Sensex Ends 371 Points Higher; Banking and Finance Stocks Witness Buying
Closing

Indian share markets witnessed most of the buying interest during closing hours today and ended on a strong note.

Benchmark indices rose sharply in the afternoon session, backed by gains in private bank stocks and finance stocks.

At the closing bell, the BSE Sensex stood higher by 371 points (up 1.2%) and the NSE Nifty closed higher by 99 points (up 1.1%).

The BSE Mid Cap index and the BSE Small Cap index ended their day up by 0.8%.

On the sectoral front, gains were largely seen in the banking sector, finance sector and realty sector.

Asian stock markets ended on a mixed note today as oil continued its downward move on fears that global oil storage capacity could be over in few weeks due to weak demand.

As of the most recent closing prices, the Hang Seng was up 1.2% and the Shanghai Composite stood lower by 0.2%. The Nikkei was down 0.1%.

European shares hovered near two-week highs as strong earnings reports from companies, including Novartis and UBS, outweighed a slump in oil prices.

Gold prices are currently trading down by 0.6% at Rs 45,894.

The rupee is currently trading at 76.19 against the US$.

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Speaking of Indian share markets, the coronavirus impact has shaken markets worldwide. Indian stock markets have felt the full impact too.

For the BSE Sensex, FY20 was the second worst year post FY08, the year of the global financial crisis.

Good Time to Start Investing Now?

Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

History has shown that after years like the one we had just now, the next 3 years are good for the markets. In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

Moving on, market participants were tracking Axis Bank share price and Atul share price as these companies announced their March quarter results (Q4FY20) today.

You can read our recently released Q4FY20 results of other companies here: WiproTCSInfosysHDFC BankTata ElxsiACCCRISILMindtree.

In news from the energy sector, shares of oil marketing companies (OMCs) witnessed buying interest today after crude oil prices slumped overnight on concerns over scarce storage capacity and expectations that fuel demand may only recover slowly as coronavirus pandemic restrictions are gradually eased.

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Extending previous session's slide, US West Texas Intermediate (WTI) crude futures fell as much as 16%. WTI had plunged 25% on Monday.

Brent crude futures fell to a low of US$ 18.85.

Crude oil prices across the globe are in downtrend on higher supply pressure on swelling inventories while crude oil demand is at multiyear lows due to stalled world economy.

Last week, oil futures marked their third straight week of losses, with Brent ending 24% down and WTI off about 7%.

According to a Reuters report, prices have now fallen for eight of the past nine weeks.

What effects falling crude oil prices have on Indian stocks markets and the Indian economy remains to be seen. Meanwhile we will keep you updated on the latest developments from this space.

Moving on to news from the insurance sector, Life Insurance Corporation of India (LIC) said it underwrote the highest number of policies in over six years during the previous financial year despite a washed-out closing fortnight in March, when life insurers typically process higher volumes of business.

In terms of individual new business, LIC issued 21.9 million policies in the fiscal year.

The insurer's first-year premium income grew 25% to Rs 510 billion compared to an industry growth of about 11.6%, LIC said in a round-up of its performance in the just concluded financial year.

LIC collected single premium of Rs 219.7 billion and non-single premium of Rs 292.6 billion, with a mix of about 43% for single premium and 57% for non-single premium.

LIC said that its composite market share in number of policies touched 75.9% in 2019-20, increasing by 1.2% over the period.

In other news, HDFC Life Insurance company reported a 14.4% decline in its net profit for the quarter ended March, hurt by losses on investments.

The life insurer reported a net profit of Rs 3,117.1 million in the March quarter, compared with Rs 3,640.1 million in the same quarter a year ago.

The company's premium income in the quarter edged up 2.1% to Rs 104.6 billion from Rs 102.5 billion in the same period a year before.

The company has set up a Covid Reserve Fund with reserves to the tune of Rs 410 million, covering around 4,500 lives.

The company's board also approved fund raising of up to Rs 6 billion via non-convertible debentures (NCDs).

HDFC Life Insurance share price ended the day up by 0.3%.

Speaking of the insurance sector, this is one sector which is a clear outperformer in this volatile market.

With the huge future potential of the sector, the outperformance is not surprising. India's life insurance penetration i.e. insurance premiums as a percentage of GDP, is very low compared to the global average.

The industry is expected to grow at a CAGR of 11-13% over the next five years. India's large youth population and growing awareness about insurance is bound to accelerate growth.

As per Tanushree, this is one of the megatrends that will help what she calls the Rebirth of India.

She has identified the 7 best stocks that will profit from the Rebirth of India. You can read about these top 7 stocks here.

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


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

Share markets in India are presently trading on a positive note. The BSE Sensex is trading up by 148 points, while the NSE Nifty is trading up by 43 points.

The BSE Mid Cap index is trading up by 0.4%, while the BSE Small Cap index is trading up by 0.7%.

Sectoral indices are trading mixed with stocks in the finance sector and banking sector witnessing buying interest, while energy stocks are witnessing selling pressure.

Gold Prices are currently trading down by 0.9% at Rs 45,773.

The rupee is trading at Rs 76.39 against the US$.

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As the Coronavirus pandemic continues to haunt the global financial markets, the rupee has been hit badly.

In a recent article titled The Sharp Fall in Indian Rupee: 6 Points to Know, we dive deeper and look at the factors behind rupee's depreciation.

Speaking of ongoing stock market crash, our special report, How to Trade the Coronavirus Crash, is the most comprehensive report on how to trade the coronavirus, both from a short-term and long-term perspective. You can claim your FREE copy here...

Moving on, market participants are tracking Axis Bank share price and Atul share price as these companies are scheduled to announce their March quarter results (Q4FY20) later today.

You can read our recently released Q4FY20 results of other companies here: WiproTCSInfosysHDFC BankTata ElxsiACCCRISIL.

In news from the mutual funds space, Franklin Templeton Mutual Fund on Monday said it is committed to returning investor money at the earliest.

The asset manager shut down its six schemes last week on Thursday. Reportedly, the six debt schemes had assets under management of over Rs 250 billion.

It said that winding up of the schemes does not mean that investor money is lost.

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The fund has also marked down its Fund-of-Fund (FoF) exposure by 50% to the debt schemes.

In other news, as per an article in The Economic Times, Franklin Templeton Mutual Fund was pushing distributors to sell the six debt schemes just before the fund house announced the decision on April 23.

The asset manager had launched a sales campaign for distributors that required them to push Systematic Transfer Plans (STPs) - a system that involves a regular shift of money from a debt scheme to mostly an equity scheme - in these products among others for additional commissions.

The report stated that the fund house promised to pay an additional trail brokerage fee of 10 basis points to distributors who mobilised money between April 1 and September 30.

Yesterday, the Reserve Bank of India (RBI) announced Rs 500 billion liquidity support for mutual funds (MFs).

Under this special liquidity facility scheme, the RBI will conduct repo operations of 90 days tenor at the fixed repo rate. The facility will be on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday.

The scheme will be available from 27 April till 11 May.

The above move comes after Franklin Templeton mutual fund decided to shut down its debt schemes.

Speaking of mutual funds, Ajit Dayal, founder of Quantum group, talks about the corruption in the Indian mutual fund industry, in his latest article.

You can check the same here.

Also, here's what Tanushree Banerjee wrote about mutual funds in one of the editions of The 5 Minute WrapUp...

  • After a few hiccups in the first half of this fiscal, strong inflows into mutual funds have taken the industry's AUM to a new high.

    Can we call it a saturation point?

    Far from it!

    The total AUM of India's mutual fund industry is just about 13% of India's GDP.

    This megatrend of financialisation of savings has a long runway ahead of it.
New High for Mutual Fund AUM

As per Tanushree, this is one of the megatrends that will help what she calls the Rebirth of India.

She has identified the 7 best stocks that will profit from the Rebirth of India. You can read about these top 7 stocks here.

Moving on, Just Dial share price is in focus today. Stock of the company rallied 10% today after the company announced that it will consider share buyback proposal on Thursday.

In an exchange filing on Monday after market hours, the company said, "A meeting of the board of directors of Just Dial will be held on Thursday, April 30, 2020 to inter-alia consider and approve the proposal for buy-back of fully paid up equity shares of the company and matters necessary and incidental thereto."

Last week, the markets regulator had eased the 12-month cooling-off period that companies have to observe between buybacks and equity fundraising.

A company is restricted from raising further capital for one year from the expiry of the buyback period.

The market regulator said that "to enable quicker access to capital, it has been decided to temporarily relax the period of restriction provided in regulation 24(i)(f) of the buyback regulations. Accordingly, the words "one year" shall be read as "six months" in the said regulation."

Many companies have launched share buybacks amid a sharp fall in their stock prices. Some of these companies include Motilal Oswal Financial ServicesDelta CorpDalmia Bharat, and Emami.

Speaking of buybacks, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible use it to your advantage to rake in some cash.

As per Rahul Shah, co-head of Research, investors should not assume buybacks are always good. Here's an excerpt of what he wrote in one of the editions of The 5 Minute Wrapup:

  • The reason behind the buyback must be investigated. At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.

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


Sensex Opens Higher; Banking Stocks Rally
09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.6% while the Hang Seng is down 0.2%. The Nikkei 225 is trading down by 0.6%. Stocks rose across the globe on Monday as investors cheered news that more countries and US states were looking to ease lockdowns and the Bank of Japan expanded its stimulus program.

Back home, India share markets open higher. The BSE Sensex is trading up by 327 points while the NSE Nifty is trading up by 95 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.8% and 0.7% respectively.

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

The rupee is currently trading at 76.19 against the US$.

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Moving on, gold prices are currently trading up down 0.7% at Rs 46,191.

Gold fell today as risk appetite was boosted by plans of some countries to ease coronavirus curbs in a phased manner, but prices held above the key US$1,700 per ounce level amid hopes for more stimulus to cushion the fallout from the pandemic.

Spot gold eased 0.7% to US$1,702 per ounce. US gold futures fell 0.3% to US$1,719 per ounce.

Speaking of gold, you will be surprised to know that the safe haven has outperformed equities over a 15-year period.

Have a look at the chart below:


An equal amount of Rs 100 invested in both gold and Sensex in 2004 would have generated higher returns in gold by a wide margin.

Your total investment in gold and Sensex would be valued at Rs 687 and Rs 410, respectively.

So, investors in gold are happier than investors in Sensex or equities at this moment.

Also speaking of gold, in his latest video, Vijay Bhambwani explains why gold prices will go higher in the coming days.

You can tune in here: The Price of Gold Will Go Higher.

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Moving on to another news. Crisil has cut its projections for India's economic growth rate to 1.8%, from 3.5% it had earlier predicted for 2020-21.

Its parent Standard & Poor's has (S&P) forecast the world economy to contract 2.4%, against its earlier estimates of 0.4% growth.

Crisil had a gross domestic product (GDP) growth estimate of 6% for FY21, which was revised to 3.5% in late March.

Among the major economies, India and China are the only exception to the declining economic activities in 2020 or FY21 in India's case.

The agency projected total losses of Rs 10 trillion or Rs 7,000 per person due to the disastrous lockdowns to control the Covid-19 pandemic.

Now, how this pans out going forward remains to be seen. Meanwhile, we will keep you updated on 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 Ends Higher, RBI's Support to Mutual Funds, Stocks in Focus, and Top Cues to Track Today
Pre-Open

Indian share markets ended on a strong note yesterday, tracking positive global cues.

Global stock markets were trading on a positive note yesterday, ahead of a busy week for earnings and central bank meetings. The Federal Reserve and the European Central Bank are scheduled to meet later in the week.

Buying interest was also seen as the RBI announced a Special Liquidity Facility (SLF) for mutual funds worth Rs 500 billion.

At the closing bell yesterday, the BSE Sensex stood higher by 416 points (up 1.3%) and the NSE Nifty closed higher by 128 points (up 1.4%).

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.4%.

On the sectoral front, gains were largely seen in the banking sector, finance sector and FMCG sector.

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Top Stocks in Focus Today

Market participants will be tracking IndusInd Bank share price, Ambuja Cement share price and HDFC Standard Life Insurance share price as these companies announced their March quarter results (Q4FY20) yesterday.

From the IT sector, Mindtree share price will be in focus today as the company posted 4.3% quarter-on-quarter (QoQ) revenue growth at Rs 20.5 billion Q4FY20.

It posted a net profit of Rs 2,062 million, a rise of 4.7% sequentially.

The IT firm reported revenues at US$ 278.4 million, a 1.9% rise in constant currency term over the previous quarter.

The company's board also recommended a final dividend of Rs 10 per equity share of face value Rs 10 for the financial year ended March 31, 2020.

To know more about the company, you can read Mindtree's Q4FY20 result analysis on our website.

You can check recently released Q4FY20 results of other companies on our website here: WiproTCSInfosysHDFC BankTata ElxsiACCCRISIL.

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RBI Announces Rs 500 Billion Liquidity Support for Mutual Funds

The Reserve Bank of India (RBI) announced Rs 500 billion liquidity support for mutual funds (MFs).

Under this special liquidity facility scheme, the RBI will conduct repo operations of 90 days tenor at the fixed repo rate. The facility will be on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday.

The scheme will be available from 27 April till 11 May.

In a release, the RBI said, "Heightened volatility in capital markets in reaction to Covid 19 has imposed liquidity strains on mutual funds which have intensified in the wake of redemption pressures related to closure of some debt MFs and potential contagious effects there from".

Here are some key takeaways from RBI's special liquidity facility:

  • This special repo window will be available to all liquidity adjustment facility (LAF) eligible banks against eligible collateral and can be availed only for on-lending to mutual funds.
  • The eligible banks may place their bids electronically on the CBS platform between 9 AM and 12 noon every day.
  • In case of over-subscription of the notified amount on any given day, the allotment will be done on pro-rata basis. RBI will, however, reserve the right to inject marginally higher amount than the notified amount due to rounding effects.
  • The minimum bid amount would be Rs 10 million and multiples thereof. RBI will reject bids of the participant if the total bid amount submitted by the participant exceeds the notified amount of the issue.

The above move comes after Franklin Templeton mutual fund decided to shut down debt schemes like Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund.

Last week, it was reported that RBI could be looking at a special window to help MFs meet the redemption pressure.

A similar window was opened by RBI for banks to meet the liquidity requirement of mutual funds in 2008 and 2013.

In 2008, the central bank opened a special 14-day repo window of Rs 200 billion to enable banks to raise money and lend to the funds, but received only four bids for Rs 35 billion.

In 2013, RBI opened a special three-day repo window that allowed banks to borrow a total of Rs 250 billion at a rate of interest of 10.25% to help mutual funds tide over their liquidity problems.

What effects the central bank's move have on Indian stock markets and the Indian economy in the coming days remains to be seen. Stay tuned for more updates from this space.

Speaking of mutual funds, here's what Tanushree Banerjee wrote about it in one of the editions of The 5 Minute WrapUp...

  • After a few hiccups in the first half of this fiscal, strong inflows into mutual funds have taken the industry's AUM to a new high.

    Can we call it a saturation point?

    Far from it!

    The total AUM of India's mutual fund industry is just about 13% of India's GDP.

    This megatrend of financialisation of savings has a long runway ahead of it.
New High for Mutual Fund AUM

As per Tanushree, this is one of the megatrends that will help what she calls the Rebirth of India.

She has identified the 7 best stocks that will profit from the Rebirth of India. You can read about these top 7 stocks here.

Auto Industry to Post Zero Sales in April

In news from the automobile sector, as per an article in The Economic Times, the Indian automobile industry is set to post zero sales in April for the first time in history, as factories and dealerships are shut due to the nationwide lockdown.

The fall will weigh on the economy as well.

Here's an excerpt from the article...

  • Automakers' troubles will weigh on the overall economy as well.

    The sector employs more than 40 million people directly or indirectly, as well as contributes over 8% to the country's GDP and 15% to the government's tax collection.

Industry leaders including Maruti Suzuki's RC Bhargava, TVS Motors' Venu Srinivasan, M&M's Pawan Goenka and other leaders aren't expecting much improvement in sales next month as well, and have warned of a prolonged crisis in the sector because of the impact of Covid-19 on the economy and consumer sentiment.

Last week, the government had allowed factories outside Covid-19 hotspots to start operations, but automakers have yet to restart their plants as they are waiting for the ecosystem of suppliers, dealers and financiers also to open for business.

Several leading automakers said that they are not in a hurry to resume production for the domestic market as there would be supply chain management issues and there was sufficient stock in their channels to serve any pent-up demand once the lockdown ended.

Society of Indian Automobile Manufacturers (SIAM) president Rajan Wadhera has suggested opening of the market in phases. "We must begin by opening dealers in semi urban/rural areas, to start selling motorcycles, three-wheelers and small commercial vehicles to start the cash cycle," he said.

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

FPIs Continue to Move Out of Indian Capital Markets

Remaining risk-averse amid the coronavirus pandemic, overseas investors have withdrawn net Rs 103.5 billion from Indian capital markets in April so far.

Between April 1-24, foreign portfolio investors (FPI) pulled out a net sum of Rs 68.2 billion from equities and Rs 35.3 billion from the debt segment. The total net outflow stood at Rs 103.5 billion.

However, the quantum of outflows has reduced from March, when FPIs had withdrawn a record Rs 1.1 trillion on net basis from Indian markets (both equity and debt).

Emerging markets are considered to be a riskier investment destination and more prone towards crises of this magnitude.

With low-risk appetite, foreign investors drift towards safer investment avenues and safe havens such as US$ and gold. Earlier this month, gold prices went on to hit a record high, rising above the Rs 47,000-mark, tracking global rates.

In one of his recent videos, Vijay Bhambwani explains why gold prices will go higher in the coming days.

You can check the same here: The Price of Gold Will Go Higher

Speaking of Indian share markets and the coronavirus sell-off, our special report, How to Trade the Coronavirus Crash, is the most comprehensive report on how to trade the coronavirus, both from a short-term and long-term perspective. You can claim your FREE copy here...

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