Sensex Ends 214 Points Higher; Banking and Power Stocks Witness Buying
Closing

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

At the closing bell, the BSE Sensex stood higher by 214 points. Meanwhile, the NSE Nifty stood higher by 59 points.

NTPC and Asian Paints were among the top gainers today.

SGX Nifty was trading at 11,376, up by 77 points, at the time of writing.

The BSE Mid Cap index ended up by 0.6%. The BSE Small Cap index ended up by 1.4%.

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Sectoral indices ended on a positive note with stocks in the banking sector and power sector witnessing buying interest.

Asian stock markets ended on a positive note. As of the most recent closing prices, the Hang Seng was up 1.3% and the Shanghai Composite stood higher by 0.5%. The Nikkei ended up by 0.2%.

The rupee is trading at 74.93 against the US$.

Gold prices are trading down by 0.5% at Rs 51,900 per 10 grams.

In the previous session, gold had slumped 1.8% or Rs 950 per 10 gram while silver had crashed 2% or Rs 1,400 per kg.

Gold prices have been volatile in India after hitting a new high of Rs 56,191 per 10 grams.

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Speaking of gold, note that the media and experts have been taking potshots at Buffett of late for buying a gold mining stock. This seems to be an acknowledgement of his mistake in not buying gold a decade back.

But is this truly a case of 'error of omission' as Buffett would call it? Is Buffett's exposure to gold significant?

Should you too shun stocks and significantly increase your exposure to the yellow metal?

Co-head of research at Equitymaster, Tanushree Banerjee answers all these questions in her latest video.

Tune in to find out more:

Moving on to stock specific news...

Aarti Drugs was among the top buzzing stocks today.

Aarti Drugs share price witnessed huge buying interest and rose 10% today after the Board of Directors approved the issuance of fully paid-up bonus share.

The Board of Directors at its Meeting held on August 20, 2020, have approved the issuance of fully paid-up bonus shares in the ratio of 3:1 i.e. three bonus equity shares of Rs 10 each for one fully paid-up equity share of Rs 10 each.

Strides Pharma Science share price was also in focus today after the company in a regulatory filing said it has received the approval of US health regulator (USFDA) for Ursodiol Tablets used for treatment of patients with primary biliary cirrhosis (PBC).

PBC is a progressive disease of the liver caused by a buildup of bile within the liver that results in damage to the small bile ducts that drain bile from the liver. The product is a generic version of Urso 250 tablets, 250 mg, and Urso Forte Tablets, 500 mg, of Allergan Sales, LLC.

The product will be manufactured at the company's flagship facility at Bengaluru and will be marketed by Strides Pharma in the US market. The company has 126 cumulative ANDA filings with USFDA of which 88 ANDAs have been approved and 38 are pending approval.

On the results front, the company had reported over four-fold rise in its consolidated net profit at Rs 1,018.4 million for the quarter ended June 30, 2020. Total income of the company stood at Rs 7.9 billion in the quarter under consideration as compared to Rs 6.9 billion in the same period a year ago.

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In news from the financial space, after pulling out massive funds in March quarter, foreign investors pumped in nearly US$ 4 billion in Indian equities in the three months ended June. The foreign fund inflows were seen on the back of attractive valuations, lifting of lockdown curbs and the government's efforts to kickstart economic activity.

Besides, foreign portfolio investors' (FPIs) assets in Indian equities too surged after a sharp fall in the previous quarter. The value of their investments in Indian stocks climbed significantly during the quarter ended June 2020.

As of the quarter ended June, the value of FPI investments in Indian equities stood at around US$ 344 billion, which was considerably higher than the US$ 281 billion registered in the preceding quarter and meant a spike of 23%.

In other similar news, June quarter of FY21 saw foreign institutional investors' (FIIs) holdings in Nifty500 companies at a near 5-year low.

As per a report by leading brokerage firm, even though the FII holdings increased marginally in Q1 by 8 bps quarter-on-quarter (QoQ), it declined 130 bps year-on-year (YoY) to 20.8%.

FIIs reduced ownership by 68% in Nifty 500 and 74% in Nifty50 companies QoQ.

Insurance, consumer, oil & gas were among the sector that saw FIIs increase stake in them while PSU banks, NBFCs, telecom, technology were among the sectors in which FIIs reduced stake.

How this trend pans out in the coming quarters remains to be seen. Meanwhile, we will keep you updated on all the developments from this space. Stay tuned.

Speaking of the finance sector, note that the market crash impacted all stocks, but finance stocks took the worst hit.

Even as the Sensex has made a comeback to pre-Covid levels, the slowdown and asset quality concerns amid the moratorium extension, is an overhang on the financial sector.

Richa Agarwal, lead Smallcap Analyst at Equitymaster, expects a long road to recovery for this sector.

Here's what she wrote about it in today's edition of the Profit Hunter:

  • Just to be sure, being cautious in this sector makes sense to me.

    However, I believe it would be folly to paint all financial stocks with the same brush.

    Financials, especially NBFCs, have gone through multiple disruptions and challenges in the last few years - demonetisation, the IL&FS crisis, and now...coronavirus and moratoriums.

    This has led to a liquidity squeeze for these players, due to a risk aversion attitude among investors and lenders.

    The streak of disruptions will force inefficient and unorganised players in this sector to scale back.

    I also see a consolidation happening. The survivors and beneficiaries of this shift will be the well capitalised companies with balanced growth and high asset quality.

    Investors who identify these stocks now and are willing to be patient with returns, will be rewarded with huge rebound gains.

Last week, Richa recommended one such stock - a high quality NBFC. Subscribers can read the report here.

And if you are not a Hidden Treasure subscriber, here's where you can sign up.

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


Indian Indices Trade Higher; Power Grid & SBI Top Gainers
12:30 pm

Share markets in India are presently trading on a positive note, tracking a rally in global markets.

The BSE Sensex is trading up by 285 points, up 0.7%, at 38,500 levels.

Meanwhile, the NSE Nifty is trading up by 79 points.

Power Grid and SBI are among the top gainers today.

The BSE Mid Cap index is trading up by 0.8%.

The BSE Small Cap index is trading up by 1.5%.

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

Speaking of stock markets, a few months back, Richa Agarwal, lead smallcap analyst at Equitymaster, wrote to you about an urgent opportunity in smallcaps...in 5 smallcaps to be precise.

Her efforts have paid off well. Every single smallcap in the list has offered gains, beating the benchmark indices by a handsome margin as can be seen in the chart below.

But even if the gains had not come, Richa's conviction in these 'Essential stocks' would not have been any less. That's because these are coffee can stocks.

Some of these stocks are still in the buying range...and offer strong upside in the long term. Hidden Treasure subscribers can read the report here (requires subscription).

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Moving on, the rupee is currently trading at 74.87 against the US$.

Gold prices are currently trading up by 0.2% at Rs 52,262.

In the previous session, gold had slumped 1.8% or Rs 950 per 10 gram while silver had crashed 2% or Rs 1,400 per kg.

Gold prices have been volatile in India after hitting a new high of Rs 56,191 per 10 grams.

Speaking of gold, note that the media and experts have been taking potshots at Buffett of late for buying a gold mining stock. This seems to be an acknowledgement of his mistake in not buying gold a decade back.

But is this truly a case of 'error of omission' as Buffett would call it? Is Buffett's exposure to gold significant?

Should you too shun stocks and significantly increase your exposure to the yellow metal?

Co-head of research at Equitymaster, Tanushree Banerjee answers all these questions in her latest video.

Tune in to find out more:

Divi's Laboratories and SBI Life Insurance are among the top buzzing stocks today.

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Shares of both the companies rallied up to 5%, a day after the NSE Indices, a subsidiary of the National Stock Exchange (NSE) announced that both the stocks will enter the benchmark index Nifty50 from September 25, 2020.

Shares of Divi's Laboratories hit an all-time high of Rs 3,333.60 in the early trade, with its market capitalisation nearing Rs 900 billion.

On the other hand, Zee Entertainment Enterprises (ZEEL) is trading marginally higher while Bharti Infratel is trading. Both these stocks will be dropped from the Nifty50 index, NSE Indices said in a statement.

For the quarter ended June 2020, Divi's Lab reported a net profit of Rs 4.9 billion on account of robust sales. In comparison, the company had logged a profit of Rs 2.7 billion in the year-ago same period.

SBI Life Insurance, on the other hand, reported a 5% increase in net profit at Rs 3.9 billion for the first quarter of the current fiscal.

Moving on to news from the telecom sector, the Supreme Court on Thursday expressed concern over how statutory adjusted gross revenue (AGR) dues of bankrupt telecom companies would be recovered if their spectrum were transferred during the insolvency resolution process.

The court asked the telecom department who would pay the AGR dues of ailing telcos Reliance Communications, Aircel and Videocon, which are resolving cases under the Insolvency and Bankruptcy Code.

A three-judge bench led by Justice Arun Mishra asked solicitor general Tushar Mehta to provide this information and submit details of the spectrum held by these companies since 1999.

"We are extremely worried that all AGR dues will be wiped out in the IBC process. After the spectrum sale, the new user will deny pending demands against the spectrum," he observed.

The bench is examining claims that telcos facing insolvency proceedings were in no position to pay their AGR dues, estimated at over Rs 400 billion.

The bench asked the Department of Telecommunications (DoT) if the AGR dues of Videocon and Aircel could be fixed on Bharti Airtel, which had traded spectrum with both.

Bharti Airtel, through senior advocate Kapil Sibal, insisted that Airtel had already paid most of its AGR dues and was not party to any resolution process.

The ailing telcos have urged the court to treat them as a separate class because they were in no position to pay.

We will keep you updated on the latest 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 Opens Strong; Power and Metal Stocks Lead
09:30 am

Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.5% while the Hang Seng is up 0.7%. The Nikkei 225 is trading up by 0.3%.

Among global indices, Nasdaq ended at a record high yesterday, with the S&P 500 and Dow also rising, as gains in heavyweight tech stocks outweighed downbeat data that affirmed the Federal Reserve's view of a difficult road to economic recovery.

Back home, Indian share markets have opened the day on a higher note tracking the positive trend in SGX Nifty.

The BSE Sensex is trading up by 282 points.

The NSE Nifty is trading higher by 83 points.

Meanwhile, the BSE Mid Cap index has opened up by 1%.

BSE Small Cap index is also trading higher by 0.9%.

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Sectoral indices are trading in green with BSE Power Index witnessing maximum buying interest.

Among the top gainers in the metals index include BHEL and Adani Transmission.

Moving on, the rupee is currently trading at 75.03 against the US$.

Gold prices are currently trading down by 0.9% at Rs 52,151.

Gold and silver prices continued to decline for the second in Indian markets.

On MCX, October gold futures were down Rs 700 to Rs 51,915 per 10 grams. Tracking gold, silver futures were also down Rs 900 to Rs 67,028 per kg.

In the previous session, gold had slumped 1.8% or Rs 950 per 10 gram while silver had crashed 2% or Rs 1,400 per kg.

Gold prices have been volatile in India after hitting a new high of Rs 56,191 per 10 grams.

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In global markets, gold rates today recovered some ground after slumping more than 3.5% to a near one-week low in the previous session.

Today, spot gold was up 0.5% at US$1,940 per ounce.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

Even with the recent volatility in prices, gold and silver remain among the best performing commodities this year to combat the fallout from the coronavirus pandemic. Earlier this month, gold had hit a record high of Rs 56,191 in Indian markets amid a global rally.

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So, is it time to book profits in gold and silver?

In this video below, India's no. 1 trader, Vijay Bhambwani tells what he thinks you should do with your bullion holdings.

Tune in here:

To know more about gold, just visit our Youtube Playlist on gold investing.

Moving on to the stock specific news...

Indian Overseas Bank is among the top buzzing stocks after the bank reported a standalone net profit of Rs 1.2 billion for the June quarter of FY21 as provisions declined and other income rose.

The bank had reported a net loss at Rs 3.4 billion during corresponding quarter previous year.

The bank's net interest income grew 9.6% year-on-year (YoY) to Rs 14.1 billion for the quarter ended 30 June over Rs 12.9 billion in the same quarter last year.

The bank's other income rose 39.1% YoY during the quarter under review. Its total provisions fell 16.3% during the June quarter.

Indian Overseas Bank's asset quality improved in the June quarter with gross bad loan ratio percentage of bad loans to total advances falling 863 basis points (bps) YoY to 13.9%. Its net non-performing asset (NPA) ratio was down 594 bps on a YoY basis to 5.1% in Q1FY21.

The bank's total advances were at Rs 1.2 trillion in Q1FY21, a decrease of 6.97% over the same period last year. Total deposits stood at Rs 2.3 trillion, an increase of 1.98% over 30 June last year.

Indian Overseas Bank share price opened the day up by 4.6%.

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


SGX Nifty Trades 82 Points Higher; Indicates Positive Open for Indian Stock Markets
SGX Nifty

The SGX Nifty opened on a positive note today.

At 8:15 am today, it was trading up by 82 points, or 0.7% higher at 11,381 levels.

Indian share markets are headed for a positive opening today following the positive trend on SGX Nifty.

Asian stock markets are higher today.

The Shanghai Composite is up 0.4% while the Hang Seng is up 0.5%. The Nikkei 225 is trading up by 0.3%.

In the US, Nasdaq ended at a record high yesterday, with the S&P 500 and Dow also rising, as gains in heavyweight tech stocks outweighed downbeat data that affirmed the Federal Reserve's view of a difficult road to economic recovery.

The Dow Jones Industrial Average rose 0.2%, while the Nasdaq Composite gained 1.1%.

Stay tuned for more updates on Indian stock markets in the upcoming commentary.

To keep a track of SGX Nifty movements, visit the SGX Nifty page for the latest updates.


Falling Crude Oil Prices, IPO Buzz, and Top Stocks in Focus Today
Pre-Open

On Thursday, Indian share markets witnessed selling pressure throughout the day and ended deep in the red, tracking weak global cues.

At the closing bell on Thursday, the BSE Sensex stood lower by 394 points (down 1%).

The NSE Nifty closed lower by 96 points (down 0.8%).

HDFC and Axis Bank were among the top losers.

The BSE Mid Cap index ended up by 0.9%. The BSE Small Cap index ended up by 0.7%.

On the sectoral front, losses were largely seen in the telecom sector and banking sector.

At 8:15 am today, the SGX Nifty was trading up by 87 points, or 0.77% higher at 11,380 levels. Indian share markets are headed for a positive opening today following the positive trend on SGX Nifty.

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Hotel, Sugar & Power Stocks in Focus

Hotel stocks such as EIH, Indian Hotels, Lemon Tree, and Chalet Hotels witnessed buying interest yesterday, buoyed by the possibility of hotels reopening in the national capital after a stringent Covid-19 induced lockdown since March 2020.

According to reports, the Delhi Disaster Management Authority on Wednesday approved re-opening of all hotels in the capital besides allowing weekly markets on a trial basis.

Other hotel and resort industry stocks such as Mahindra Holiday, Country Club Hospitality Hotels, Westlife Development, Kamat Hotels, TajGVK Hotel, Asian Hotels and Oriental Hotels gained in the range of 2-3%.

Meanwhile, shares of most sugar companies were trading on a positive note yesterday even as the government raised sugarcane floor price by 3.6%.

The Union Cabinet on Wednesday decided to increase the minimum price sugar mills pay to sugarcane growers, also known as Fair and Remunerative Price (FRP), by Rs 10 per quintal to Rs 285 for the next marketing year starting October 2020, according to an official statement.

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Stocks from the power sector also witnessing huge buying interest as the Cabinet Committee on Economic Affairs (CCEA) relaxed the borrowing limits for the state government-owned power distribution companies (discoms) as a one-time measure.

Currently, discoms can borrow only up to 25% of their previous year's working capital under the limits stipulated in the UDAY scheme. Borrowing were tied to discoms' operational performance to ensure discipline.

The limit, however, has now been relaxed for a one-time lending. This would help those discoms that have exhausted their borrowing limits and will assist power retailers to clear their dues to generation and transmission companies to help reduce stress in the sector.

Stocks such as Tata Power, Power Finance Corporation, and REC were among the top gainers from the power sector on the back of above news.

Tata Power share price was also in focus after the company exhibited its current business structure along with plans to achieve the aim of becoming one of the top 2 energy companies in India in the future.

Airbnb Files for IPO

In latest news from the IPO space, short-term home rental company Airbnb Inc said it filed confidentially for an initial public offering with US regulators, setting the stage for one of 2020's marquee US stock market debuts.

San Francisco-based Airbnb said in July that customers had booked more than 1 million nights in a single day for the first time since March 3, in part as US travellers shy away from hotels and prefer to drive to local vacation rentals.

Companies can confidentially submit an IPO registration with the US regulator. If Airbnb moves forward with the IPO, the filing would be made public closer to the time of the listing.

The collapse of Airbnb's core home-rental business due to the COVID-19 pandemic had prompted Airbnb to suspend marketing activities for the year and cut about 25% of its workforce.

In other news, Equitas Small Finance Bank's initial public offer (IPO) will be done once normalcy in business operations is restored after the delay caused by disruptions due to the spread of Covid-19 pandemic, said the promoter of the bank Equitas Holdings.

Earlier this year in February, the company had received in principle approval from markets regulator for an IPO worth Rs 5.5 billion and an offer-for-sale (OFS) of 80 million equity shares by the holding company.

How the above developments pan out in the coming months remains to be seen. Stay tuned for more updated from this space.

Global Stock Market Drivers

Asian and European share markets fell on Thursday, after the US Federal Reserve's latest meeting minutes highlighted doubts about the recovery of the world's largest economy and knocked Wall Street indices from recent record highs.

The Fed's minutes from its July meeting, which were released on Wednesday, highlighted doubts about the US economic recovery, showing that the swift labour market rebound seen in May and June had likely slowed.

Several Fed policymakers said they may need to ease monetary policy to help get the economy through the coronavirus pandemic.

Despite the dovish minutes, US Treasury yields and the dollar rose with investors focusing on parts of the minutes that showed policymakers downplaying the need for yield caps and targets.

Crude Oil Prices Fall amid Demand Concerns

Crude oil prices fell on Thursday on demand concerns driven by cautious views from OPEC+ producers and the US Federal Reserve regarding economic recovery from the coronavirus pandemic.

At the time of writing, Brent crude was down 44 cents, or 1%, at US$ 44.93 a barrel, and West Texas Intermediate (WTI) US oil fell 44 cents to US$ 42.49 a barrel.

The Organization of the Petroleum Exporting Countries and its allies, known an OPEC+, said on Wednesday that the pace of oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.

The group pressed oil nations pumping above output targets to cut more in August-September due to concerns about the strength of recovery in demand.

Prices were also pressured after several US. Fed members said additional monetary policy easing may be needed because a rebound in employment was already slowing.

The US Energy Information Administration (EIA) said on Wednesday that US fuel demand fell by more than 2 million barrels per day (bpd) to 17.2 million bpd in terms of product supplied.

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

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