Sensex Ends 490 Points Higher; Oil & Gas and Telecom Stocks Witness Buying

Indian share markets continued to witness buying interest and ended their trading session on a positive note. Gains were largely seen in the oil & gas sector and telecom sector, while stocks from the auto sector witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 490 points (up 1.3%) and the NSE Nifty closed higher by 150 points (up 1.3%). Both, the BSE Mid Cap index and the BSE Small Cap index ended the day up by 0.4%.

Asian stock markets finished on a negative note as of the most recent closing prices. The Hang Seng stood down by 0.5% and the Nikkei was trading down by 0.3%.

European markets were trading on a mixed note. The FTSE 100 was down by 0.4%. The DAX was trading up by 0.48%, while the CAC 40 was down by 0.2%.

The rupee was trading at 69.84 to the US$ at the time of writing.

Speaking of markets, the mood in the Indian stock market changes in a matter of months.

Till February 2019, mutual fund inflows were on a steady decline.

And that's when Tanushree had asked her readers to stay put and not give into the panic.

Holding and buying quality businesses during times of extreme pessimism goes a long way in creating long-term wealth.

The mutual fund data from the March 2019 certainly proves this point.

Rising Mutual Fund Inflows - Is the Market Correction Over?

As can be seen from the chart above, the net inflows into Equity fund in March 2019 (Rs 117 billion) are its highest levels since October 2018.

The reason could be people believing the Modi government will return to power.

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

  • While we recommended to not give into panic in February 2019, this time its euphoria we're recommending against.

    Don't fall into the greed trap.

    Hold on to your safe stocks and don't go looking for overvalued stocks. Maintaining your calm when everyone is losing theirs will help you build long-term wealth.

In the news from the macroeconomic space, sovereign bonds rallied in India after the central bank said it will resume open-market purchases of debt.

The yield on the benchmark 2029 debt fell 4 basis points to 7.43%, while that on the most-traded 2028 securities was down 6 basis points.

Note that high crude oil prices and the central bank taking a less dovish path than expected had pushed up 10-year yields in recent weeks.

In the news from the global financial markets, Sri Lanka's main stock index traded at its lowest since December 2012 today.

This came as investors sold the island nation's risky assets for the second day following deadly Easter Sunday attacks that killed more than 350 people.

The Sri Lankan stock index fell 3.63% yesterday. This was its worst drop in more than seven years. This was seen due to retail panic selling in its first trading day after the attacks.

In the news from the cement sector, ACC share price was in focus today. The stock of the company witnessed selling pressure today after it reported its March quarter results yesterday.

The company reported a 38.2% rise in its consolidated profit at Rs 3.5 billion for the first quarter ended March 2019.

The company's total income during the period under review was up 10.99% at Rs 40.8 billion as against Rs 36.7 billion in the corresponding period of the previous fiscal.

The company's cement realization, which stands at Rs 4,609 per tonne, improved by only about 0.8% on a quarter-on-quarter (QoQ) basis against about 2%, on average, improvement in pan-India realization during the same period.

Apart from above, market participants were tracking Indiabulls Housing Finance share price, UltraTech Cement share price and Tata Global Beverages share price as these companies announced their Q4FY19 results today.

You can also read our recently released Q4FY19 results: HDFC Bank, Mahindra Lifespace, Reliance Industries.

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

Sensex Trades Marginally Higher; Tata Motors Slips 5%
12:30 pm

Share markets in India are presently trading on a positive note. Sectoral indices are trading mixed with stocks in the realty sector, oil & gas sector and IT sector witnessing buying interest while automobile stocks and FMCG stocks are witnessing selling pressure.

The BSE Sensex is trading up by 85 points while the NSE Nifty is trading up by 27 points. The BSE Mid Cap index is trading down by 0.1% while the BSE Small Cap index is trading up by 0.1%.

The rupee is trading at Rs 69.90 against the US$.

The rupee declined 23 paise against the US dollar in early trade due to higher demand for the greenback from importers amid foreign fund outflows. A strengthening US dollar against major global currencies also affected rupee's trading pattern.

On Tuesday, the rupee gained 5 paise to settle at 69.62 against the US dollar. The domestic currency recovered from the day's low to close higher by five paise on some dollar selling by banks and exporters.

The Reserve bank of India (RBI) again received overwhelming response for its second three-year dollar-rupee swap auction where it received bids worth US$ 18.7 billion compared with its promise to take in $5 billion. With this move, the banking system will have cash injection of nearly Rs 600 billion.

Market participants are tracking UltraTech Cement share price, Bharti Infratel share price, and Indiabulls Housing finance share price as these companies are set to announce their Q4FY19 results later today.

You can also read our recently released Q4FY19 results: HDFC Bank, Mahindra Lifespace, Reliance Industries.

In the news from the energy sector, ONGC share price is witnessing buying interest today on expectations of strong earnings in the January-March quarter (Q4FY19).

Shares of Oil and Natural Gas Corporation (ONGC) hit a 6-month high of Rs 170, up 4%, in intra-day trade, extending its previous day's 4% gain on back of the above news.

The stock was trading at its highest level since October 4, 2018.

For the first nine months of FY19, the company had posted 62% year-on-year (YoY) jump in net profit at Rs 226.7 billion.

With crude clocking in an average of around US$ 62 per barrel, the company expects Q4FY19 to be a quarter with robust earnings, leading to highest-ever standalone profitability.

Note that crude oil prices have quietly creeped up.

Oil prices jumped as much as 3.2% to their highest level since late 2018 on news that the United States is likely to ask all importers of Iranian oil to end their purchases or face US sanctions. The surge in oil prices has been weighing on rupee.

Bond yields also hardened in the wake of rising oil prices.

Bond yields surged to over three-and-a-half-month high. The 10-year government bond yield ended at 7.475%, a level last seen on 11 January from its earlier close of 7.39%.

Moving on to another news, auto shares are under pressure today, with Tata Motors share price and Hero MotoCorp leading the pack of losers.

Maruti Suzuki share price is also among the top losers. Shares of India's top-selling car maker fell as much as 1.8% to Rs 6,925, its lowest since April 3.

Earlier this week, the company launched a new 1.2 litre DUALJET, DUAL VVT BS VI engine with next generation Smart Hybrid technology in Baleno, a premium hatchback.

The new BS VI compliant Baleno (Petrol) with Smart Hybrid will be available at NEXA showrooms across the country.

Note that automobile companies have shifted to low gear and demand has flattened across the board. NBFC crisis, followed by lower off-tick of volumes and increasing competition has taken a major toll on automobile original equipment manufacturer (OEMs).

According to reports, major dealers across the country have been burdened with high inventory prompting OEMs to re-align their production.

While private vehicles (PVs) have been facing stiff task with dealers across geographies grappling with higher inventory, commercial vehicles (CVs) are seeing some revival led by fresh disbursal by NBFCs.

Speaking of automobiles sector, one thing we must keep in mind is that not all auto companies will make money over time. And also, you shouldn't stay away from auto stocks altogether.

Even Tanushree Banerjee, Co-head of research at Equitymaster believes that there are businesses in this sector that you cannot ignore. She is particularly talking about the blue-chip auto stocks.

She believes, This could be the opportunity long term investors were waiting for.

Sensex Opens Higher; Oil & Gas Stocks Gain
09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.3% while the Hang Seng is down 0.4%. The Nikkei 225 is trading flat. Meanwhile, the S&P 500 index and the Nasdaq registered record closing highs after a broad-based rally on Tuesday, as a clutch of better-than-expected earnings reports eased concerns about a slowdown.

Back home, India share markets opened on a positive note. The BSE Sensex is trading up by 110 points while the NSE Nifty is trading up by 24 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.2%.

Except consumer durables, healthcare and IT stocks, all sectoral indices have opened the day in green with telecom stocks and energy stocks leading the gainers.

The rupee is currently trading at 69.77 against the US$.

After the dream bull market of 2017, 2018 turned out to be a wet blanket.

But since March 2019, the Indian markets have rallied sharply. As a result, India managed to outperform most of the other major economies during the second half of the financial year 2018-19 (H2: 2018-19).

The chart below shows the performance of the some of the major world economies during H2: 2018-19 in dollar terms.

Indian Stock Markets Outperform Most Peers

From October 2018 to March 2019, the BSE Sensex increased by 6.8% in rupee terms and 11.7% in dollar terms.

Brazil, Indonesia and China are the only other major economies that did better than India during this period.

Will the trend continue going forward? Let's wait and watch...

Cement stocks opened the day on a mixed note with Mangalam Cement and Heidelberg Cement leading the gainers. In the latest development, Cement maker ACC reported a 38.2% increase in its consolidated profit at Rs 3.5 billion for the first quarter ended March 2019, helped by increase in sales volume.

The company had posted a consolidated profit of Rs 2.5 billion in the January-March quarter a year ago.

ACC's total income during the period under review was up 11% to Rs 40.8 billion as against Rs 36.7 billion in the corresponding period of the previous fiscal.

The company, which follows January-December period as financial year, reported its total expenses at Rs 35.6 billion as against Rs 33 billion, up 7.8%.

ACC's cement sales volume was up 5.6% to 7.5 million tonne in the January-March quarter as against 7.1 million tonne.

During the quarter, revenue from cement segment was at Rs 35.9 billion, up 6.9%, as against Rs 33.6 billion in the year-ago period.

ACC's earning from ready mix concrete business was also up 18.5% to Rs 3.9 billion as against Rs 3.3 billion.

On the outlook, the company said, predictions of a normal monsoon augur well for the rural economy. The government's continued thrust on infrastructure development as well as 'Housing for All' initiatives are expected to invigorate the construction sector and stimulate cement demand.

ACC share price opened the day down by 3.4%.

Moving on to the news from pharma sector. As per an article in a leading financial daily, the US health regulator has cautioned Lupin that the firm's Pithampur facility may be subject to regulatory or administrative action. Hence, it may withhold approval of any pending applications or supplements in which this facility is listed.

The company has received a letter from the US Food and Drug Administration (USFDA) classifying the inspection conducted at its Pithampur (Indore) Unit-2 facility in January 2019 as Official Action Indicated (OAI).

Lupin, however, said it does not believe that the classification would have an impact on disruption of supplies or the existing revenues from operations of this facility.

Now how this pans out going forward remains to be seen.

Earlier, the USFDA had classified the inspection conducted at its Somerset (New Jersey) facility in December 2018, as OAI, which means approvals of pending applications or supplements from the site maybe withheld.

To know more about the company, you can access to Lupin's Q3FY19 result analysis and Lupin's 2017-18 Annual Report Analysis on our website.

Lupin share price opened the day down by 2.4%.

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

Oil Prices, Neogen Chemicals IPO, and Top Stocks in Action Today

On Tuesday, share markets in India witnessed most of the selling pressure during closing hours and ended marginally lower after a volatile day of trading.

The BSE Sensex closed lower by 80 points to end the day at 38,565. Maruti Suzuki and Yes Bank were among the top losers.

While the broader NSE Nifty ended down by 19 points to end at 11,576.

Among BSE sectoral indices, telecom stocks fell the most by 1.4%, followed by automobile stocks and banking stocks.

Top Stocks in Action Today

Thomas Cook share price will be in focus today as the company was honored with the prestigious award of Best Tour Operator - International at the Times Travel Awards 2019, presented by VFS Global. The company has received this top award on both occasions since its inception in 2018.

Sunteck Realty share price will be in focus today as it is planning to raise funds by way of debt or equity or any other convertible securities etc. and through Qualified Institutional Placement (QIP).

Market participants will also track Aurionpro Solutions share price.

Reportedly, the company has signed a deal with a leading public-sector bank in India for setting up of self-servicing KIOSKS at various locations across India. The company shall supply, install and maintain self-servicing KIOSKS at more than 500 branches of the bank across India.

Results Corner

AU Small Finance Bank has reported a rise of 42.4% in its net profit at Rs 1182.4 million for the quarter under review as compared to Rs 830.4 million for the same quarter in the previous year.

Total income increased by 51.2% at Rs 10,074 million for Q4FY19 as compared Rs 6,661.7 million for the corresponding quarter previous year.

Tejas Networks share price has reported a rise of 32.3% in its net profit at Rs 358.6 million for the quarter ended March 31, 2019 as compared to Rs 271.2 million for the same quarter in the previous year.

Market participants will track Bharti Infratel share price, Tata Elxsi share price, Ultratech Cement share price and Hexaware Technologies share price as these companies are set to announce their Q4FY19 results later today.

You can also read our recently released Q4FY19 results: HDFC Bank, Mahindra Lifespace, Reliance Industries.

From the IPO Space...

Specialty chemical maker Neogen Chemicals is all set for its initial public offer (IPO), which opens today. This would be the fourth company coming out with a public issue in the financial year 2019-20.

Neogen Chemicals is one of India's leading manufacturers of bromine-based, and lithium-based, specialty chemicals.

Company manufactures specialty organic bromine-based chemical compounds (Bromine Compounds) and other specialty organic chemical compounds as well as specialty inorganic lithium-based chemicals compounds (Lithium Compounds and together with the Bromine Compounds the Products).

Company had commenced the business operations in 1991, at Mahape, Navi Mumbai manufacturing facility with a few Bromine Compounds and Lithium Compounds.

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.

Rising Oil Prices

On Tuesday, oil prices hit their highest since November after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.

The United States on Monday demanded that buyers of Iranian oil stop purchase by May 1 or face sanctions, ending six months of waivers which allowed Iran's eight biggest buyers.

Before the imposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries at around 3 million barrels per day (bpd), but April exports have shrunk to below 1 million bpd.

Saudi Arabia is the world's top oil exporter and de facto leader of OPEC, which has led global supply cuts since the start of the year aimed at propping up crude prices.

The Organization of the Petroleum Exporting Countries and other producers including Russia, an alliance known as OPEC+, have been cutting output since January 1. They will decide in June whether to continue the arrangement.

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.