Sensex Ends 324 Points Lower; Metal and Telecom Stocks Witness Selling
Closing

India share markets witnessed selling pressure during closing hours and ended their trading session on a negative note.

At the closing bell, the BSE Sensex stood lower by 324 points (down 0.8%) and the NSE Nifty closed down by 84 points (down 0.7%). The BSE Mid Cap index ended the day down 0.6%, while the BSE Small Cap index ended the day down 0.1%.

Sectoral indices ended in the red with stocks in the metal sector and telecom sector witnessing most of the selling pressure.

The rupee was trading at 70.23 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 0.9% and the Shanghai Composite was down by 2.4%. The Nikkei 225 was up 0.5%.

European markets were trading on a negative note. The FTSE 100 was down by 0.3%. The DAX was trading up by 0.04%, while the CAC 40 was down by 0.17%.

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 automobiles sector, Maruti Suzuki share price was in focus today as the country's largest passenger vehicle maker reported a 5% year-on-year (YoY) degrowth in March quarter profit. The fall here was seen on the back of weak operating performance and muted sales volume.

Net profit during the quarter declined to Rs 17.9 billion, from Rs 18.8 billion in same period last year.

The company said that this quarter was marked by adverse foreign exchange rates and commodity prices, higher depreciation and higher sales promotion expenses partially offset by cost reduction efforts.

On a standalone basis, revenue from operations grew by 1.4% YoY to Rs 214.6 billion in Q4 with sales volume degrowth of 0.7% YoY.

At operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 25% YoY to Rs 22.6 billion and margin contracted 369 bps to 10.55% in January-March period, hit by adverse forex variations.

The company sold 4,58,479 vehicles during the quarter.

The company recommended a dividend of Rs 80 per share for financial year 2018-19, the same as that of last year.

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.

Also, 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.

In the news from the telecom sector, Dish TV India share price was in focus today as Telecom regulator Telecom Regulatory Authority of India (TRAI) has directed the company to comply with the provisions of the new framework for broadcasting and cable TV services, acting on consumer complaints pertaining to the operators' specific offering and grievance redressal helpline.

As per complaints, the DTH operator is forcefully offering a bouquet of free-to-air channels with no choice to subscribers and without their consent, the TRAI directive said on its website.

TRAI, which has promised strict action against those cable TV and direct-to-home (DTH) players who are found violating its new tariff order and regulatory regime, had earlier this week also pulled up Bharti Telemedia on similar grounds.

How this development pans out remains to be seen. Meanwhile, we will keep you updated on all 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 Higher; Ultratech Cement Surges on Strong Q4 Result
12:30 pm

Stock markets in India are presently witnessing buying interest. The BSE Sensex is trading up by 151 points and the NSE Nifty is trading up by 56 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading up by 0.2% and 0.5% respectively.

Among the sectoral indices, telecom stocks and metal stocks are witnessing selling pressure, while consumer durables stocks and power stocks are leading the pack of gainers.

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...

In the news from the cement sector. Ultratech Cement share price surged over 6.3% after it reported a consolidated profit after tax (PAT) at Rs 24.4 billion for the year ended 31 March 2019.

Revenue from operations for the fiscal stood at Rs 367.8 billion as compared to Rs 305.4 billion in the previous year.

UltraTech stated that its result for the quarter and the financial year ended March 2019, are not comparable with the previous periods due to merger of Binani Cements into the company, which has now been named as UltraTech Nathdwara Cements.

The fourth quarter earnings also include results from cement plants acquired from Jaiprakash Associates and Jaypee Cement Corp, the company stated.

For January-March quarter, the cement maker's consolidated PAT increased to Rs 10.1 billion versus Rs 4.5 billion in the same quarter a year ago. The total revenue stood at Rs 107.4 billion from Rs 91.7 billion in the corresponding period previous fiscal.

The company's operating profit (EBITDA) also increased by 30% to Rs 24.6 billion as compared to Rs 18.9 billion in FY18.

During March quarter, domestic sales volume jumped 16%, helped by 100% utilization of clinker capacity and cement grinding facility in Madhya Pradesh.

Moving on to the news from the pharma sector. As per an article in a leading financial daily, Glenmark Pharma has received approval from Russia's Healthcare Ministry to market Momate Rhino metered nasal spray as an over-the-counter (OTC) product.

It is used for the treatment of seasonal and perennial allergic rhinitis in patients above 18 years of age.

Reportedly, allergic rhinitis affects a significant number of people in Russia. Hence, the approval to market Momate Rhino as an OTC product paves way for the company to widen patient accessibility of this medicine, which is particularly important at the start of the allergy season.

According to IQVIA, Glenmark ranked 41st in the retail segment of the Russian pharmaceutical market as of MAT February 2019.

In the respiratory space, Glenmark is ranked 4th among the companies present in the expectorants market in Russia as of MAT February 2019. The company is ranked 10th in the retail dermatology market in the country.

To know more about the company, you can access to Glenmark Pharma's latest result analysis and Glenmark Pharma's Stock Analysis on our website.

At the time of writing, Glenmark pharma share price was trading up by 0.8%.

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


Indian Share Markets Open Flat; Rupee Hits 70-Mark Again
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 flat. The Nikkei 225 is trading up by 0.4%. Meanwhile, The S&P 500 slipped on Wednesday after ending the previous session with a record and the Nasdaq failed to hold all-time highs reached earlier in the day while investors waited for more earnings reports.

Back home, India share markets opened on a flat note. The BSE Sensex is trading down by 32 points while the NSE Nifty is trading down by 6 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.1%.

Except telecom and IT stocks, all sectoral indices have opened the day in green with power stocks and bank stocks leading the gainers.

The rupee is currently trading at 69.95 against the US$.

The broad-based dollar rally continued to hammer the rupee, indicating that the local currency could face further downward pressure.

The rupee closed at 69.87 a dollar on Wednesday, down from its previous close of 69.62.

A day after the successful dollar-rupee swap auction, the second in as many months, the rupee is looking a tad fragile again.

The rising crude and the subsequent fear of inflation creeping back have cast a shadow on the rupee.

Through the auction, Reserve Bank of India (RBI) had offered to buy US$5 billion from banks to improve rupee liquidity during the election season but received an overwhelming response with bids worth US$18.7 billion.

The spurt in crude price has left the rupee on a roller-coaster. On Wednesday, it slipped further to 69.98 a dollar, but regained some lost ground by the close. Brent crude futures dropped a little but are still hovering over US$74 a barrel.

Crude oil prices for spot delivery have already hit a six-month high after the US said it would end all exemptions for sanctions against Iran, asking countries such as India and China to halt oil imports from Tehran from May or face punitive action from Washington.

Reportedly, any further increase in crude oil prices will put pressure on India's exchequer. A US$10 a barrel increase in oil prices impacts India's current account deficit by around US$15 billion (50 basis points of GDP). That will, in turn, put more pressure on the rupee.

Notably, crude oil prices have quietly creeped up.

Oil prices jumped as much as 3.2% to their highest level since late 2018.

As you know, rising crude oil prices have a big impact on the country's economy as India imports over 70% of its energy needs.

Rise in crude oil increases input costs for dependent firms. It also means rising inflation. Rising inflation means rising interest rates.

It also puts pressure on the government to cut excise duty, thereby impacting its revenues. We have already seen that happening.

Research Analyst, Richa Agarwal believes that this has the potential to bring down sentiments in the domestic markets. She further believes that, if oil prices continue their upward march in a tight global environment, a broader correction in the sentiment fueled domestic market cannot be ruled out.

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

Moving on to the news from pharma sector. As per an article in a leading financial daily, IPCA Laboratories has entered into an agreement to acquire Ramdev Chemical for Rs 1.1 billion (US$15.5 million) in a cash deal aimed at growing its active pharmaceutical ingredients (API) business.

Palghar-based Ramdev Chemical is engaged in the business of manufacturing and marketing of advanced drug intermediates, fine chemicals and custom synthesis molecules. Incorporated in 1999, Ramdev Chemical exports its products to countries including the US, UK, Japan, Germany and Canada.

IPCA said that the buyout will boost its products basket with the possibility of forward-integrating them with its dosage formulations business.

Ipca Labs manufactures branded and generic formulations, and bulk drugs. Its investors include private equity firm ChrysCapital and multi-stage investor SAIF Partners.

The six-decade-old company had last October acquired an 80% stake in US drug marketing company Bayshore Pharmaceuticals LLC for US$10.2 million (Rs 750 million) in cash to commercialize its registered generic drugs in the US.

Earlier in the year, it had bought American pharmaceutical company Pisgah Labs for US$9.7 million.

In 2015, the company had acquired a 19% stake in Hyderabad-headquartered Krebs Biochemicals & Industries Ltd. The year before, the company had acquired a manufacturing plant in Indore from Alpa Labs for Rs 717.1 million (US$12 million at the time).

As per the reports, ChrysCapital had first bought a stake in IPCA in 2013. It increased its stake in 2015.

To know more about the company, you can access to IPCA's Q3FY19 result analysis and IPCA's Stock Analysis on our website.

IPCA Labs share price opened the day up by 0.1%.

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


Rising Crude Oil Prices, Developments in the Automobile Sector, and Top Cues in Focus Today
Pre-Open

Indian share markets ended their trading session on a strong note yesterday. 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 yesterday, 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%.

Top Stocks in Focus Today

From the cement sector, ACC share price will be in focus today. The stock of the cement maker was in focus yesterday after the company reported a 38.2% increase in its consolidated profit earlier this week 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.

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.

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.

From the pharma sector, Lupin share price will be in focus as 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).

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

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

From the Automobile Sector...

Maruti Suzuki share price will be in focus today. The stock of the company witnessed selling pressure yesterday and 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.

Also, 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.

Crude Oil Continues Its Momentum

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.