A positive end to a dull week

Indian equity markets traded firm in today's session despite negative global cues. The Indian indices began the day's proceedings on a firm note and the afternoon session saw them inching upwards as buying intensified across index heavyweights. The BSE Sensex closed higher by 358 points while NSE-Nifty closed higher by 115 points. BSE Mid Cap and BSE Small Cap outperformed today, closing 1.2% and 1.4% higher respectively. Barring realty, all other BSE sectoral indices were trading in the green. Among them, auto index gained the most, followed by infrastructure and healthcare.

Asian markets finished mixed. The Nikkei 225 gained 0.06%, while the Shanghai Composite led the Hang Seng lower. They fell 0.18% and 0.17% respectively. European stocks drop as Greece worries persist. The rupee was trading strong by at 63.76 in the post noon session.

As per a leading financial daily, the US subsidiary of Glenmark Pharmaceuticals, Glenmark Pharmaceuticals Inc. has been granted final approval by the United States Food & Drug Administration (U.S. FDA) for Desmopressin Acetate. The tablets are used in the treatment of diabetes. Desmopressin Acetate is sold under the trademark DDAVP. Reportedly, sales data for the 12 month period ending March 2015, the DDAVP market achieved annual sales of approximately US$ 72.1 million. Glenmark's current portfolio consists of 97 products authorized for distribution in the U.S. marketplace and 68 ANDA's pending approval with the USFDA. The stock of Glenmark ended up by 2.34% today.

According to a leading financial daily, Crompton Greaves has received non-binding proposals from international entities for acquiring the company's European, North American and Indonesian power divisions. It has also received offers for the Canadian power and the American transportation automation business. In April, Crompton Greaves' consumer electrical business was sold to Advent International Corp and Singapore's Temasek Holdings for Rs 20 bn. Reportedly, Avantha Holdings, promoter of Crompton Greaves has stated that Crompton Greaves Consumer Electricals Ltd (CGCEL) will be demerged into a standalone company and listed on the stock exchanges. Shares of Crompton Greaves ended the day in green (up 1.81%) at the BSE.

Indian stock markets bullish
01:30 pm

After opening the day on a positive note, the Indian indices stood firm in the post noon trading session. Most sectoral indices are trading in the green with stocks from the Auto and Pharma sectors leading the gainers. However consumer durables stocks are trading weak.

The BSE-Sensex is trading up 156 points (up 0.6%) and the NSE-Nifty is trading up 57 points (up 0.7%). The S&P BSE Midcap index is trading up 1.1% and the S&P BSE Smallcap index is trading up 0.7%. Gold prices, per 10 grams, are trading at Rs 26,842 levels and silver price, per kilogram, are trading at Rs 38,345 levels. Crude oil is trading at Rs 3,745 per barrel. The rupee is trading at 63.73 to the US dollar.

Majority of the Steel stocks are trading positively today with Tayo Rolls and Maharashtra Seamless being the leading gainers. Steel Authority of India Ltd (SAIL), the leading steel-making company in India, has decided to join hands with Korean major Posco for setting up a 1.5 mtpa (million tonne per annum) steel plant at Bokaro at a likely investment of Rs 60 bn to cater to the growing demand from the automotive sector. The proposed new joint venture would use Posco's patented Finex technology and would be the first plant to be set up on the Finex technology outside Korea, where Posco has a 1.5 mtpa capacity. SAIL has been scouting for partners to exploit the opportunities to produce high-grade automotive steel and has signed a similar pact earlier this week with world's largest steelmaker ArcelorMittal with the objective of setting up a 1.5 mtpa steel plant at Rourkela in Odisha at an investment of Rs 50 bn. Currently the stock of SAIL is trading flat.

Stocks in the mining sector are trading mixed today with Coal India and MOIL witnessing maximum buying interest. As per a leading financial daily, Coal India Ltd is all set to invest Rs 50 bn in the railways to procure wagons for speedy transportation of coal by signing a MoU (memorandum of understanding) with Railway Board. The investment will ensure a guaranteed supply of wagons for early coal evacuation from Odisha and Chhattisgarh. On the other hand, with the help of better e-auction volumes, Coal India has also reported an increase in production to 152 million tonnes as compared to 143 million tonnes a year ago which led to improved profitability. The company's production for the March quarter rose by 3.7% while consolidated sales were up by 4% YoY (year-on-year). Stock of Coal India is currently trading up about 2%.

Indian markets open in green
09:30 am

Indian markets have opened the trading session in green regardless of weak global cues. BSE Sensex has opened the day higher by 90 points (up 0.3%) and NSE-Nifty is trading higher by 27 points (up 0.3%). BSE Mid Cap and BSE Small Cap have also started the trading on an encouraging note with both the indices up by 0.5% each. Barring Consumer Durables sector, majority of the sectoral indices are trading in positive territory with Healthcare and Realty stocks being the leading gainers.

Overnight, stocks on Wall Street closed marginally lower, with mixed economic data. Chinese share markets extended the selloff after the previous day's plunge, while rest of the Asian markets washed off their earlier gains to trade flat. Indian rupee opens flat at 63.81 per dollar.

According to a leading financial daily, Siemens has bagged an order worth about Rs 550 m from Comptoir Algerien du Materiel Electrique et Gazier (CAMEG Spa), a subsidiary of the Sonelgaz Group of Algeria. Siemens will supply high voltage circuit breakers to the Algerian firm. The circuit breakers will be installed in various substations across Algeria. Sonelgaz Group is the government owned utility in charge of electricity and natural gas distribution company in Algeria. Shares of Siemens have opened the day on a flat note on the BSE.

Telecom stocks have opened the day on an optimistic note with ITI Ltd and Bharti Airtel being the leading gainers. According to a leading financial daily, Vodafone has sold its 4.2% stake in Bharti Airtel for US$200 million. The stake has been bought by Bharti Enterprise, the holding company of Airtel. This step is in accordance with the new norms issued by government of India that, bars a telecom operator from holding any kind of stake in competition under unified licences. Consequently, Vodafone has to sell its entire stake in Bharti Airtel. Earlier, upto 10% stake was allowed. Vodafone had picked 10% stake in Airtel in 2005. Part of this was sold in 2007.

Should market volatility be a reason to panic?

Time and again we have expressed our views on why we consider equities as a preferred class of investing. It is not just probability of high returns that attracts us, but the probability of zero capital loss in the long term that appeals to us.

That said, stock markets are not for everyone. One needs to spot a good business at right valuations and stay disciplined. Over the last year, such opportunities have been limited. Since Mr. Modi's rise to power, markets have been driven by optimism, causing valuations to run ahead of fundamentals. It is only recently that investors have been offered a dose of reality by FII pull out and weak earnings season. While the trend has unnerved a lot of investors, some, including us believe such corrections offer a great opportunity for long term investors to buy great businesses at fair valuations.

That said, a winning strategy will require lot of patience. Our economy is on the threshold of a turn around. But the same is not going to happen over night. As an article in Economic Times suggests, in the near term, China may outshine India as far as fund inflow is concerned. Secondly, Indian economy is shifting focus from consumer gear to capex and infrastructure gear. With major reforms yet to be announced and executed, it will be naive to expect too much from economic scenario and on corporate earnings front in the near term. Policy framing and their execution is something that takes time. And in the meantime, there may be some bumps on the road to economic recovery.

Investors can make the most of such times by keeping ready a list of companies with strong fundamentals. And grab the opportunity when markets offer such stocks at attractive valuations. The real challenge here will be to curb the speculative tendencies and urge to act on the constant information on market movements that will have little relevance to the intrinsic value of the stock. If one can befriend volatility and stay disciplined, equity markets can offer great returns in the long term. We would like to conclude with a quote from legendary investor Mr. Warren Buffett - "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful".