Sensex Tanks 661 Points; Banking and Finance Stocks Witness Huge Selling
Closing

Indian share markets fell sharply today, led by weak Asian equities as worries of new lockdowns to stem surging coronavirus cases kept investors cautious worldwide.

Pune and Bengaluru are among the big cities going under lockdown, while many areas in states like Bihar and UP are also under curfew.

Further, weak inflation data and negative cues from global markets amid escalating US-China tension dampened investor sentiment.

The United States on Monday rejected China's disputed claims to offshore resources in most of the South China Sea, a move that Beijing criticized as inciting tensions in the region and highlighted an increasingly testy relationship.

At the closing bell, the BSE Sensex stood lower by 661 points (down 1.8%).

Meanwhile, the NSE Nifty closed down by 195 points (down 1.8%).

SGX Nifty was trading at 10,612, down by 195 points, at the time of writing.

{inlineads1}

The BSE Mid Cap index and the BSE Small Cap index ended the day down by 1% and 0.9%, respectively.

Banking stocks and finance stocks were among the hardest hit. HDFC Bank, Axis Bank and IndusInd Bank came under selling pressure today.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down 1.1% and the Shanghai Composite stood lower by 0.8%. The Nikkei was down 0.9%.

The rupee was trading at 75.41 against the US$.

Gold prices are trading down by 0.3% at Rs 48,996 per 10 grams.

Market participants were tracking 5Paisa Capital share price. Shares of the company were locked in the 5% upper circuit limit after the company posted net profit of Rs 37.4 million in June quarter (Q1FY20), against net loss of Rs 5.5 million in the year-ago quarter.

The company has reported quarterly profits for the first time since the launch of 5Paisa in March 2016. The stock was trading at its 52-week high level.

The management said the company saw highest quarterly acquisition of over 1.6 lakh customers.

{inlineads2}

In news from the power sector, shares of BF Utilities jumped 10% in early trade today following reports of ace investor Radhakishan Damani having acquired 1.3% stake in the company.

According to the latest shareholding pattern, Damani held 1.30% stake in Kalyani group company as of 30 June.

Yesterday, BF Utilities had announced that operations at its Pune office have been suspended, as of 14 July until further notice, to comply with the lockdown order issued by local authorities.

The company reported a standalone net profit of Rs 7.2 million in the March quarter (Q4FY20) compared to a loss of Rs 10 million in the year-ago period.

Net sales surged 61.2% year-on-year to Rs 34.5 million during January-March quarter.

BF Utilities share price ended the day up by 10%.

{inlineads3}

Moving on, in latest developments from the IPO space, casual dining chain Barbeque Nation Hospitality has received markets regulator's approval to raise about Rs 10-12 billion through an initial public offering (IPO).

The IPO comprises a fresh issue of shares worth Rs 2.8 billion and an offer-for-sale of up to 98,22,947 equity shares, according to the draft papers filed with the regulator.

The company may consider a pre-IPO placement to the tune of Rs 1.5 billion.

Barbeque Nation Hospitality, which had filed its draft papers with markets regulator in February, obtained "observations" from the regulator on July 7.

Proceeds of the issue will be utilized to repay an outstanding borrowing of Rs 2.1 billion in part or full and for general corporate purposes.

The promoters hold 60.24%, CX Partners own 33.79% and Rakesh Jhunjhunwala's investment firm Alchemy Capital holds 2.05% stake in the company.

In 2017, the company had filed IPO papers seeking to raise Rs 7 billion. However, the regulator kept the processing of the company's proposed IPO in abeyance "pending regulatory action for past violations" and finally approved the IPO plan in January 2018.

In other news, the Rs 5 billion IPO by Rossari Biotech got fully subscribed on the Day 2 of bidding process.

By 1 pm today, the issue by specialty chemicals company had attracted bids for 89,61,015 shares, which was 1.10 times the issue size of 81,73,530 shares.

The quota for qualified institutional bidders (QIBs) was subscribed 98% while those of non-institutional investors and retail individual investors (RII) was subscribed 23% and 1.42 times, respectively.

Rossari Biotech's IPO comprises fresh issuance of shares worth Rs 500 million and sale of 1,05,00,000 equity shares by company's promoters through offer-for-sale route. Post the IPO, the promoter shareholding will fall to 73% from 95% earlier.

Investors can bid in lot sizes of 35 shares. The equity shares will be listed on the NSE and BSE.

The net proceeds from the IPO will be utilised for funding working capital requirements, repaying certain debt availed by the company and for general corporate purposes.

Rossari Biotech is a specialty chemicals manufacturing firm with focus on home and personal care, performance chemicals, textile specialty chemicals and animal health and nutrition products.

The issue was subscribed 1.31 times at the time of writing. It received bids for 1,07,34,465 shares against the offer size of 81,73,530 shares.

On Friday, the company raised Rs 1,488.7 million from anchor investors, who included top three fund houses - SBI Mutual Fund, HDFC Mutual Fund and ICICI Prudential Mutual Fund.

Speaking of IPOs, in one of the editions of The 5 Minute WrapUp, Ankit Shah has shared how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of 2019 and checked the retail investor enthusiasm for them.

Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments.

This can be seen in the chart below:

Are Retail Investors Back in the IPO Game?

Here's what Ankit wrote about it...

  • Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!

    Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.

Does this hint that retail investors are coming back to the markets? It would be interesting to see how this trend pans out in 2020.

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

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


Sensex Down 513 Points; Banking and Auto Stocks Witness Huge Selling
12:30 pm

Share markets in India have extended early losses and are presently trading deep in the red.

The BSE Sensex is trading down by 513 points, at 36,200 levels.

Meanwhile, the NSE Nifty is trading down by 150 points.

The BSE Mid Cap index is trading down by 1%. The BSE Small Cap index is trading down by 1.1%.

All sectoral indices are trading in red with stocks in the banking sector and auto sector witnessing most of the selling pressure.

The rupee is trading at 75.41 against the US$.

{inlineads1}

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.

The Sensex has risen up from the lows seen in March 2020 when it had declined by over 20%.

What's Driving the Markets?

So, what's driving the markets? An important driver of this rally is the inflow from global funds, now that the global economies have opened the liquidity tap.

Investors and traders who are new to stock markets have had a superb experience over past three months as almost any and every stock has given them phenomenal returns.

{inlineads2}

The problem is that this experience may not be lasting unless investors now take a careful look at their portfolio and literally sanitize them to get rid of the unwanted elements.

In his latest video, Rahul Shah talks about a very effective technique for zeroing in on the right penny stock.

He also shares how can one go about implementing the same.

Tune in to find out more...

Housing Development Finance Corporation is among the top buzzing stocks today.

HDFC in a regulatory informed that it is considering to raise up to Rs 450 billion by issuing debt securities, and will seek approval of shareholders in its upcoming AGM later this month.

The company also said the board of directors of HDFC Ltd will meet on July 30 to announce the quarterly results for the first quarter ended June of the current fiscal. The 43rd annual general meeting (AGM) of the corporation is scheduled to be held later on the same day.

{inlineads3}

Coal India share price is also in focus today as the company's dues from state-owned power generation companies have risen to Rs 220 billion amid muted demand and high production. The outstanding amount was around Rs 120 billion in January.

In news from the IPO space, Rossari Biotech's initial public offering (IPO) attracted bids for 60% of shares on the block yesterday - its day 1 of the bidding process.

As per the data, by 5 pm yesterday, the issue by specialty chemicals company had received bids for 49,30,030 shares, which was 60% of the issue size of 81,73,530 shares.

On Friday, the company raised Rs 1,488.7 million from anchor investors, who included top three fund houses - SBI Mutual Fund, HDFC Mutual Fund and ICICI Prudential Mutual Fund.

In the Rs 5 billion IPO, Rossari Biotech has fixed a price band of Rs 423-425 per equity share and the issue will remain open till July 15th.

Rossari Biotech's IPO comprises fresh issuance of shares worth Rs 500 million and sale of 1,05,00,000 equity shares by company's promoters through offer-for-sale route. Post the IPO, the promoter shareholding will fall to 73% from 95% earlier.

Investors can bid in lot sizes of 35 shares. The equity shares will be listed on the NSE and BSE.

The net proceeds from the IPO will be utilised for funding working capital requirements, repaying certain debt availed by the company and for general corporate purposes.

Rossari Biotech is a specialty chemicals manufacturing firm with focus on home and personal care, performance chemicals, textile specialty chemicals and animal health and nutrition products.

Early in March this year, Rossari had postponed its IPO plans due to the extreme volatility in the market due to the Covid-19 pandemic.

How the above IPO sails through remains to be seen. Stay tuned for more updates from this space.

Moving on to the news from pharma sector, Glenmark Pharmaceuticals has announced that it has commenced a Post Marketing Surveillance (PMS) study on FabiFlu to closely monitor the efficacy and safety of the drug in 1,000 patients that are prescribed with the oral antiviral, as part of an open-label, multicenter, single-arm study.

Glenmark Pharmaceuticals had last month launched antiviral drug favipiravir, under the brand name FabiFlu, for the treatment of cases of mild to moderate Covid-19.

Reportedly, FabiFlu, the first oral favipiravir approved medication in India for the treatment of the coronavirus disease, will be available as a 200mg tablet at a maximum retail price (MRP) of Rs 3,500 for a strip of 34 tablets.

The Drug Controller General of India (DCGI) granted Glenmark Pharma the permission to manufacture and market favipiravir for restricted emergency use in mild to moderate cases.

Favipiravir, which has been approved in Japan since 2014 for the treatment of novel or re-emerging influenza virus infections, has shown clinical improvement of up to 88% in mild to moderate Covid-19 cases, the company stated.

Glenmark had announced in May that it is conducting another clinical trial to evaluate the efficacy of two antivirals favipiravir and umifenovir as a combination therapy in moderate hospitalised adult Covid-19 patients in India.

How the above development pan out remains to be seen. We will keep you updated on all the news from this space.

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


Sensex Slips Over 550 Points; Nifty Falls Below 10,700 Mark
11:30 am

Share markets in India have extended early losses and are presently trading deep in the red.

Benchmark indices edged lower today tracking weak Asian markets.

The BSE Sensex is trading down by 599 points, down 1.6%. Meanwhile, the NSE Nifty is trading down by 173 points, down by 1.6%.

Shares of IndusInd Bank plunged over 4.5%, while SBI and Axis Bank fell over 3%.

All sectoral indices are trading in red with stocks in the banking sector and auto sector witnessing most of the selling pressure.

More details to follow in the upcoming commentary. Stay tuned.


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 1.4% while the Hang Seng is down 1.9%. The Nikkei 225 is trading down by 0.8%.

Meanwhile, the S&P 500 and Nasdaq ended lower yesterday, pulled down by Amazon, Microsoft and other big-name leaders of Wall Street's recent rally.

Back home, Indian share markets opened lower.

The BSE Sensex is trading up by 264 points. The NSE Nifty is trading up by 73 points.

Meanwhile, the BSE Mid Cap index has opened down by 0.2%.

BSE Small Cap index is also trading lower by 0.4%.

Sectoral indices are trading mixed. BSE Bankex is under maximum pressure, down 1.4%.

BSE IT index is witnessing buying interest.

Moving on, the rupee is currently trading at 75.19 against the US$.

Gold prices are currently trading up by 0.6% at Rs 49,148.

{inlineads1}

Speaking of the current stock market scenario, have a look at the chart below which shows how the BSE Sensex and the smallcap index have moved over the past one year:

The markets are coming out of the deep fall. An important driver of this rally is the increasing inflow from foreign institutional investors now that the global economies have opened the liquidity tap.

A lot of this money is coming to the mid and smallcap space.

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 to the stock specific news...

Yes Bank is among the top buzzing stocks today.

As per an article in a leading financial daily, Yes Bank is considering segregating its bad assets into a separate entity as it aims to lower the stress on balance sheet.

{inlineads2}

The company stated that the proposed organisation will be professionally run, where there will be investors. This is subject to regulatory approvals.

The bank has already created a separate vertical internally with more than 100 staffers to solely work on resolution and recovery of stressed accounts.

If the banking regulator gives approval to the proposed "bad bank" entity, any upside will be shared by the lender and investors.

Yes Bank's gross non-performing assets stood at 16.8% as of March 2020. The corporate loans constituted 96.5% of the gross bad loans. Its provision coverage ratio stood at 74% and net NPA ratio stood at 5.03% as of March.

The bank's special mention accounts-1 loan book, loans overdue by 30 to 60 days, stood Rs 107.8 billion and SMA-2, loans overdue by 60 to 90 days, at Rs 3.2 billion.

Note that, In March, a clutch of eight lenders, led by State Bank of India had infused over Rs 100 billion into Yes Bank, as part of a rescue deal approved by the Reserve Bank of India.

{inlineads3}

This plan was stitched together after the bank was put under a moratorium and its board superseded. Still, the private lender is in need of a capital infusion.

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

Yes Bank share price opened the day down by 6.6%.

Moving on to the news from the economy. According to the latest data released by the Ministry of Statistics & Programme Implementation (MoSPI), India's retail inflation, which is measured by the Consumer Price Index (CPI) grew 6.1% in the month of June.

The government had not released the headline retail inflation data in April and May. However, in April, it had revised the CPI data for the month of March to 5.8% from 5.9%.

The retail inflation has grown beyond the Reserve Bank of India's (RBI) upper margin of 6%.

The government has mandated the Indian central bank to keep inflation within the range of 4% with a margin of 2% on either side.

The Consumer Food Price Index (CFPI) or the inflation in the food basket eased to 7.9% in the month of June as the supply related issues because of the nationwide lockdown eased.

The CFPI for May was revised to 9.2%, the data showed.

The retail inflation growth was mainly due to a rise in pulses and products prices that saw a 16.7% on-year rise in June.

Apart from pulses and products segment, the meat and fish segment saw a rise of 16.2%, while that of oils and fats rose 12.3% and spices prices gained 11.7%.

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


SGX Nifty Trades Lower, Rossari Biotech IPO, Avenue Supermarts June Quarter Results, and Top Buzzing Stocks Today
Pre-Open

After opening the day on a strong note yesterday, Indian share markets erased most of the gains and turned highly volatile in the afternoon session.

Benchmark indices erased gains during closing hours tracking weakness in banking and finance stocks.

Sectoral indices ended on a mixed note with stocks in the energy sector and IT sector witnessing buying interest.

Banking stocks witnessed selling pressure.

After rising more than 400 points in early trade yesterday, the BSE Sensex ended up by 99 points.

Meanwhile, the NSE Nifty stood higher by 47 points.

The BSE Mid Cap index ended up by 0.1%. The BSE Small Cap index ended down by 0.2%.

At 8:15 am today, the SGX Nifty was trading down by 56 points, or 0.52% lower at 10,750 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Speaking of stock markets, in his latest video, Rahul Shah talks about a very effective technique for zeroing in on the right penny stock.

He also shares how can one go about implementing the same.

Tune in to find out more...

{inlineads1}

Top Stocks in Focus Today

Reliance Industries will be among the top buzzing stocks today ahead of its annual general meeting (AGM) to be held on 15 July.

As in the past, market participants are expecting a slew of big-ticket announcements from Reliance Industries, and details of the recently launched videoconferencing app, JioMeet.

Shares of the company also hit a lifetime high of Rs 1,947 on the BSE yesterday, after it announced the sale of 0.15% stake in Jio Platforms to Qualcomm Ventures for Rs 7.3 billion.

The markets and shareholders are also awaiting the announcements of Jio Platforms' listing, probably on the global bourses.

{inlineads2}

From the chemical sector, market participants will be tracking Clariant Chemicals.

Clariant Chemicals share price zoomed yesterday after the company announced a special interim dividend of Rs 140 per share (1400%) for the current financial year 2020-21 (FY21).

The company has fixed July 18, 2020 as the record date for the purpose of payment of special interim dividend. The dividend shall be paid on or after July 19, 2020.

The stock of the specialty chemical was trading at its fresh 52-week high level yesterday. In the past three months, it has rallied 106%.

Alembic Pharma will also be in focus today after it was reported that the company is looking at enhancing profitability of its domestic business and expects it to grow in double digits in the current financial year with focus on high-margin products.

The company stated that it has already started witnessing an uptick in domestic business with new product strategy in place.

{inlineads3}

Avenue Supermarts June Quarter Results

Avenue Supermarts reported an 88% fall in its net profit for the April-June quarter (Q1FY21).

Avenue Supermarts, the operator of hypermarket stores DMart, said that operations and financial performance during the quarter were hit by the lockdown. Revenues were down 32% from the previous year.

Consolidated total revenue for the hypermarket chain stood at Rs 39.3 billion in the June quarter, down from Rs 58.3 billion in the same quarter last year.

EBITDA during the quarter stood at Rs 1.1 billion, as compared to Rs 5.9 billion in Q1FY20. EBITDA margin too showed a significant drop of 2.9% in Q1FY21 as compared to 10.3% in Q1FY20.

The company said that General Merchandise & Apparel constitute around one-fourth of the total revenue. This segment continues to be under constant pressure for the past few months and is impacting gross margins negatively. The duration of operation also continues to remain inconsistent across cities due to strict lockdowns enforced by respective local authorities from time to time thereby, affecting revenue.

D-Mart has a total of 196 stores, with the majority being in Maharashtra (74). Maharashtra, which is one of the most affected regions in India suffering from the COVID-19 crisis, has hit D-Mart's revenue in the past few months.

Rossari Biotech IPO Open for Subscription

In news from the IPO space, after a four-month lull in the IPO market, Rossari Biotech's public issue opened for subscription yesterday.

At the time of closing hours yesterday, the issue had received bids for 27,58,560 shares, which was 34% of the issue size of 81,73,530 shares.

On Friday, the company raised Rs 1,488.7 million from anchor investors, who included top three fund houses - SBI Mutual Fund, HDFC Mutual Fund and ICICI Prudential Mutual Fund.

In the Rs 5 billion IPO, Rossari Biotech has fixed a price band of Rs 423-425 per equity share and the issue will remain open till July 15th.

Rossari Biotech's IPO comprises fresh issuance of shares worth Rs 500 million and sale of 1,05,00,000 equity shares by company's promoters through offer-for-sale route. Post the IPO, the promoter shareholding will fall to 73% from 95% earlier.

Investors can bid in lot sizes of 35 shares. The equity shares will be listed on the NSE and BSE.

The net proceeds from the IPO will be utilised for funding working capital requirements, repaying certain debt availed by the company and for general corporate purposes.

Rossari Biotech is a specialty chemicals manufacturing firm with focus on home and personal care, performance chemicals, textile specialty chemicals and animal health and nutrition products.

Early in March this year, Rossari had postponed its IPO plans due to the extreme volatility in the market due to the Covid-19 pandemic.

How the above IPO sails through remains to be seen. Stay tuned for more updates from this space.

Yes Bank Sets Floor Price for FPO

Yes Bank will be in focus as the lender fixed floor price for its proposed follow-on public offer (FPO) at Rs 12 per share and a cap of Rs 13 per unit.

The fundraising is important for the bank to boost its capital base, especially after it announced last month that it has failed to make interest payments on its bonds, after the RBI said its capital adequacy ratio was below regulatory ratio.

On a reported book value basis, Yes Bank's FPO is priced below its FY20 book value and the 50% discount to current market price seems to partly capture the future pain. However, reports state that on adjusted book value basis, the FPO is priced at above 1x.

According to reports, though the discount suggests that there could be some short-term gains, valuations are not significantly attractive. Also, Yes Bank's asset quality concern, which could aggravate due to Covid-19-led economic disruptions, offer little comfort.

Meanwhile, the market regulator may look into a large amount of share transaction of the private lender under the Securities Lending and Borrowing Mechanism (SLBM) on July 9.

These transactions took place a day prior to the announcement of the bank's floor price for its FPO.

The FPO will open on July 15th.

Speaking of the banking sector, note that 2019 was brutal for some banking stocks.

The market severely punished them. This is due to issues such as worsening asset-quality, corporate governance, and inadequate capital.

Stocks such as Yes Bank and Lakshmi Vilas Bank have witnessed huge selling pressure.

Falling Knives in the Banking Sector

Falling stock prices could be enticing. After all, we love deep discounts and good bargains.

But if you're thinking of buying these stocks it's important to remember this point - If a stock is in a falling spree, there's probably a good reason behind it.

And realising this in a falling market is the first step towards correcting one's investing process.

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