98% to 1.236 crore as compared to the same period last year.

However, the rise in the number of domestic air passengers for January was just 2.2% when compared with the figures of the corresponding period in 2019.

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According to the Directorate General of Civil Aviation (DGCA) data, passenger load factors of all major airlines - Air India, SpiceJet, GoAir, IndiGo, AirAsia India and Vistara - increased in February as compared to January.

At 93%, SpiceJet saw the highest passenger load factor in February. At number two, GoAir had 90.5% load factor.

Passenger load factor measures the seat capacity utilisation of the airline.

SpiceJet's market share decreased from 16.6% in January to 15.3% in February, even as it retained the number two spot.

The market share of Air India, GoAir, AirAsia India and Vistara was 12%, 10%, 7.3% and 6.7%, respectively last month.

How this trend pans out in the coming months remains to be seen. Meanwhile, we will keep you updated on all the developments form this space.

Moving on to news from the commodity space, crude oil plunged Rs 116 to Rs 1,979 per barrel today amid weak trend overseas.

On the Multi Commodity Exchange, crude oil for March delivery slumped by Rs 116 or 5.54%, to Rs 1,979 per barrel.

Note that, crude oil prices had crashed last week in what was the worst price dip since the 1991 Gulf War with Brent prices plunging to US$ 31 per barrel.

In a recent article, we have written the entire timeline showing economics of falling crude oil prices. You can check the same here: All About the 30% Crash in Crude Oil - 10 Points

Going ahead, market participants are expecting crude oil prices to remain low until OPEC+ resets oil production again.

Vijay Bhambwani, editor of Weekly Cash Alerts at Equitymaster, states that at this point in time, short selling natural gas & crude oil at significantly higher levels for the coming summer are high conviction trades. To know more about his view and positions, you can check out his recent article here: Energy Markets Get Muddy (requires subscription).

From the banking sector, IndusInd Bank share price was in focus today as the stock of the lender crashed around 30% in today's trade on the back of rumors surrounding its financial health of the bank.

The bank has, however, provided an assurance that it has strong financials and healthy governance.

The bank in a press release said that in wake of the significantly higher level of market rumours and speculation around lnduslnd Bank stock, we would like to reiterate that the Bank is financially strong, well-capitalized, profitable, and a growing entity with strong governance.

The bank also sought to allay fears with regard to its asset quality and said that last quarter, the bank's gross NPA at 2.18% was the 2nd lowest in the industry amongst large private sector Banks. It further added that it expects current quarter Gross NPA to be pretty much in line with that of last quarter.

Apart from IndusInd Bank, Yes Bank share price was also in focus today as the stock of the lender jumped 50% in early trade today. Buying was seen as the bank is all set to resume full banking services from 6 pm today.

Yes Bank CEO-designate Prashant Kumar said there are absolutely no worries on the liquidity front and that complete operational normalcy would be restored from 6 pm on Wednesday.

The private lender is also hoping to recover about Rs 85 billion from its loan defaulters in the coming financial year.

Kumar added that only a third of customers have withdrawn the entire amount of Rs 50,000 allowed during the moratorium.

On March 5, the RBI had imposed a moratorium on the private lender, restricting withdrawals to Rs 50,000 per depositor till April 3, in view of its poor financial health due to bad loans.

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. You can read the entire article here: How the YES Bank Collapse Unfolded - 10 Points.

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


Sensex Corrects Over 1,400 Points; IndusInd Bank Plummets 30%
02:30 pm

Share markets in India have extended losses, amid heightened worries of COVID-19 virus outbreak. Sell-off intensified in the afternoon session, sending the benchmark indices tumbling over 4% to three-year low levels.

The fall led to the market-capitalisation of BSE listed companies getting reduced to Rs 114.48 trillion, its lowest level since February 15, 2017.

Selling pressure was also seen as the Supreme Court in its hearing rapped telcos and the department of telecommunication (DoT) for going through self-assessment. The apex court questioned the Solicitor General on telcos' self-assessments without permission of the court, calling it a contempt of court.

The BSE Sensex is trading down by 1,479 points, down 4.9%, while the NSE Nifty is trading down by 434 points.

Stock of IndusInd Bank corrected over 30%, while Bajaj Finance, Axis Bank, and Kotak Mahindra Bank fell over 9%.

All sectoral indices are trading in red with stocks in the telecom sector, banking sector, and finance sector witnessing most of the selling pressure.

More details to follow in the upcoming commentary.


Sensex Slips Over 1,000 Points; Banking and Finance Stocks Bleed
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 are presently trading deep in the red. While Indian share markets opened on a positive note today, gains were erased as the session progressed amid panic selling as coronavirus fears mounted.

Barring IT sector, all sectoral indices are trading on a negative note with stocks in the banking sector, finance sector and telecom sector witnessing most of the selling pressure.

The BSE Sensex gave up the 30,000-mark, and is presently trading down by 1,023 points (down 3.4%). Meanwhile, the broader NSE Nifty is trading down by 297 points (down 3.3%).

The BSE Mid Cap index and the BSE Small Cap index are trading down by 3.6% and 4.3%, respectively.

The rupee is trading at Rs 74.17 against the US$.

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Speaking of the current stock market scenario, our smallcap analyst at Equitymaster, Richa Agarwal, believes this is a time to not panic and remain invested in the good quality smallcap stocks, irrespective of the volatility.

She believes the best approach is to consider investing in stocks that are fundamentally strong and promise steady income along with strong upside in the long term.

Richa has identified one such stock that has the potential to return crores in the long term. To know more, click here for all the details.

In news from the pharma sector, shares of Dr Lal PathLabs rose over 8% today after the government said it will allow private laboratories to do testing of coronavirus.

The government is exploring the possibility of allowing private laboratories to ramp up testing as the number of cases of coronavirus disease are increasing in India.

The total number of coronavirus cases in India rose to 147, with 10 fresh cases reported from various parts of the country.

Dr Lal PathLabs share price is presently trading up by 3%.

In other news, Sun Pharma share price is in focus today. The company's board on Tuesday approved the buyback of its equity shares from the open market at a maximum price of Rs 425 per share for an aggregate maximum amount of up to Rs 17 billion.

At the maximum buy-back size and the maximum buy-back price, the indicative maximum number of equity shares to be bought back under the buy-back would represent 1.67% of the total number of equity shares of the company.

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 banking sector, shares of Yes Bank jumped 50% in early trade today as the private lender is all set to resume full banking services from 6 pm today.

Yes Bank CEO-designate Prashant Kumar said there are absolutely no worries on the liquidity front and that complete operational normalcy would be restored from 6 pm on Wednesday.

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The private lender is also hoping to recover about Rs 85 billion from its loan defaulters in the coming financial year.

Addressing the media on Tuesday, Kumar said the bank had made adequate preparations for any surge in withdrawal of deposits.

He said that "all our ATMs and branches are sufficiently filled with cash and we will not need any external liquidity support. But, if the need comes, we have lines available."

Kumar added that only a third of customers have withdrawn the entire amount of Rs 50,000 allowed during the moratorium.

Earlier this week on Monday, RBI Governor Shaktikanta Das had assured liquidity support if the need arose.

On March 5, the RBI had imposed a moratorium on the private lender, restricting withdrawals to Rs 50,000 per depositor till April 3, in view of its poor financial health due to bad loans.

Last week, Yes Bank reported a record loss of Rs 185.6 billion for Q3FY20 due to a sharp jump in bad loans and higher provisioning.

In the December-quarter results, Yes Bank's gross non-performing assets (NPAs) more than doubled to Rs 407.1 billion from Rs 171.3 billion in September.

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

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. Read the article here: How the YES Bank Collapse Unfolded - 10 Points.

Speaking of the banking sector, the low access to credit for micro small and medium enterprises (MSMEs) tells us there is a huge opportunity for lenders.

This is evident from the chart below:

India's Huge Lending Opportunity

Of the 60 million MSMEs in India, only 11% had access to credit from organised lenders. Most of them are self-financed or get credit from unorganised sources.

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

  • Self-financing limits the growth of these MSMEs. On the other hand, high interest rates from unorganised sources makes it difficult for them to earn profits.

    The Modi government is looking at various ways to correct this problem. Mudra loans, online loans facilities are being made available to MSMEs.

    Slowly but surely, lenders are sensing the huge opportunity that lies ahead for this sector.

    Banks and other financial firms with prudent lending practices and strong distribution networks will benefit from this megatrend.

Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from this megatrend.

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.

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


Sensex Opens Over 250 Points Up; Healthcare and IT Stocks Lead
09:30 am

Asian stock markets are higher today as stocks on Wall Street bounced back overnight on hopes of stimulus as the country grapples with the coronavirus outbreak. The Shanghai Composite is up 0.5% while the Hang Seng is up 0.1%. The Nikkei 225 is trading up by 1.7%.

Meanwhile, the S&P 500 rose 6% on Tuesday, clawing back a significant portion of Monday's steep losses, as the Federal Reserve and the White House took further steps to boost liquidity and stem damage from the coronavirus outbreak that has gripped the global economy. The Dow Jones Industrial Average rose 5.2% and the Nasdaq Composite gained 6.2%.

Back home, India share markets open higher tracking their global peers. The BSE Sensex is trading up by 272 points while the NSE Nifty is trading up by 92 points. The BSE Mid Cap index and BSE Small Cap index opened up by 1.5% and 1.2% respectively.

All sectoral indices are trading in green with healthcare stocks, metal stocks and IT stocks witnessing maximum buying interest.

Speaking coronavirus impact on Indian stock markets, the chart below shows the trend in the total market capitalisation of all BSE-listed companies since the start of 2020.

Coronavirus Triggers Massive Wipeout of Investor Wealth

As you can see, through most of January and February, the total market capitalisation hovered between Rs 150-160 trillion.

It was only in the last week of February that a massive sell-off started on rising fears of the coronavirus outbreak escalating into a global pandemic.

So, what should you do in such times?

In this emergency episode of the Investor Hour, Rahul Goel talks to Vijay Bhambwani, who he calls India's #1 trader.

Vijay dives deep in this "coronavirus" situation and presents a picture which we believe would be extremely beneficial to any investor or trader.

Whatever you do, don't miss this emergency issue of the Investor Hour!

Listen in here...

Moving on, the rupee is currently trading at 74 against the US$.

The rupee pared its initial gains to settle marginally lower at 74.28 against the US dollar on Tuesday amid continued meltdown in equity markets and sustained foreign fund outflows.

The Indian rupee which started the day on a positive note, witnessed heavy volatility amid fears that the rate cut by the Reserve Bank would not be sufficient to boost market sentiments.

At the interbank foreign exchange market, the local currency opened at 74.16.

During the day it saw a high of 73.86 and a low of 74.32 against the American currency. The domestic unit finally settled at 74.28 against the greenback, down 2 paise over its previous closing price.

Speaking of gloomy economy, coronavirus fears, falling markets and crude oil prices, Ajit Dayal has written an insightful piece, sharing his views in the latest edition of The Honest Truth.

Here's a snippet from the article:

  • Is the meltdown over?

    While the unravelling of the debt excess in the US and the developed world may have some more to play out, the question on an investor's mind in India is: Is the mayhem over and what should I do next?

    On the face of it, there is some interesting Upside Potential, or potential profit, if you were to buy the specific stocks now and assume, they get back to their past peak levels over, say, the next 2 to 3 years.

    With the help of either some jaadu mantar or some good policy.

    But there are some "bets" I would be very cautious about: Yes Bank, Reliance and the INR, for instance.

You can read his entire article here: The Market Gets a Viral Attack.

In the news from oil & gas sector. Oil prices steadied early on Wednesday after sliding to their lowest in four years, sapped by fears for fuel demand and the global economy amid travel and social lockdowns triggered by the coronavirus epidemic in a number of countries around the world.

Brent crude was up 0.3% at US$28.8 a barrel after falling earlier to US$28.4, the lowest since early 2016.

The international benchmark fell 4.3% on Tuesday. US crude was down at US$26.9 a barrel, after falling to as low as US$26.2, also the lowest in four years. West Texas Intermediate fell 6% on Tuesday.

In a recent article, we have written the entire timeline showing economics of falling crude oil prices. You can check the same here: All About the 30% Crash in Crude Oil - 10 Points

Going ahead, market participants are expecting crude oil prices to remain low until OPEC+ resets oil production again.

Vijay Bhambwani, editor of Weekly Cash Alerts at Equitymaster, states that at this point in time, short selling natural gas & crude oil at significantly higher levels for the coming summer are high conviction trades.

To know more about his view and positions, you can check out his recent article here: Energy Markets Get Muddy (requires subscription).

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


Falling Gold Prices, Global Stock Market Drivers, and Top Cues in Focus Today
Pre-Open

On Tuesday, Indian share markets ended deep in the red with Sensex and Nifty witnessing a sharp fall during closing hours.

While Indian share markets opened on a negative note, losses were recovered thereafter as indices rose sharply over 500 points. The gains were again wiped out amid panic selling as coronavirus fears mounted.

At the closing bell yesterday, the BSE Sensex stood lower by 811 points (down 2.6%) and the NSE Nifty closed down by 229 points (down 2.5%).

Barring FMCG sector, all sectoral indices ended on a negative note, with stocks in the banking sectorfinance sector and telecom sector, leading the losses.

And here's some futures and options data from Vijay Bhambwani, editor of Fast Income Alerts...


Here's what Vijay wrote about the same...

  • NSE f&o turnover was Rs 7,95,772 Crs (yesterday Rs 6,45,831 Crs). Higher turnover was seen in the first half when markets were rising.

    The marketwide average MWPL was 18.92% (yesterday 19.19%). The gradual unwinding of positions continues.

    A shallow market is highly volatile, can turn on a dime. I had indicated today morning that the Nifty had made its first attempt to make a bottom. A few failed / false attempts are likely before a real bottom is made.

To track such data on a daily basis and get our latest views on stock markets and more, you can join our Telegram channel here.

Top Stocks in Action Today

Sun Pharma share price will be in focus today as the company's board on Tuesday approved a Rs 17 billion share buyback offer at a maximum price of Rs 425 per share.

At the maximum buy-back size and the maximum buy-back price, the indicative maximum number of equity shares to be bought back under the buy-back would represent 1.67% of the total number of equity shares of the company.

ONGC share price will also be in focus today as the company's board approved an interim dividend of Rs 5 per share at its meeting held on Monday.

The company also stated that during the last few days due to sudden and sharp decline in crude oil prices, the share prices of oil sector entities have witnessed a lot of volatility, and particularly the share prices of the upstream companies have been hit hard.

Market participants will also track Delta Corp share price. The company has decided to close casinos at Sikkim to combat the outbreak of Covid-19.

YES Bank's Rating Upgrade

On Tuesday, Yes Bank share price zoomed more than 70% intraday after rating agency Moody's upgraded the private lender's outlook to positive (from negative) while also upgrading its rating by a notch.

Moody's said that the upgrade of YES Bank's long-term issuer rating to Caa1 from Caa3, placing it at the same level as its long-term deposit ratings, takes into account the bailout of the bank's depositors and senior creditors under the YES Bank Reconstruction Scheme.

Note that seven banks led by State Bank of India (SBI) have invested Rs 100 billion, boosting its core capital. The troubled bank will restart full-fledged banking services from tomorrow 6 pm onwards.

Yesterday, in the RBI press conference, the RBI Governor Shaktikanta Das said if needed, the central bank would give additional liquidity support to the crippled lender.

The central bank had superseded Yes Bank board on March 5 and placed it under an administrator.

Das said the moratorium on Yes Bank will be lifted on March 18 at 6 pm and new board will assume position on March 26 and administrator will vacate office.

He assured depositors their money is completely safe and there is no need for worry saying that in the history of Indian banking, depositors of SCBs have never lost money.

It was announced that depositors can withdraw their money after 6pm on March 18.

Das also added that interactions with the banks investing in Yes Bank gives the RBI committee confidence that the revival plan will work out.

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. You can read the entire article here: How the YES Bank Collapse Unfolded - 10 Points.

Gold Prices Continue Downtrend

On Tuesday, domestic gold prices extended their decline, falling more than 1.5% following a steep correction in global rates.

In global markets, gold prices edged lower, extending their recent loss as investors preferred to sit on cash amid heightened panic in financial markets over the coronavirus pandemic.

Note that, gold prices have fallen around Rs 5,500 in previous five sessions, falling from Rs 44,500 levels.

In one of his videos, 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?

Companies Shelve IPO Plans

Burger King India on Monday joined a growing list of companies putting their initial public offerings (IPO) on hold.

As per a leading financial daily, the company initially planned to launch the issue before the end of this month to raise about Rs 4 billion.

Last week, Rosary Biotech shelved its IPO plan due to fear spillover.

On Monday, Antony Waste Handling Cell had to withdraw its IPO as the issue failed to receive requisite subscription even after an extension of its initial subscription period. It became the first mainboard IPO of the year to go unsubscribed.

The issue attracted bids for only 24,08,200 shares against the total issue size of 48,24,544 shares.

The IPO was initially opened for three days from March 4 to 6, but later the subscription period was extended till March 16.

A number of IPOs, including Home First Finance and Equitas Small Finance are waiting for regulatory nod from the markets regulator.

As of March 13, the market regulator was considering seven more applications including those of UTI AMC, Esaf Small Finance Bank, CAMS, Likhitha Infrastructure, Stove Kraft, NCDEX and Barbeque Nation.

Global Stock Market Drivers

Coronavirus fears led to a historic drop in US stocks, shut borders and disrupted daily life around the world, as governments took increasingly drastic measures to try to reduce the severity of the global outbreak.

Financial markets had their worst day in 30 years despite emergency action by global central banks to try to prevent a recession, with US stock markets falling 12% to 13%.

Japanese policymakers are considering new stimulus measures to tackle the economic fallout from the coronavirus, aiming to further bolster markets after the central bank's biggest cash injection since the global financial crisis.

On Tuesday, economy minister Yasutoshi Nishimura said that the government will consider tax cuts and other measures to battle the damage from the outbreak.

With global stock markets reeling from the crisis, the Bank of Japan pumped US$ 30.272 billion into the financial system with an 84-day dollar funding operation, the largest since December 2008.

On the commodities front, crude oil prices rose by US$ 1 per barrel on Tuesday as bargain hunters emerged after recent sharp falls due to the coronavirus pandemic and the price war between Saudi Arabia and Russia.

The United States has said it will take advantage of low oil prices to fill its Strategic Petroleum Reserve (SPR), and other countries and companies are planning similar measures to fill storage tanks.

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

  • Japan - Export, Imports & Trade Balance February
  • US - Fed Interest Rate Decision
  • US - Crude Oil Inventories

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