Sensex Ends 210 Points Lower; Realty and Metal Stocks Witness Selling
Closing

Indian share markets witnessed selling pressure throughout the day today, tracking weak global cues as coronavirus cases continue to surge across the world.

The Standard and Poor's warning that the Indian economy is in deep trouble also weighed on investor sentiment. The rating agency has projected the Indian economy's growth to contract by 5% this fiscal.

Further, geopolitical tensions like India-China border issue and US-China trade dispute kept investors on edge.

At the closing bell, the BSE Sensex stood lower by 210 points, down 0.6%. The NSE Nifty closed down by 71 points, down 0.7%.

SGX Nifty was trading at 10,269, down by 63 points, at the time of writing.

The BSE Mid Cap index ended the day down by 1.4%, while the BSE Small Cap index ended down by 1.2%.

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Among sectoral indices, metal stocks and realty stocks were among the hardest hit.

Asian stock markets fell today as the number of coronavirus cases around the world exceeded 10 million and the epidemic accelerated in the United States.

As of the most recent closing prices, the Hang Seng ended down by 1% while the Shanghai Composite stood lower by 0.6%. The Nikkei declined 2.3%.

On Friday, the Dow Jones index tumbled more than 700 points as some states were forced to pause their reopening amid rising Covid-19 cases.

Gold prices are trading up by 0.1% at Rs 48,227 per 10 grams.

The rupee is trading at 75.58 against the US$.

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Speaking of the current stock market scenario, the last few months have witnessed the kind of shifts that most investors would recall as once in a lifetime.

An important driver of this rally is the increasing inflow from foreign institutional investors now that the global economies have opened the liquidity tap.

In her latest video, Richa Agarwal, editor of our premium smallcap service Hidden Treasure, shares her thoughts on what this could mean for the rebound in smallcaps and how to make the most of it.

Tune in to find out more...

Moving on, market participants were tracking Ruchi Soya share price.

The unstoppable rally in the shares of Ruchi Soya, which Baba Ramdev's Patanjali Group acquired last year in a bankruptcy sale, has made the edible oil maker one of the top 60 companies on Dalal Street in terms of market capitalisation.

In terms of market-cap, Ruchi Soya is now bigger than companies like Lupin, Torrent Pharma, Tata Steel, Ambuja Cements, HPCL, Grasim, Punjab National Bank, Hindalco, UPL, Colgate-Palmolive and Havells India.

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After a sharp rally in the stock price, analysts have turned cautious on the stock. They feel markets regulator should take note and probe what is driving the ongoing rally on the counter.

They said the market regulator should ask the company when it is planning to meet the minimum public shareholding norms of 25%.

As of March 31, 2020, the promoters held 99.03% stake in the company. Retail investors currently own less than 1% in the company.

Shares of the company declined 5% today post its March quarter earnings.

The company on Friday posted a net loss of Rs 412.4 million for the quarter ended March 31 against a net profit of Rs 321 million posted for the corresponding quarter last year.

Net sales came in at Rs 31.9 billion, up 1.42% from Rs 31.5 billion in March quarter of 2019.

In news from the FMCG sector, shares of ITC gained as much as 4% today after the company on Friday reported a 9.1% rise in standalone net profit rose to Rs 38 billion for the quarter ended March 31, 2020 (Q4FY20).

The increase in ITC's profit came on account of a lower corporate tax outgo despite a decline in revenues.

ITC's revenue from operations declined 6.3% to Rs 113 billion in the fourth quarter of financial year 2019-20, from Rs 120.6 billion in the year-ago period.

The company's profit before tax (PBT) declined by 7.8% to Rs 47.4 billion. The fall in PBT was due to a sharp decline in consumption, especially in rural areas due to the covid-19 pandemic.

During the quarter, ITC paid Rs 8.5 billion in taxes, as against Rs 15.7 billion in the same quarter a year ago.

ITC said that in the initial stages, the pandemic had a significant impact on its hotels, education, and stationery products businesses as it coincided with the peak period and the onset of the school season, which were closed owing to the pandemic.

The company's board recommended a dividend of Rs 10.15 per share for financial year 2019-20.

ITC share price ended the day up by 1.4%.

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

In other news, Hindustan Unilever (HUL) was among the top buzzing stocks today.

HUL got a long-awaited boost on the Nifty 50 index following a delayed rebalancing that took place on June 26, making it the largest FMCG stock in the index.

HUL's weightage in the Nifty now stands at 4.4%, as against previous weightage of 3.63% before the rebalancing.

ITC had the highest weightage among FMCG stock in the Nifty but HUL has caught up with it.

As per reports, there are two factors behind the change, i.e. stock price outperformance and higher free float market capitalization.

In April, HUL informed the stock exchanges that it would be allotting 186.4 million of its shares to GSK Consumer Healthcare shareholders under the pre-agreed ratio of 439 HUL shares for every 100 GSK shares. This resulted in higher free-float market capitalization.

Last week, the company announced that it would stop using the word 'Fair' in its 'Fair & Lovely' skin cream, in a move that comes after years of protests that it promotes prejudice over skin colour.

HUL share price ended the day up by 1.2%.

Here's an interesting data of HUL, until 2013, the company had products and categories customized for Indian market. That made it difficult for the company to sell its overseas products in the country. Nor could it reach out enough to a global customer base with Indian products.

A change of strategy suddenly opened up Unilever's global markets to HUL for both sourcing and selling.

The result was evident in profit growth and stock price over the next few years.

Stock of HUL Had the Crorepati Trigger in 2013

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


Sensex Slips 450 Points; Axis Bank & Bajaj Finance Top Losers
12:30 pm

Share markets in India fell nearly 1.5% today, tracking weak global cues as coronavirus cases continue to surge across the world.

The Standard and Poor's warning that the Indian economy is in deep trouble also weighed on investor sentiment. The rating agency has projected the Indian economy's growth to contract by 5% this fiscal.

Barring FMCG stocks, all sectoral indices are trading on a negative note with stocks in the realty sector and metal sector witnessing most of the selling pressure.

The BSE Sensex is trading down by 423 points (down 1.3%), at 34,700 levels.

Meanwhile, the NSE Nifty is trading down by 143 points (down 1.4%).

The BSE Mid Cap index is trading down by 1.7%. The BSE Small Cap index is trading down by 1.5%.

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Gold prices are currently trading up by 0.2% at Rs 48,400.

The rupee is trading at 75.56 against the US$.

The domestic currency opened 3 paise higher today at 75.62 against the US dollar following some selling in American currency by banks and exporters.

On Friday, the rupee settled flat at 75.65 against the greenback as concerns about rising Covid-19 cases weighed on investor sentiment.

So far in 2020, the currency has dropped 5.6%.

As per an article in The Economic Times, the growth shock to India's economy from the coronavirus pandemic will trigger more weakness in the rupee, dragging it toward an unprecedented 80-per dollar level.

Here's an excerpt from the article:

  • That's the view from Venkat Thiagarajan, who has traded currency markets for 26 years, and most recently served as the head of forex at Reliance Industries Ltd., which runs India's largest corporate treasury. The rupee, he argues, has a stronger link with economic growth, and metrics like the current account, balance of payments and global dollar dynamics have a marginal impact in the medium term.
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Thiagarajan has seen Reliance emerge as one of the most prolific issuers and borrowers in the global debt markets during his 17-year stint at the oil-to-telecom giant.

Controlled by Mukesh Ambani, Asia's richest man, Reliance alone accounts for about 10% of India's exports, which explains why traders closely watch its forex flows. Last year, the company is said to have sold bulk of the US$ 5 billion in a forex swap with the central bank.

Note that, massive sell-off in equities and bonds led to a huge fall in rupee against the dollar in 2020. In April, the domestic currency fell to a record low of 76.92.

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's Downtrend

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Moving on, market participants are tracking Emami share price. Shares of the company slipped 6% today after it reported disappointing set of numbers for the quarter ended March 2020, impacted severely by the Covid-19 pandemic.

The personal products company's profit before tax (PBT) declined by 70% year on year (YoY) to Rs 253.7 million in Q4FY20, from Rs 847.7 million in Q4FY19.

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Profit after tax during the quarter under review more-than-halved to Rs 233.6 million from Rs 561.5 million.

In news from the banking sector, IDBI Bank and Axis Bank are among the top buzzing stocks today.

Shares of IDBI Bank gained 5% intraday today after the bank said its board has approved a plan to offload 27% stake in IDBI Federal Life Insurance at a combined value of Rs 6 billion.

IDBI Bank has 48% stake in IDBI Federal Life Insurance, which started operations in 2008. Federal Bank and its Dutch partner Ageas Insurance International NV have 26% stake, each.

The stake sale is subject to all regulatory approvals to be taken by all related parties and agreements which are yet to be finalised.

Shares of the lender touched a new 52-week high today on back of the above news.

In the last one month, the stock has zoomed over 100% from the level of Rs 20.30.

Last month, the lender had posted a profit before tax (PBT) of Rs 2.9 billion for the fourth quarter ended March 2020 (Q4FY20) on a healthy rise in net interest income and a sharp drop in provisions and contingencies.

The bank had posted a loss before tax of Rs 71.4 billion in quarter ended March 2019 (Q4FY19).

IDBI Bank share price is presently trading up by 2%.

To know more, you can read IDBI Bank's Q4FY20 result analysis on our website.

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


Sensex Opens Lower; Banking Stocks Under Pressure
09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.7% while the Hang Seng is down 0.6%. The Nikkei 225 is trading down by 1.3%.

Wall Street's major indices tumbled more than 2% on Friday as several US states-imposed business restrictions in response to a surge in coronavirus cases.

Back home, Indian share markets opened on a negative note.

The BSE Sensex is trading down by 276 points. The NSE Nifty is trading down by 68 points.

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Meanwhile, the BSE Mid Cap index has opened down by 0.5%.

BSE Small Cap index is trading lower by 0.7%.

All sectoral indices are trading in the red with BSE Bankex witnessing maximum selling pressure.

Speaking of the current stock market scenario, note that the coronavirus impact has shaken markets worldwide.

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

Here's a look at the chart showing year-to-date (YTD) Sensex gainers and losers.

Largest Positive and Negative Point Contributions of Sensex Components

Moving on, the rupee is currently trading at 75.62 against the US$.

Gold prices are currently trading up by 0.8% at Rs 48,305.

Moving on to the stock specific news...

Axis Bank and Piramal Enterprises are among the top buzzing stocks today.

Axis Bank came in focus after the bank on Saturday clarified that global rating agency Standard and Poor had made an error by inadvertently mentioning that the bank was on credit watch and that it is on Stable outlook.

The bank clarified that S&P had made an editorial error.

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As per the rating action letter by S&P Global Ratings Axis Bank's current issuer ratings stands at BB+/Stable/B from previous BBB-/Negative/A-3 rating.

The S&P stated that, it lowered ratings on Axis to reflect the expectation that heightened economic risks facing India's banking system will affect the bank's asset quality and financial performance. While Axis' asset quality is superior to the Indian banking sector average, its level of non-performing assets (NPAs) will likely remain high compared to international peers'.

The stable rating had been given considering that the bank must have factored in the deterioration in its asset quality over the next 12 months, the reports noted.

S&P had recently downgraded the ratings of Axis Bank along with four non-bank financiers (NBFC)s stating that the increased risks posed by the Covid-19 pandemic will worsen operating conditions.

Axis Bank share price opened the day down by 3.5%.

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In another news, Piramal Enterprises informed that US-based investment firm Carlyle Group will purchase a 20% stake in its pharmaceutical unit for around US$490 million.

Piramal Enterprises will integrate its pharmaceuticals businesses into its wholly owned subsidiary Piramal Pharma, which will use the capital raised through the deal to accelerate its organic and inorganic growth plans.

The conglomerate said the transaction, expected to close in 2020 and subject to regulatory clearance, is one of the largest private equity deals in the country's pharmaceutical sector.

Reportedly, the deal values its pharma business at an enterprise value of US$2,775 million, with an upside component of up to US$360 million depending on the company's performance in the current financial year.

The final amount of equity investment will depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal.

Piramal Enterprises share price opened the day down by 0.2%.

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


SGX Nifty Trades Lower, One-Time Loan Restructuring by RBI, Companies Lined for Delisting, and Buzzing Stocks in Focus Today
Pre-Open

Indian share markets witnessed positive trading activity on Friday and ended higher, lifted by IT stocks.

IT stocks rallied after Accenture came out with better-than-expected quarterly numbers. The company reported an adjusted third-quarter profit of US$ 1.90 a share, which beat the US$ 1.85 average estimate of 22 analysts surveyed by Bloomberg.

Reacting to the above news, most of the IT stocks rallied and the BSE IT Index surged over 5% intraday on Friday.

At the closing bell on Friday, the BSE Sensex stood higher by 329 points (up 0.9%).

The NSE Nifty closed higher by 94 points (up 0.9%).

Gains were largely seen in the IT sector and oil & gas sector.

FMCG stocks, on the other hand, witnessed selling pressure.

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The BSE Mid Cap index ended up by 0.3%, while the BSE Small Cap index ended up by 0.2%.

At 8:20 am today, the SGX Nifty was trading down by 56 points, or 0.54% lower at 10,270 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Speaking of the current stock market scenario, note that the coronavirus impact has shaken markets worldwide.

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

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So, is it time to sell stocks now? Will the correction get worse?

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Top Stocks in Focus Today

Hindustan Unilever share price will be in focus today as the company informed that it would stop using the word 'Fair' in its 'Fair & Lovely' skin cream, in a move that comes after years of protests that it promotes prejudice over skin colour.

The new name is awaiting regulatory approvals and will be adopted in the next few months.

First introduced in India decades ago, Fair & Lovely became a bestselling product, racking up sales of about Rs 40 billion last year as it tapped into the perspective that equated fairness with beauty.

Piramal Enterprises will be among the top buzzing stocks today.

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This comes as the Carlyle Group has emerged as the frontrunner to buy a significant stake in the Piramal Group's pharma businesses for close to Rs 35 billion.

Reportedly, American private equity giants TPG Capital and KKR & Co. Inc. too were in the fray, looking to invest Rs 35-40 billion for acquiring a 20% stake in Piramal Group's proposed pharmaceutical entity that would combine the group's pharma businesses.

Shares of Aarti Drugs will also be in focus today. The stock of the company witnessed huge buying interest on Friday last week and hit a new all-time high of Rs 1,299.50, on expectation of good growth from its Active Pharmaceutical Ingredient and formulation business.

In the past three months, stock of the company has zoomed about 160%.

Promoters on a Delisting Spree

A wave of voluntary delisting proposals in India's US$ 1.8-trillion stock market is stoking bets on which entity will be the next to go private.

In the last two months, the majority owners of Vedanta, Adani Power, and Hexaware Technologies have proposed buying out all publicly traded shares amid the coronavirus-induced sell-off in stocks.

It was also reported last month that Diageo is exploring options to delist United Spirits.

Enthusiasm to invest in shares of public companies that can go private matches a trend seen in Singapore in recent years.

According to the data from DBS Bank, the premium for privatizations and takeovers in the city-state averaged about 15% between 2017 and July 2019.

The strategy was earlier seen in India after the global financial crisis, and, in 2009, at least one local fund manager opened a fund to buy shares in companies seen to have a high likelihood of delisting.

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

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RBI May Allow One-Time Loan Restructuring to Companies

Finance Minister Nirmala Sitharaman last week said the government is discussing with the Reserve Bank of India (RBI) for loan restructuring of companies which are stressed owing to the Covid-19 pandemic.

Speaking at a webinar organized by the Chennai International Centre (CIC), Sitharaman said that discussions are on with the RBI on the matter of one-time restructuring of loans.

She also said that discussions are on with the RBI and the banks as to why the interest rate reductions are not passed on to the customers.

According to her, the reasons for banks not fully passing on the benefit of interest rate reductions are not convincing.

Sitharaman said the government will also consider providing an emergency line of credit to individual owners of businesses while a decision on the suggestion to offer collateral free credit based on pending Goods and Services Tax (GST) bills will be deliberated upon.

She also urged the Indian industries to introspect on how businesses are run and on how the 'Aatmanirbhar Bharat' mission could be realized to its full potential.

Pointing out the active pharmaceutical ingredients (APIs) for example, Sitharaman said that India is a big market and they should be manufactured in the country without depending on one or two countries.

We will keep you updated on all the upcoming news from this space. Stay tuned.

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