Indian Indices Dip After Record Rally; Sensex Ends 298 Points Lower
Closing

It was a volatile day for Indian share markets today.

The BSE Sensex and NSE Nifty opened at record high and went on to touch 40,000 and 12,000 for the first time ever in early trade today as counting of Lok Sabha Election 2019 showed Prime Minister Narendra Modi is set to return for another term as the NDA led majority seats according to the latest trends.

However, the momentum faded away during closing hours and Indian Indices ended their trading session deep in the red.

At the closing bell, the BSE Sensex stood lower by 298 points (down 0.8%) and the NSE Nifty closed down by 80 points (down 0.7%).

The BSE Mid Cap index ended the day down 0.2%, while the BSE Small Cap index ended the day down 0.1%.

Sectoral indices ended on a mixed note with stocks in the FMCG sector, metal sector and consumer durables sector witnessing most of the selling pressure. Telecom stocks and realty stocks were witnessing buying interest.

The rupee was trading at 70.05 against the US$.

--- Advertisement ---
What You Should Know Before Counting Starts Today...

The counting of votes for the national elections begins today...and in all likelihood, we will have the results today.

Now, the exit polls have already predicted a win for Modi...

News of which caused the markets to skyrocket 1,400 points in a day.

But we see a bigger opportunity here.

We see a massive wealth-creating opportunity in a few stocks...that could potentially gain in double or triple digits in the months to come.

You'll find more details on the top 4 stocks to buy here...
------------------------------

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 1.6% and the Shanghai Composite was down by 1.3%. The Nikkei 225 was down 0.6%.

European markets were also trading on a negative note. The FTSE 100 was down by 1.4%. The DAX was trading down by 1.9%, while the CAC 40 was down by 1.8%.

India began counting hundreds of millions of votes in its general election today, with a coalition led by Prime Minister Narendra Modi's party already preparing to form the next government.

The National Democratic Alliance (NDA), led by Modi's Hindu nationalist Bharatiya Janata Party (BJP), is expected to surpass the 272 seats needed to command a majority in the lower house of parliament, six of seven exit polls showed on Sunday.

Counting of votes began at 8 am in the morning and the final results in the polls, in which around 900 million Indians were eligible to vote, are due by the evening.

According to latest trends, BJP led majority seats and Prime Minister Narendra Modi looks set to return for a second term.

While the Indian stock market has given a big thumbs up to the re-election of the Modi government, what does this mean for the market going forward? And how can one play markets post elections?

Tanushree Banerjee answers these questions in today's edition of The 5 Minute WrapUp. You can read the entire article here: My Top 7 Stocks to Buy as Modi Returns to Power

Also, with Sensex touching the 40,000 mark today, does Sensex 1,00,000 sound outrageous from where we are right now?

History indicates a healthy rise in Sensex post elections. In the three elections prior to this, we have seen a government come back to power, and change hands but the Sensex has moved one way i.e. upwards.

Will the Sensex Be Close to 1,00,000 By the Next Election?

Will the Sensex Be Close to 1,00,000 By the Next Election?

Here's what Tanushree has to say about this...

  • There are bound to be bumps along the way. The move from 5,000 to 40,000 wasn't a straight one. We had a global recession, countless moments of doomsday predictions as well.

    But we got there.

    And now, with a stable government at the centre, the pace might pick up.

    I believe there are 50 irreversible trends that will the push Sensex to 1,00,000.

    And these 50 trends look set to play out soon.

    The ride might have already begun looking at the stock market's reaction to the election results.

    But it is still early days. And the time to hop on to the ride is right now!

We will keep you updated on the developments relating to the Lok Sabha Elections 2019 happening today.

Meanwhile, look out for the stocks that will rise fast when the tide of the market turns up.

Market participants were tracking GIC share price, Sun TV share price, Ramco Industries share price, and Novartis share price as these companies announced their Q4FY19 results today.

You can also read our recently released Q4FY19 Results: Bajaj Auto, PI Industries, GSK Pharma.

In the news from commodity space, crude oil prices dropped today amid surging US crude inventories and weak demand from refineries.

The Energy Information Administration (EIA) said US crude oil inventories rose last week, hitting their highest levels since July 2017, due to weak refinery demand.

Commercial US crude inventories rose by 4.7 million barrels in the week ended May 17, to 476.8 million barrels.

US crude oil production also rose by 100,000 barrels per day (bpd) to 12.2 million bpd, putting output near its record of 12.3 million bpd reached late last month.

Note that in its latest monthly report on the global oil market, the International Energy Agency (IEA) said that geopolitics and industry disruptions were clouding the outlook it believes and that the market balance is set to flip from surplus into deficit.

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

Also, speaking of crude oil, within the oil industry, there are signs of a further rise in output from the United States, where crude production has already surged by more than 2 million barrels per day (bpd) since early 2018, to a record 12.3 million bpd.

That has made the United States the world's biggest producer ahead of Russia and Saudi Arabia.

The number of rigs drilling for gas in the United States fell by 3 to 183 in the week to May 3, while oil-directed drilling rigs rose by 2 to 807, the reports noted.

Also, crude oil prices have quietly creeped up this year.

Oil prices have 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 Indian economy as it 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.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Sensex Hits 40,000 as Modi Set to Return for Another Term; Banking and Energy Stocks Witness Buying
12:30 pm

Share markets in India are presently trading on a positive note. The BSE Sensex and NSE Nifty opened at record high and went on to touch 40,000 and 12,000 for the first time ever in early trade today as Prime Minister Narendra Modi is set to return for another term as the NDA led in over 300 seats according to the latest trends.

Barring FMCG sector and consumer durables sector, all sectoral indices are trading on a positive note with stocks in the capital goods sector, banking sector and energy sector witnessing maximum buying interest.

The BSE Sensex is trading up by 329 points (up 0.8%), while the NSE Nifty is trading up by 127 points (up 1.1%). The BSE Mid Cap index is trading up by 0.7%, while the BSE Small Cap index is trading up by 0.4%.

The rupee is trading at Rs 69.63 against the US$.

In the news from the Lok Sabha Elections 2019, India began counting hundreds of millions of votes in its general election today, with a coalition led by Prime Minister Narendra Modi's party already preparing to form the next government.

The National Democratic Alliance (NDA), led by Modi's Hindu nationalist Bharatiya Janata Party (BJP), is expected to surpass the 272 seats needed to command a majority in the lower house of parliament, six of seven exit polls showed on Sunday.

--- Advertisement ---
What You Should Know Before Counting Starts Today...

The counting of votes for the national elections begins today...and in all likelihood, we will have the results today.

Now, the exit polls have already predicted a win for Modi...

News of which caused the markets to skyrocket 1,400 points in a day.

But we see a bigger opportunity here.

We see a massive wealth-creating opportunity in a few stocks...that could potentially gain in double or triple digits in the months to come.

You'll find more details on the top 4 stocks to buy here...
------------------------------

Counting of votes began at 8 am in the morning and trends are expected to be known by noon because of the use of computerised voting machines.

Final results in the polls, in which around 900 million Indians were eligible to vote, are due by the evening.

According to latest trends, BJP is near the 290-seat mark and Prime Minister Narendra Modi looks set to return for a second term.

Note that near term reactions to elections aside, stock markets in the longer run have been influenced by the Indian economy and growth in corporate earnings.

Indeed, despite the Congress win in 2004 (something not factored in by the markets), the Sensex has been on a major bull run since then.

This, during years when both the UPA and the NDA have been in power.

Despite governments changing hands in 2004 and 2014, the Sensex gave returns of 44% and 13% in a year respectively.

Even in 2009, when the same government retained power, Sensex was up by 18% in a year.

So, do you think there are good times ahead for Indian stock markets?

We will keep you updated on the developments relating to the Lok Sabha Elections 2019 happening today.

Meanwhile, look out for the stocks that will rise fast when the tide of the market turns up.

In the news from the banking sector, Bank of Baroda reported net loss for the March quarter at Rs 9.9 billion. The lender had reported net loss of Rs 31 billion in the year ago period.

Reports state that the loss was because of higher provisioning for bad loans.

Provisions and contingencies surged 93.2% from Rs 27.9 billion in the December quarter to Rs 54 billion in the three months ended March. Year on year, it was down 19.1% from Rs 66.7 billion.

Gross NPAs fell 33.5% from Rs 234.8 billion in the year-ago period to Rs 156.1 billion as of 31 March, 2019.

Bank of Baroda share price is presently trading up by 6.8%.

In other news, IndusInd bank share price is also in focus today. Shares of the lender surged 8% in early trade today on expectation that the bank would return to normal condition in terms of earnings momentum after the entire exposure to IL&FS was classified as non-performing asset (NPA) in the fourth quarter of fiscal 2018-19 (Q4FY19).

IndusInd bank reported 62% fall in net profit at Rs 3.6 billion for Q4FY19. The loss was reportedly due to higher provisioning for loans extended to IL&FS. It had a profit of Rs 9.5 billion in the year-ago quarter.

As per a leading financial daily, the profitability was impacted on account of high provision which stood at Rs 15.6 billion against Rs 3.4 billion in Q4FY18.

The entire exposure to the IL&FS became NPA and total additional provisions of Rs 11.2 billion were provided on this during the quarter. Also, the management clarified its exposure towards other stressed assets which is at 1.9%.

Speaking of banking sector, if there is any private sector bank that has severely underperformed in the last two years, it has to be Lakshmi Vilas Bank (LVB).

Look at the chart below.

Lakshmi Vilas Bank Down 60% from Its 2017 High

Lakshmi Vilas Bank Down 60% from Its 2017 High

Here's what Sarvajeet Bodas wrote about this in the recent edition of The 5 Minute WrapUp...

  • LVB declined by more than 50% in the last 2 years compared to the overall BSE Bankex showing gains of about 30%.

    Here's another interesting data.

    If you look at the shareholding pattern of LVB during this 2-year time frame, retail investors (Individual share capital up to Rs. 2 Lacs) have increased by 15%. The number of shares owned by them increased by 24%.

This is a typical example of retail investors catching a falling knife!

Apart from IndusInd bank, market participants are also tracking TVS Srichakra share price, Sun TV share price, and Eclerx services share price as these companies are set to announce their Q4FY19 results today.

You can also read our recently released Q4FY19 Results: Bajaj Auto, PI Industries, GSK Pharma.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Sensex and Nifty Open at Record Highs; Modi Takes Early Lead
09:30 am

Asian share markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.8% while the Hang Seng is down 1.2%. The Nikkei 225 is trading down by 0.8%. Wall Street's major indices dipped on Wednesday as inflamed trade tensions between the United States and China weighed on investor sentiment.

Back home, India share markets opened the day on a strong note as the counting of votes begin. The BSE Sensex is trading up by 515 points while the NSE Nifty is trading up by 137 points. The BSE Mid Cap index and BSE Small Cap index opened up by 1% and 1.1% respectively.

All sectoral indices have opened the day in green with realty, power, capital goods and bank stocks leading the pack of gainers.

India began counting hundreds of millions of votes in its general election today, with a coalition led by Prime Minister Narendra Modi's party already preparing to form the next government.

The National Democratic Alliance (NDA), led by Modi's Hindu nationalist Bharatiya Janata Party (BJP), is expected to surpass the 272 seats needed to command a majority in the lower house of parliament, six of seven exit polls showed on Sunday.

--- Advertisement ---
What You Should Know Before Counting Starts Today...

The counting of votes for the national elections begins today...and in all likelihood, we will have the results today.

Now, the exit polls have already predicted a win for Modi...

News of which caused the markets to skyrocket 1,400 points in a day.

But we see a bigger opportunity here.

We see a massive wealth-creating opportunity in a few stocks...that could potentially gain in double or triple digits in the months to come.

You'll find more details on the top 4 stocks to buy here...
------------------------------

Their predicted margin of victory is larger than surveys indicated in the run-up to the vote, when most polls showed the NDA would be the largest alliance but would fall short of an overall majority.

Counting of votes began at 8 am in the morning and trends are expected to be known by noon because of the use of computerised voting machines.

Final results in the polls, in which around 900 million Indians were eligible to vote, are due by the evening.

According to latest trends in the first half an hour of counting, BJP is leading in Uttar Pradesh, Himachal Pradesh and Madhya Pradesh. Union Home Minister Rajnath Singh is leading from Lucknow and Congress chief Rahul Gandhi is leading from Wayanad seat.

Interestingly, once the exit polls were released on Sunday, the markets reacted positively.

The Sensex notched up gains of more than 1,400 points.

Clearly, the prediction of a BJP-led NDA victory has fired up the markets.

But there are two things that history has shown us.

One, is the exit polls should be taken with a pinch of salt. The 2004 elections are a classic case in point where the exit polls predicted a BJP win, while the actual counting resulted in Congress-led UPA gaining clear majority.

In the Long Run, Elections Don't Influence the Stock Market

In the Long Run, Elections Don't Influence the Stock Market

Second, near term reactions to elections aside, stock markets in the longer run have been influenced by the Indian economy and growth in corporate earnings.

Indeed, despite the Congress win in 2004 (something not factored in by the markets), the Sensex has been on a major bull run since then.

This, during years when both the UPA and the NDA have been in power.

Moving on to the news from currencies space. The rupee is currently trading at 69.44 against the US$. On Wednesday, the rupee opened nearly unchanged at 69.70 and moved to 69.67 in early trade

The rupee ticked higher by 5 paise to 69.67 against the US dollar on Wednesday amid weakness in the greenback and easing crude oil prices.

Strong foreign institutional investor inflows and higher domestic equity markets improved sentiments for the rupee.

The rupee had appreciated by 2 paise to 69.72 against the US dollar in the previous session.

Rupee as well as bonds rallied after exit polls projected a major could be on its way for the NDA. Indian equities too rallied and witnessed its single-day gain since September 2013.

In the recent past, foreign fund inflows have aided the rupee while the central bank's efforts to ensure adequate liquidity in the banking system through forex swaps and open market bond purchases have helped bonds.

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


Lok Sabha Election Results 2019, Jet Airways Saga, and Top Cues in Focus Today
Pre-Open

Indian share markets ended their day on a positive note yesterday ahead of counting of Lok Sabha Election 2019 to be done today.

Gains were largely seen in the banking sector, oil & gas sector, and capital goods sector.

At the closing bell yesterday, the BSE Sensex stood higher by 140 points (up 0.4%) and the NSE Nifty closed higher by 28 points (up 0.3%).

The BSE Mid Cap index ended down by 0.2%, while the BSE Small Cap index ended the day up by 0.5%.

Lok Sabha Election Results

Market participants will be closely tracking the counting of Lok Sabha Election 2019 today.

Indian markets have so far completely lapped up the exit polls. They've risen sharply in the last 4 days as a result.

And given that exit polls are not always right, it will be very interesting to see what the market does in case of an upset.

Note that near term reactions to elections aside, stock markets in the longer run have been influenced by the Indian economy and growth in corporate earnings.

Indeed, despite the Congress win in 2004 (something not factored in by the markets), the Sensex has been on a major bull run since then.

--- Advertisement ---
What You Should Know Before Counting Starts Today...

The counting of votes for the national elections begins today...and in all likelihood, we will have the results today.

Now, the exit polls have already predicted a win for Modi...

News of which caused the markets to skyrocket 1,400 points in a day.

But we see a bigger opportunity here.

We see a massive wealth-creating opportunity in a few stocks...that could potentially gain in double or triple digits in the months to come.

You'll find more details on the top 4 stocks to buy here...
------------------------------

This, during years when both the UPA and the NDA have been in power.

Despite governments changing hands in 2004 and 2014, the Sensex gave returns of 44% and 13% in a year respectively.

Even in 2009, when the same government retained power, Sensex was up by 18% in a year.

So, do you think there are good times ahead for Indian stock markets?

We will keep you updated on the developments relating to the Lok Sabha Elections 2019 happening today.

Meanwhile, look out for the stocks that will rise fast when the tide of the market turns up.

Top Stocks in Focus Today

From the IT sector, Tech Mahindra share price will be in focus today as the company reported a 7.3% YoY drop in consolidated profit at Rs 11.3 billion for March quarter compared with Rs 12.2 billion in the same quarter last year.

From the pharma sector, Cipla share price will also be in focus today as the company today said its consolidated net profit more than doubled to Rs 3,576 million in March quarter from Rs 1,531 million in the same quarter last year.

Market participants will also be tracking Lupin share price as the company yesterday announced the launch of its Budesonide Inhalation Suspension, 0.5 mg/2 mL Single-Dose Ampules in the US market.

DHFL Stops Taking Fresh Deposits

Shares of Dewan Housing Finance Corporation Limited (DHFL) witnessed huge selling pressure yesterday and plunged as much as 18% in morning trade after the housing finance company said it has decided to temporarily stop taking fresh deposits and hold premature withdrawals from existing deposit schemes as it tries to manage its tight liquidity position.

The above move comes after the recent downgrade of the credit rating of DHFL's fixed deposit (FD) programme.

DHFL, in a notice sent out to distributors and financial planners, said that in view of the recent revision in the credit rating of our fixed deposit program, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect.

However, the company added, premature withdrawals would be allowed only in cases of medical or financial emergency if backed by proper documentation.

Note that DHFL's fixed deposit programme was downgraded by Brickwork Ratings India Ltd on Friday to BBB+ from AA- and had been put on credit watch with negative implications due to the limited build-up of liquidity. In its rating release, Brickwork Ratings pegged the size of DHFL's fixed deposit programme at Rs 120 billion.

Hinduja Group Considering a Bid for Jet Airways

Jet Airways share price will be in focus today as it was reported that the Hinduja Group is considering a bid for the debt-laden airline, which has been grounded for more than a month.

An investment by the Hinduja group is expected to offer a respite to Jet Airways, its employees, as well as lenders and investors. The group is led by billionaire brothers Gopichand and Srichand Hinduja, who are among the UK's wealthiest people.

The bidding process will start this week, having obtained the approval of key stakeholders including founder Naresh Goyal and Etihad airways.

So far, Etihad is the only party to have placed a bid. Its bid is also non-binding and subject to fulfilment of certain conditions by the lenders. Etihad, which holds a 24% stake in Jet Airways, has agreed to infuse up to Rs 14 billion into the carrier.

Also, the cash-strapped airline has seen a slew of top executives and board members leave the airline in the past few months. Last month, Nasim Zaidi quit his position as non-executive and non-independent director on the airline's board citing 'personal reasons' and 'time constraints'.

The airline's independent director, Rajshree Pathy also quit the board in April. Last week, top executive Gaurang Shetty, considered close to founder Naresh Goyal, also resigned from airline's board of directors.

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

India Volatility Index Shoots Up

If the India Volatility Index (VIX) score is anything to go by, we are in for a turbulent ride ahead.

The VIX has touched an all-time high on the back of election results to be announced today.

Overall, the uncertainty over the general elections, trade war threats between US and China and rising crude oil prices have all contributed to widespread fear among investors.

While the 2018 correction was mainly due to corporate governance issues back home, the threat of macro issues looms large in 2019.

For you, dear reader, it is important to ignore the short-term noise of the mainstream media.

While the volatility index is high, it is no indicator of the market direction. The index was high during 2014 as well, prior to the elections. Post that we had a multi-year bull run.

Co-head of research at Equitymaster, Tanushree Banerjee believes, safe stocks with strong fundamentals will do well regardless the short-term volatility.

In fact, the volatility might just give you an opportunity to load up on these quality businesses.

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