Sensex Ends 425 Points Higher; Banking and Energy Stocks Witness Buying
Closing

Indian share markets witnessed buying interest during closing hours and ended their day on a positive note. Gains were largely seen in the banking sector and energy sector.

At the closing bell, the BSE Sensex stood higher by 425 points (up 1.1%) and the NSE Nifty closed higher by 139 points (up 1.2%). The BSE Mid Cap index closed up by 1.1%, while the BSE Small Cap index ended the day up by 0.7%.

Asian stock markets finished on a positive note as of the most recent closing prices. The Hang Seng stood up by 0.2% and the Nikkei was trading up by 2.2%.

European markets were also trading on a positive note. The FTSE 100 was up by 0.4%. The DAX was trading up by 0.01%, while the CAC 40 was up by 0.4%.

The rupee was trading at 68.86 to the US$ at the time of writing.

Speaking of the general mood in Indian stock markets these days, a lot of market participants are playing the prediction game ahead of the elections.

A common theme is to sit on cash to escape the volatility ahead of the upcoming elections. In case there is an unexpected event, you can then get in post the correction.

But does timing the market work?

Not really, if you see the market performance in the year of the past three national elections (2004,2009 and 2014).

Downside of Timing The Stock Market

Looking at the returns in the above chart, staying out of the market to escape volatility would have been a costly affair every time.

The market gave above average returns in all three of those years.

This does not mean one can expect the same in the future.

But there's one thing for sure. Predicting short-term directions of the market is a futile and many a times a costly affair.

That's why we believe in picking safe stocks when they are actually 'safe' i.e. during such times of high pessimism and uncertainty.

In the news from the aviation sector, Jet Airways share price was in focus today. The stock of the company extended its rally seen yesterday. Yesterday, Jet Airways' share price went up by over 12.5% as it was reported that founder and principal promoters Naresh Goyal and his wife, Anita Goyal would step down from the board.

As per an article in The Economic Times, the debt-laden airline's lenders' consortium may invoke the entire 51% stake of Naresh Goyal in the airline and start looking for a new buyer in the weeks to come.

Here's an excerpt from the article:

  • The current CEO Vinay Dube is expected to stay on and steer Jet out of the current crisis.

    Former SBI managing director and a former Jet Airways board member Srinivasan Vishvanathan may be invited to join the airline's top leadership. Vishvanathan was on Jet's board as an Independent Director till August 2018 for nearly three years.

Reportedly, this development occurred after Etihad expressed its desire to exit the airline by formally asking State Bank of India (SBI) to purchase its stake in the airline.

In 2013, Jet Airways survived a similar crisis when Abu Dhabi's Etihad Airways injected US$600 million of capital for a 24% stake in the airline, three London Heathrow slots and a majority share in Jet's frequent flyer programme. The infusion helped Jet pare down debt and fight growing domestic competition.

With more than US$1 billion of debt, Jet is struggling to stay afloat. It has delayed payments to banks, suppliers, pilots and lessors - some of which have forced the airline to ground as many as 40 planes.

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

In the news from the IPO space, state-owned Rail Vikas Nigam Limited's initial public offer (IPO) is set to open for subscription on Friday. Through this IPO, the company is seeking to raise up to Rs 4.8 billion according to the government's divestment schedule.

Incorporated by the Ministry of Railways under the companies act, 1956 in 2003, Rail Vikas Nigam Limited is a project executing agency.

The objective of the company is to undertake mobilization of financial resources, rail project development, enhance golden quadrilateral and port connectivity by implementing rail projects, and raise extra-budgetary resources for project execution.

The company engages in completing all sorts of rail projects such as construction of cable-stayed bridges, major bridges, workshops, metro projects, railway electrification, gauge conversion, new lines, doubling, and institutional buildings.

The Miniratna central public-sector enterprise, incorporated by the Ministry of Railways, is offering up to 2,53,457,280 shares in the price band of Rs 17-19 per share. The issue will close on April 3.

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 IPOs, 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.


Sensex Trades Flat; IT Stocks Under Pressure
12:30 pm

Share markets in India are presently trading on a flat note. Sectoral indices are trading mixed with stocks in the IT sector and FMCG sector witnessing selling pressure while realty stocks, energy stocks and metal stocks are witnessing buying interest.

The BSE Sensex is trading up by 33 points, while the NSE Nifty is trading up by 12 points. The BSE Mid Cap index is trading up by 0.6% and the BSE Small Cap index is trading up by 0.3%.

The rupee is currently trading at 68.81 against the US$.

In the news from the commodity space, crude oil is witnessing buying interest today, pushed up by ongoing supply cuts led by producer club OPEC and by US sanctions on Iran and Venezuela.

Note that crude oil prices were near 2019 highs last week, supported by supply cuts led by producer club OPEC. Reportedly, US sanctions against oil producers Iran and Venezuela are boosting prices.

Last week, the OPEC scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until at least June, when the next meeting is scheduled.

The OPEC and non-affiliated allies like Russia - known as the OPEC+ alliance - have been withholding around 1.2 million barrels per day (bpd) in crude supply from the start of the year to tighten markets and prop up prices.

US crude oil output has soared by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making America the world's biggest producer ahead of Russia and Saudi Arabia.

On the demand-side, there is concern that an economic slowdown as well as improving energy efficiency and the emergence of alternative transport fuels will erode oil consumption.

Moving on to the news from the realty sector, DLF share price is witnessing buying interest today. Shares of the company are trading 8% higher after the real estate developer on Monday announced the launch of a Qualified Institutional Placement (QIP) programme to raise Rs 31.8 billion.

DLF said a meeting of Securities Issuance Committee of the board of directors is scheduled to be held on Thursday, March 28, to consider and determine the issue price of the equity shares to be issued in the QIP.

This is the third major fundraising from DLF. In 2007, DLF raised close to Rs 92 billion through initial public offer (IPO). In 2013, the company had raised nearly Rs 19 billion through the institutional placement programme.

Reportedly, the company intends to utilize the net proceeds primarily towards prepayment/repayment of a portion of the borrowings. As of December 31, 2018, the company's total debt and net debt aggregated to Rs 192.8 billion and Rs 173 billion.

Last week, DLF announced its second joint venture with global realty investment, development and management firm Hines. India's largest real estate developer will work on a project with total value of 70 billion.

DLF Home Developers (DHDL), a wholly owned subsidiary of DLF, and Green Horizon Trustee, an affiliate of Hines, have entered into a joint venture (JV) to develop a high-end commercial project in Gurugram.

To know more about the company, you can read DLF's latest result analysis and DLF's annual report analysis on our website.

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; Realty and Energy Stocks Gain
09:30 am

Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.4% while the Hang Seng is up 0.3%. The Nikkei 225 is trading up by 1.8%. While, the indices in the US moved between negative and positive territory throughout the session, with investors keeping their eyes on the US Treasury market.

Back home, India share markets opened on a flat note. The BSE Sensex is trading up by 49 points while the NSE Nifty is trading up by 22 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.3%.

Barring IT stocks and telecom stocks, all the sectoral indices have opened the day in green with realty stocks and energy stocks leading the gainers.

The rupee is currently trading at 68.91 against the US$.

The rupee ended almost flat at 68.96 per US dollar Monday as participants preferred to wait on the sidelines to see the outcome of RBI's first-ever rupee-dollar swap auction.

The forex market sentiment revived towards the fag-end, offsetting early losses amid increased selling of the greenback by exporters, the reports noted.

At the Interbank Foreign Exchange market, the rupee opened on a weak note at 69.09 then fell further to 69.17 against the US dollar. The local unit, however, erased the initial gains and finished at Rs 68.96, down by just 1 paisa over its previous close.

On Friday, the rupee had ended lower by 12 paise at 68.95 against the American currency on rise in demand for the greenback from importers and sell-off in domestic equities.

The rupee-dollar swap auction announced by the RBI earlier in March will infuse Rs 350 billion into the system. The auction of US$ 5 billion for a tenure of three years will be conducted today.

Additionally, foreign portfolio investors (FPIs) bought equities worth a net Rs 1.5 billion on Monday. Ongoing flood of liquidity into both debt and equity coinciding with the stable dollar index has led to recent strength of rupee.

Foreign investors are back in the news.

The recent surge in the Indian stock markets can be also attributed to the strong foreign investor inflows into Indian equities.

The chart reveals the monthly trend in foreign investor flows into Indian equities over the last five years. The period almost coincides with the term of the Modi government.

Are Foreign Investors Coming Back to Indian Equities?

During this period, you can see that foreign investor participation in Indian equities shrank.

Over the last five years, foreign investors were net sellers in 24 months. Effectively, foreign investors were net sellers 40% of the time.

The chart shows that the highest monthly net foreign investor inflow over the last five years was recorded in March 2017 at Rs 337.8 billion.

However, foreign investor flows are influenced by a myriad of global factors and are susceptible to change course anytime.

Moving on to other news. As per an article in a leading financial daily, food inflation in the country is likely to go up to 2% in FY20 from the 0.7% estimated for FY19.

It can be noted that the low food prices have been one of the prime factors which has aided the RBI to be more accommodatory in its rate setting recently.

As per the report, low food prices in the last few months can be attributed to the prices of cereals and vegetables which have been low for some time.

Deregulation of markets, which saw delisting of vegetables from the Agriculture Produce and Marketing Committee Act (APMC) in 14 states, has helped the vegetable prices.

In the case of cereals, "active food management" policies have helped, and the government released buffer stocks in large quantities and went in for higher imports on this front.

Going forward, the food inflation is unlikely to shoot up sharply unless there is some shock related to weather events, the reports noted.

Now how this pans out going forward remains to be seen. Meanwhile, we will keep you updated of the developments from this space.

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


Sensex Trades in Red, Jet Airways in Focus, and Top Stocks in Action
Pre-Open

On Monday, share markets in India opened on a negative note and ended the day in red after an dull day of trading.

The BSE Sensex closed lower by 356 points to end the day at 37,808. While the broader NSE Nifty ended down by 103 points, to end the day at 11,354 points.

Among BSE sectoral indices, realty stocks fell the most by 1.8%, followed by bank stocks at 1.3%. Tata Motors and Yes Bank were among the top losers.

Top Stocks in Action Today

Dr Reddy's share price will be in focus today as the USFDA completed audit of R&D facility of Aurigene Discovery Technologies, a wholly owned subsidiary of Dr. Reddy's Laboratories, situated at Hyderabad. No FDA 483 was issued at the end of inspection.

PFC share price is likely to be in focus as it completed the acquisition of the government's 52.6% stake in Rural Electrification Corp for Rs 145 billion.

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Jet Airways Takes Flight

On Monday, Jet Airways' share price went up by over 12.5% as it was reported that founder and principal promoters Naresh Goyal and his wife, Anita Goyal would step down from the board.

As per an article in The Economic Times, the debt-laden airline's lenders' consortium may invoke the entire 51% stake of Naresh Goyal in the airline and start looking for a new buyer in the weeks to come.

Here's an excerpt from the article:

  • The current CEO Vinay Dube is expected to stay on and steer Jet out of the current crisis.

    Former SBI managing director and a former Jet Airways board member Srinivasan Vishvanathan may be invited to join the airline's top leadership. Vishvanathan was on Jet's board as an Independent Director till August 2018 for nearly three years.

Reportedly, this development occurred after Etihad expressed its desire to exit the airline by formally asking State Bank of India (SBI) to purchase its stake in the airline.

In 2013, Jet Airways survived a similar crisis when Abu Dhabi's Etihad Airways injected US$600 million of capital for a 24% stake in the airline, three London Heathrow slots and a majority share in Jet's frequent flyer programme. The infusion helped Jet pare down debt and fight growing domestic competition.

With more than US$1 billion of debt, Jet is struggling to stay afloat. It has delayed payments to banks, suppliers, pilots and lessors - some of which have forced the airline to ground as many as 40 planes.

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