Sensex Ends 995 Points Higher; Banking and IT Stocks Witness Huge Buying
Closing

Indian share markets continued their momentum during closing hours today and ended on a strong note.

Benchmark indices witnessed gains and ended on a positive note with Nifty above 9,300 level and Sensex reclaiming its 31,000-mark.

At the closing bell, the BSE Sensex stood higher by 995 points (up 3.2%) and the NSE Nifty closed up by 285 points (up 3.2%).

The BSE Mid Cap index ended the day up by 0.5%, while the BSE Small Cap index ended up by 0.3%.

Sectoral indices ended on a positive note with stocks in the banking sector, finance sector and IT sector witnessing maximum buying interest.

Asian stock markets finished on a mixed note today. The Nikkei ended 0.7% higher while the Hang Seng ended 0.36% lower.

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China's central bank made a fresh cash injection into the interbank money market through reverse repos for a second straight day today, while it continued to keep the borrowing cost unchanged.

The People's Bank of China (PBOC) injected 120 billion yuan (US$ 16.8 billion) via seven-day reverse repos at 2.20%, same as the previous operation. According to the central bank's statement, the move was to counteract the impact from government bond issuance in order to keep banking system liquidity reasonably ample.

European stock markets were trading on a positive note. The FTSE index gained 1.58% and the DAX was trading up by 1.88%. European shares inched higher as investors focused on a fresh stimulus plan for the European Union, while renewed US-China tensions over Hong Kong tempered optimism about a global economic recovery.

The rupee is trading at 75.62 against the US$.

Note that stock markets around the world have witnessed one of the most volatile phases in 2020 so far.

One month we see a sharp decline followed by a sharp up move the next month.

One day we hear positive news of a vaccine for the virus. Another day, a WHO scientist says we might have to live with this virus for years.

Naturally, investors are confused as to what they should do? Buy, hold or sell their stocks.

In the video below, Girish Shetty, Research Analyst at Equitymaster, explains the current scenario and what are the type of stocks investors should buy, hold or sell in the current crisis.

Tune in to find out more...

In news from the energy space, the government has for the second time extended the deadline for bidding for privatisation of India's second-biggest oil refiner Bharat Petroleum Corp Ltd (BPCL) by over a month to July 31.

While the Cabinet had in November last year approved the sale of government's entire 52.98% stake in BPCL, offers seeking expression of interest (EoI), or bids showing interest in buying its stake, were invited only on March 7.

The EoI submission deadline was May 2, but on March 31 it was extended up to June 13.

The government today said this deadline is further being extended up to July 31.

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Note that the government of India is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 1,149.1 million equity shares, which constitutes 52.98% of BPCL's equity share capital along with transfer of management control to a strategic buyer (except BPCL's equity shareholding of 61.65% in Numaligarh Refinery Ltd). Numaligarh Refinery Ltd stake will be sold to a state-owned oil and gas firm.

The bidding will be a two-stage affair, with qualified bidders in the first EoI phase being asked to make a financial bid in the second round. Public sector undertakings (PSUs) "are not eligible to participate" in the privatisation, the offer document said. Any private company having a net worth of USD 10 billion is eligible for bidding and consortium of not more than four firms will be allowed to bid.

BPCL will give buyers ready access to 14% of India's oil refining capacity and about one-fourth of the fuel market share in the world's fastest-growing energy market.

We will keep you updated on how this bidding goes. Stay tuned.

Moving on to news from the commodity space, domestic gold prices extended their decline to the third day today, in line with a drop in global rates as risk sentiment improved.

June gold futures on Multi Commodity Exchange (MCX) slipped 0.6% to Rs 46,068 per 10 grams.

Tracking gold, silver futures on MCX also fell 0.5% to Rs 47,590 per kg.

In global markets, gold prices eased to two-week lows on optimism about the reopening of the world economy, though rising Sino-US tensions over Beijing's proposed security law for Hong Kong capped losses.

At the time of writing, spot gold was trading down by 0.2% at US$ 1,707.85 per ounce, after hitting its lowest level since May 13 at US$ 1,703 earlier in the session.

US gold futures were down 0.5% to US$ 1,697.60.

US President Donald Trump said on Tuesday Washington was working on a strong response to China's planned national security law for Hong Kong, adding it would be announced before the end of the week.

Speaking of gold prices, despite the recent fall in prices, the most recent contract for gold on MCX is up around 20%, on a year-to-date (YTD) basis. Here's how gold has performed in 2020 so far...

Gold Continues Rally in 2020

Earlier this month, gold prices hit a new high of Rs 47,980 tracking rally in global rates amid increasing US-China tensions and expectations of further stimulus from central banks. With this, gold rallied to its highest since October 2012, driven by economic damage concerns, US-China tensions, and massive monetary and fiscal stimulus.

Speaking of gold, in one of his videos, Apurva Sheth, lead chartist at Equitymaster, compares gold and bitcoin. He explains, which is the better asset in this difficult economic situation.

Tune in to know more: Gold or Bitcoin: What Will You Go With?

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


Sensex Zooms Over 600 Points; Nifty Trades Above 9,200 Mark
01:30 pm

Share markets in India have extended early gains and are presently trading on a strong note, lifted by private banks and finance stocks.

The BSE Sensex is trading up by 605 points, up 2%, at 31,150 levels. Meanwhile, the NSE Nifty is trading up by 174 points.

Shares of Axis Bank and ICICI Bank surged over 5%, while Bajaj Finance, Kotak Mahindra Bank and HDFC Bank gained in the range of 3-4%.

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Axis Bank gained after a report said private equity group Carlyle was in discussions with the lender for a fund infusion. As per reports, Carlyle may invest US$ 1 billion for an 8% stake in the bank.

On the sectoral front, gains are largely seen in the banking sector, finance sector, and IT sector.

Market participants are tracking Dabur share priceQuess Corp share price and Sun Pharma share price as these companies are scheduled to announce their March quarter results (Q4FY20) later today.

More details to follow in the upcoming commentary.


Indian Indices Extend Gains; Axis Bank and ICICI Bank Surge Over 4%
12:30 pm

Share markets in India have extended early gains and are presently trading higher. The BSE Sensex is trading up by 262 points, while the NSE Nifty is trading up by 73 points.

The BSE Mid Cap index and the BSE Small Cap index are trading on a flat note.

On the sectoral front, gains are largely seen in the banking sector, finance sector, and IT sector.

The rupee is trading at 75.64 against the US$.

Gold Prices are currently trading down by 0.6% at Rs 46,030.

Note that stock markets around the world have witnessed one of the most volatile phases in 2020 so far.

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One month we see a sharp decline followed by a sharp up move the next month.

One day we hear positive news of a vaccine for the virus. Another day, a WHO scientist says we might have to live with this virus for years.

Naturally, investors are confused as to what they should do? Buy, hold or sell their stocks.

In the video below, Girish Shetty, Research Analyst at Equitymaster, explains the current scenario and what are the type of stocks investors should buy, hold or sell in the current crisis.

Tune in to find out more...

Moving on, market participants are tracking Dabur share price, Quess Corp share price and Sun Pharma 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: Lakshmi MachineBirla CorporationBata India, Colgate, Honeywell Automation, Hawkins Cookers, Bayer Cropscience, JSW Steel, DCB Bank.

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In news from the economic space, Fitch ratings and CRISIL have drastically cut India's economic growth forecast in the current fiscal year due to a prolonged lockdown.

Both, Fitch and CRISIL projected the economy to contract 5%, from their earlier estimates of the economic growth at 0.8% and 1.8%, respectively.

In its latest report, CRISIL said that it expects the current quarter's GDP to shrink 25% year-on-year (YoY).

The rating agency said it would really be a long road to recovery and going back to the pre-Covid-19 trend level of gross domestic product (GDP) in India will not be possible for the next three fiscal years.

Reportedly, lockdown extension, higher economic costs, and an economic package that lacked muscle are the three key reasons why CRISIL downgraded the GDP forecast.

Meanwhile, Fitch ratings said India had had a very stringent lockdown policy that had lasted a lot longer than expected and incoming economic activity data had been spectacularly weak.

Note that the Indian economy was grappling with its own issues and COVID-19 has made matters worse.

The industry was facing demand problems, due to which business houses were reluctant to undertake capex plans. Unemployment was at its peak and exports were consistently down for several months.

India's GDP growth has been on a consistent decline after peaking out at 7.9% in Q4 of FY18 to 4.7% in Q3 of FY20. This is evident in the chart below:

The numbers are expected to have fallen further in Q4FY20 due to Covid 19.

Interestingly, there's a silver lining in all this. India can become an outsourcing hub. The global slowdown will mean that countries like the US, will be looking out for low-cost outsourcing destinations like India.

Further, a lot of global buyers have already shifted to India to source ceramics, home appliances, fashion, and lifestyle goods.

Meanwhile, as per the reports, around a thousand foreign manufacturers want to relocate their production to India, a country they see as an alternative to China.

Here's an excerpt from one of the articles, co-head of Research Tanushree Banerjee wrote on Indian economic recovery:

  • It's also a fact that India's importance in the global supply chain has never looked better. PM Modi himself referred to that.

    Therefore, utilising the stimulus package to tighten India's presence in the global supply chain will be the fastest way to move up the Swoosh index. Any delay or disregard would cost India dearly.

    True that Apple, Samsung and several smartphone manufacturers are already considering an expansion of their Indian capacities.

    But the land, labour, liquidity, and legal reforms cannot remain on paper if the Make in India dreams are to be realised.

    I expect to gather more cues about India's prospects on the Swoosh index over coming months.

Watch this space as Tanushree tracks these Rebirth of India megatrends closely.

Moving on to news from the chemical sector, shares of Deepak Nitrite surged over 5% today after the company reported an 88% jump in its consolidated net profit at Rs 1,723 million for the quarter ended March 2020.

The company had reported a profit of Rs 914.6 million in the year-ago period.

The company's revenue from operations rose 4.7% to Rs 10.6 billion for Q4FY20 as against Rs 10.1 billion in the corresponding quarter of the previous fiscal.

On standalone basis, revenues stood at Rs 5.3 billion in Q4FY20 as compared to Rs 4.9 billion in Q4FY19.

The company's profit before tax (PBT) came in at Rs 1.6 billion, up 84%. Profit after tax (PAT) stood at Rs 1.2 billion, up 106% YoY.

For the full year ended March 2020, the company's net profit rose to Rs 6,110.3 million, while sales rose 56.7% to Rs 42,297.1 million.

Deepak Nitrite share price is presently trading up by 1.3%.

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


Sensex Opens Flat; Banking and Telecom 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 0.6%. The Nikkei 225 is trading flat. US stocks closed higher on Tuesday on optimism about the development of coronavirus vaccines and a revival of business activity, but the S&P 500 failed to hold above the key psychological level of 3,000 points.

Back home, India share markets opened higher. The BSE Sensex is trading up by 69 points while the NSE Nifty is trading up by 25 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.3% and 0.4% respectively.

Sectoral indices are trading mixed with banking stocks and telecom stocks witnessing buying interest. Consumer durables and power stocks are trading in the red.

Moving on, gold prices are currently trading down 1.4% at Rs 46,322.

The rupee is currently trading at 75.66 against the US$.

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Yesterday, Indian rupee ended near day's high level at 75.66 per dollar, amid buying seen in the domestic equity market.

It opened higher by 27 paise at 75.68 per dollar versus Friday's close of 75.95.

In the current scenario, the path for the local currency looks bumpy.

Massive sell-off in equities and bonds led to a huge fall in rupee against the dollar in 2020.

The rupee hit a record low of 76.92 against dollar in April.

Most of the selling pressure for rupee was seen on the back of slump in equities and currencies globally. Investors were concerned that support measures from governments and central banks may be insufficient to halt the economic damage caused by the coronavirus pandemic.

Rupee Continues Downtrend

Moving on to the news from FMCG sector. As per an article in a leading financial daily, ITC has entered into a Share Purchase Agreement (SPA) to acquire 100% of the equity share capital of Sunrise Foods subject to fulfilment of various terms and conditions as specified in the SPA.

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Sunrise Foods is an Indian company primarily engaged in the business of spices under the trademark 'Sunrise'.

The proposed acquisition is aligned with ITC's strategy to rapidly scale up its FMCG Businesses in a profitable manner, leveraging its institutional strengths viz. deep consumer insight, a deep and wide distribution network, agri-commodity sourcing expertise, cuisine knowledge, strong rural linkages and packaging know-how.

The proposed acquisition will augment the company's product portfolio and is aligned to ITC's aspiration to significantly scale up its Spices business and expand its footprint across the country.

ITC share price opened the day down by 1%.

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


SGX Nifty Trades Positive, Crude Oil Sees Buying, FPI Equity Inflows Rise, and Top Cues in Focus Today
Pre-Open

Indian share markets ended marginally lower yesterday as benchmark indices gave up early gains and slipped into the red during the last hour of trading.

At the closing bell yesterday, the BSE Sensex stood lower by 63 points and the NSE Nifty closed down by 10 points.

The BSE Mid Cap index ended the day up by 1.2%, while the BSE Small Cap index ended up by 0.6%.

Sectoral indices ended on a mixed note with stocks in the telecom sector and IT sector witnessing selling pressure, while metal stocks witnessed buying interest.

SGX Nifty is currently trading up by 33 points, or 0.37% higher at 9,054 levels. Indian share markets are headed for a positive start today following the positive trend on SGX Nifty.

Asian stock markets witnessed buying yesterday as Prime Minister Shinzo Abe on Monday lifted the state of emergency for the entire nation and gave his support for a huge new stimulus package. Investors were also stunned by news last week that Beijing plans to implement a controversial national security law in the financial hub.

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Note that stock markets around the world have witnessed one of the most volatile phases in 2020 so far.

One month we see a sharp decline, followed by a sharp up move the next month. One day we hear positive news of a vaccine for the virus. Another day, a WHO scientist says we might have to live with this virus for years.

Naturally, investors are confused as to what they should do? Buy, hold or sell their stocks?

In the video below, Girish Shetty, Research Analyst at Equitymaster, explains the current scenario and what are the type of stocks investors should buy, hold or sell in the current crisis.

Tune in to find out more...

IDFC First Bank Posts Profit in Q4FY20

IDFC First Bank share price will be in focus today as the lender swung to profit in the March quarter.

IDFC First Bank reported a consolidated net profit of Rs 763.6 million for Q4FY20. It had posted a loss of Rs 2,120 million during the corresponding quarter a year ago.

The bank's total income rose to Rs 45.5 billion as against Rs 39.7 billion during the same period last year.

For the full year 2019-20, the bank reported a net loss of Rs 28.4 billion as against Rs 19.1 billion in the previous fiscal.

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The bank said that in view of accounting for IDFC - CFL (Capital First) merger from appointed date of October 1, 2018, the figures of the year ended March 31, 2020, are not comparable.

To know more, you can read IDFC First Bank's latest result analysis on our website.

Apart from the above, market participants will also be tracking Deepak Nitrite share priceWonderla Holidays share price and Torrent Pharma share price as these companies announced their March quarter results (Q4FY20) yesterday.

You can read our recently released Q4FY20 results of other companies here: Apollo TyresAjanta PharmaGrindwell NortonJubilant Foodworks, Birla Corporation, Bata India.

Bharti Telecom Sells Some Stake in Bharti Airtel

From the telecom sector, Bharti Airtel share price will be in focus today.

Shares of the company witnessed huge selling pressure yesterday after its promoter, Bharti Telecom, sold some stake in the telecom services provider through open market deals today.

Around 155.71 million equity shares representing 2.9% of total equity of Bharti Airtel changed hands on the BSE, the exchange data showed.

Reportedly, Bharti Telecom was to sell 2.8% stake worth US$ 1 billion in the telecom company via block deals. Up to 150 million shares were available for prospective investors through a book-built offering.

The shares were being offered to large, high networth investors at 6% discount to the closing price as on March 22. JP Morgan was to manage the sale with a floor price of Rs 558 per equity share.

As of March 31, 2020, Bharti Telecom held about 38.8% stake in Bharti Airtel which will be reduced by 2.8% after this deal.

FPIs Invest Rs 90 Billion in Indian Equities in May So Far

Foreign investors have infused over Rs 90 billion into the Indian equity markets in May so far amid attractive valuations of stocks and a mega block deal involving HUL.

The inflow comes following a net withdrawal of Rs 68.8 billion in April and Rs 619.7 billion in March on fears of a coronavirus-induced global recession.

According to depositories data, FPIs invested a net sum of Rs 90.9 billion in the equity markets during May 1-22.

However, they pulled out a net Rs 214.2 billion from the debt markets during the period under review.

Note that the coronavirus impact has shaken markets worldwide. After all, 2020 has already seen one of the worst market crashes in history.

Will the 2020 Market Crash Be Worse than 2009?

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.

Crude Oil Prices Rise on Signs of Supply Cuts

Crude oil prices rose yesterday on signs that producers are sticking to commitments to cut crude supply as more cars get back on the road with coronavirus lockdowns easing around the world.

Oil markets were buoyed by comments from Russia reporting its oil output had nearly dropped to its target of 8.5 million barrels per day (bpd) for May and June under its supply cut deal with the Organization of the Petroleum Exporting Countries (OPEC) and other leading producers.

US West Texas Intermediate (WTI) crude futures were trading up by 2.3% at US$ 34.00 yesterday.

OPEC+ countries are set to meet again in early June to discuss maintaining their supply cuts to shore up prices.

In April, the big producers had agreed to cut output by nearly 10 million bpd for May and June.

Russia's energy ministry on Monday quoted minister Alexander Novak as saying a rise in fuel demand should help cut the current global surplus of around 7-12 million bpd by June or July.

Speaking of crude oil, on a year-to-date (YTD) basis, crude oil prices are down about 42%.

Crude oil witnessed selling during the start of the year due to oversupply concerns amid subdued demand.

Prices crashed further in March in what was the worst price dip since the 1991 Gulf War with Brent prices plunging to US$ 31 per barrel.

In April, crude oil futures crashed and briefly went to negative prices, implying that investors would need to pay buyers to take delivery of crude oil amid dwindling storage space.

In one of his recent videos, Vijay Bhambwani, editor of Fast Profits Daily, has explained why he's expecting to recommend a short sell trade on crude oil.

You can check out his video and know more here: You Will Get a Chance to Short Crude Oil Once Again

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