Sensex Ends 323 Points Lower; Realty and Banking Stocks Witness Selling
Closing

Indian share markets witnessed selling pressure throughout the day today and ended lower.

Benchmark indices slipped today following losses in global markets after the US Federal Reserve's policy-making committee indicated the overnight rate could stay close to zero for years to reach its 2% inflation target.

At the closing bell, the BSE Sensex stood lower by 323 points. Meanwhile, the NSE Nifty ended down by 88 points.

Hindalco was the top loser in NSE. Meanwhile, the top gainers in NSE today include Dr Reddy's Laboratories and Zee Entertainment.

SGX Nifty was trading at 11,526, down by 90 points, at the time of writing.

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The BSE Mid Cap index ended down by 0.2%. The BSE Small Cap index ended down by 0.5%.

On the sectoral front, realty stocks and banking stocks were among the hardest hit.

Asian stock markets ended on a negative note. As of the most recent closing prices, the Hang Seng ended down by 1.7% and the Shanghai Composite stood lower by 0.4%. The Nikkei ended down by 0.7%.

US stock futures are trading lower today, indicating a negative start for Wall Street indices.

Nasdaq Futures are trading down by 131 points (down 1.2%), while S&P Futures are trading down by 36 points (down 1%).

The rupee is trading at 73.66 against the US$.

Gold prices are trading down by 0.9% at Rs 51,370 per 10 grams. Over the last three weeks, gold is trading in a narrow range since hitting record highs of Rs 56,200 last month.

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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.

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

In our latest episode of Investor Hour Podcast, Jim Rogers joins Rahul Goel to talk about gold and more...

In the podcast, he tells that he was buying gold and silver and would buy even more. He believes you can get rich with investments in gold and silver.

In this freewheeling chat, he also talks about China, his view on the US dollar, the opportunities in agriculture, the bubble in tech stocks, bonds, bitcoin...and more.

Listen in to the podcast here.

You can also watch the podcast video here:

In news from the mutual funds space, the markets regulator is planning another set of reforms for mutual funds where it might revamp the mutual fund (MF) risk-o-meter.

As per an article in a leading financial daily, the market regulator will expand the MF risk-o-meter to include a "Very High" risk category.

The five existing categories of MFs are low, moderately low, moderate, moderately high and high.

The article added that risk in equity funds will be assesses on the basis of three parameters - market capitalisation, volatility, and impact cost.

Equity funds will be reclassified into the high and high risk categories. All credit risk funds will be moved to the new very high risk category.

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The report added that credit risk funds will be judged on the basis of quality, duration, and liquidity of bonds.

Asset management companies (AMCs) will be required an annual timeline of how the risk has evolved in each fund. Any change in a scheme's underlying assets should reflect in the scheme's risk classification.

Note that the proposal comes shortly after the regulator on September 13 modified norms on asset allocation by multi-cap funds.

The circular mandates multi-cap equity schemes to allocate 25% each to largecaps, midcaps, and smallcaps. The remaining 25% is up to the fund manager.

The regulator also issued a clarification on Sunday, suggesting that based on the preference of unit holders, mutual funds could consider rebalancing.

They also have an option to facilitate a switch for unitholders to other schemes. They could also merge the multicap fund with a largecap fund or convert it to large cum midcap fund.

Assuming every fund rebalances, Friday's circular is expected to trigger a move of around Rs 280 billion from largecaps to smallcaps.

Richa Agarwal, lead smallcap analyst at Equitymaster, believes this move would be net positive for select smallcap stocks. As per Richa, there could be a speculative rally across smallcaps.

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

  • It would be myopic and imprudent to bet on any smallcap in the hope of a regulation driven rally.

    That said, you must invest in smallcaps selectively with long-term horizon in mind.

    Here's why...
  • You see, despite the rally in smallcaps since March, there is still a huge valuation gap between smallcaps and Sensex.

    The ratio of smallcaps to Sensex stands at 0.37 now, as compared to long-term average of 0.44 times.

    This means certain smallcaps will witness a significant rebound, irrespective of regulations.

Richa believes this could be a once in a decade opportunity to get rich from select smallcaps.

Moving on to stock specific news...

Dhanuka Agritech was among the top buzzing stocks today.

Dhanuka Agritech share price rallied as much as 10% today, a day after the company approved the buyback of up to 10,00,000 equity shares at a final price of Rs 1,000 per share for an aggregate amount not exceeding Rs 1 billion.

The agrochemical company has fixed September 28, 2020 as the record date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback.

In other news, HSIL share price rallied over 10% after the company said it will consider share buyback next week.

Stock of the company hit its 52-week high, surpassing its previous high of Rs 71.35 hit on September 16, 2020.

"Meeting of the Board of Directors of the Company will be held on Monday, September 21, 2020 to consider the proposal of buyback of the fully paid-up equity shares of the Company," the company said in an exchange filing.

Speaking of buybacks, as a shareholder in cash rich companies, you should not only be wary of expensive buybacks. But if possible use it to your advantage to rake in some cash.

As per Rahul Shah, co-head of Research, investors should not assume buybacks are always good. Here's an excerpt of what he wrote in one of the editions of The 5 Minute Wrapup:

  • The reason behind the buyback must be investigated. At the end of the day, an increase in earnings should be more a function of the inherent robustness of the business, as that's what will help it continue to grow at a healthy pace.

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


Sensex Trades 329 Points Lower; Metal and Realty Stocks Witness Selling
12:30 pm

Share markets in India are presently trading on a negative note.

The BSE Sensex is trading down by 329 points (down 0.8%), at 38,951 levels.

Meanwhile, the NSE Nifty is trading down by 78 points (down 0.7%).

Hindalco is the top loser in NSE. Meanwhile, the top gainers in NSE today include Dr Reddy's Laboratories and HCL Technologies.

The BSE Mid Cap index is trading down by 0.5%. The BSE Small Cap index is trading down by 0.6%.

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On the sectoral front, metal stocks and realty stocks are witnessing maximum selling pressure.

The rupee is trading at 73.73 against the US$.

Gold prices are currently trading down by 0.7% at Rs 51,468.

Over last three weeks, gold is trading in a narrow range since hitting record highs of Rs 56,200 last month.

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.

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

In our latest episode of Investor Hour Podcast, Jim Rogers joins Rahul Goel to talk about gold and more...

In the podcast, he tells that he was buying gold and silver and would buy even more. He believes you can get rich with investments in gold and silver.

In this freewheeling chat, he also talks about China, his view on the US dollar, the opportunities in agriculture, the bubble in tech stocks, bonds, bitcoin...and more.

Listen in to the podcast here.

You can also watch the podcast video here:

HCL Technologies is among the top buzzing stocks today.

HCL Technologies share price hit a fresh 52-week high of Rs 817.45 apiece today. The stock surpassed its previous all-time high of Rs 809.85 apiece touched earlier this week.

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Buying interest was seen as yesterday, HCL Technologies and Google Cloud announced the expansion of their strategic partnership to bring HCL's Actian portfolio, starting with Actian Avalanche, to Google Cloud.

The company in a press release informed that Actian Avalanche is a high-performance hybrid cloud data warehouse designed to power an enterprise's most demanding operational analytics workloads.

HCL's Actian Avalanche hybrid cloud data warehouse has been deployed by Fortune 500 customers to deliver powerful insights to manage business complexities for a variety of use cases, including fraud detection, real-time offers and market basket analysis.

Earlier this week, in a mid-quarter update, HCL Tech informed that it has seen a strong execution during the quarter to date, and continues to execute the plan this month. The company said that the revenue growth for the current quarter is expected to exceed 3.5% sequentially in constant currency.

Moving on to news from the IPO space...

Happiest Minds Technologies shares surged on making their stock market debut today to trade at a price of Rs 383 per share. This meant a premium of Rs 217 on the upper band of the issue price of Rs 165-66 per share.

The stock was listed on the bourses at a price of Rs 351 per share. Happiest Minds shares began trading 131% higher from the issue price.

Happiest Minds Technologies IPO was subscribed 151 times with all portions being oversubscribed by the investors. Non-Institutional Investors (NII) had bid the most for the stock. The Bengaluru based Information Technology company, backed by 77-year old entrepreneur Ashok Soota, was commanding a grey market premium of Rs 140 per share till yesterday.

Strong and experienced promoters, along with a niche business model and exponential growth prospects are the prime reasons cited for the hefty premium in grey market.

Ashok Soota, promoter of Happiest Minds, was the founder of midcap IT firm Mindspace, which was later taken over by Larsen & Toubro group. The industry veteran previously had a long stint in Wipro from 1984 to 1999.

In other news, the public offer of Computer Age Management Services' (CAMS) will hit the primary market on Monday, September 21.

The firm has set the price band for the issue at Rs 1,229-1,230 per share. The initial public offering (IPO) will be an offer for sale (OFS) of 1,82,46,600 shares by NSE Investments which at the upper limit of the price band suggests an issue size of Rs 22.4 billion.

The anchor allotment will be announced on Friday and the IPO will close on Sep 23.

CAMS claims to be India's largest registrar and transfer agent with a market share of 69.4%, based on mutual funds' average assets under management, as of November 2019.

It offers integrated services for receipt, verification and processing of financial and non-financial transactions for the BFSI (banking, financial services and insurance) sector, largely the mutual fund industry.

How the above IPO sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments 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.


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

Asian stock markets are lower today after Federal Reserve Chair Jerome Powell highlighted uncertainty about the economic rebound.

The Hang Seng is down 1.9%, while the Nikkei 225 is trading down by 0.7%.

The Bank of Japan and the Bank of England will announce their respective policy decisions later in the day.

US shares rose yesterday with the Fed's statement but then reversed gains as Fed Chairman Jerome Powell said the pace of the ongoing economic recovery is expected to slow.

Overnight, the US Federal Reserve pledged to hold interest rates near zero until at least 2023. The Fed said it would keep interest rates near zero until inflation is on track to "moderately exceed" the central bank's 2% inflation target "for some time," with the aim of offsetting years of weak inflation and allowing the economy to add jobs for as long as possible.

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Back home, Indian share markets have opened on a negative note, tracking weak global cues.

The BSE Sensex is trading down by 219 points. Meanwhile, the NSE Nifty is trading lower by 49 points.

ONGC and HCL Tech are among the top gainers today. ICICI Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened down by 0.2%. The BSE Small Cap index is trading down by 0.1%.

Sectoral indices are trading on a negative note with stocks in the banking sector and finance sector witnessing most of the selling pressure.

The rupee is currently trading at 73.48 against the US$.

Gold prices are currently trading down by 0.9% at Rs 51,377 per 10 grams.

Over the last three weeks, gold is trading in a narrow range since hitting record highs of Rs 56,200 last month.

{inlineads2}

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.

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

In our latest episode of Investor Hour Podcast, Jim Rogers joins Rahul Goel to talk about gold and more...

In the podcast, he tells that he was buying gold and silver and would buy even more. He believes you can get rich with investments in gold and silver.

In this freewheeling chat, he also talks about China, his view on the US dollar, the opportunities in agriculture, the bubble in tech stocks, bonds, bitcoin...and more.

Listen in to the podcast here.

You can also watch the podcast video here:

Moving on to stock specific news...

Dr Reddy's Lab is among the top buzzing stocks today.

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Dr Reddy's and the Russian Direct Investment Fund (RDIF) have agreed to conduct clinical trials and distribute 100 million doses of Russia's Sputnik V Covid-19 vaccine in India.

"Upon regulatory approval in India, the RDIF shall supply to Dr Reddy's 100 million doses of the vaccine," said Dr Reddy's in a statement.

The Sputnik V vaccine, which is based on human adenoviral vector platform, is undergoing clinical trials.

Deliveries could potentially begin in late 2020, subject to completion of successful trials and registration of the vaccine by regulatory authorities in India.

Dr Reddy's Lab share price has opened the day up by 1%.

To know more, you can access Dr Reddy's latest quarterly results on our website.

Here's an interesting data on Dr. Reddy's Lab, investing just Rs 100,000 in Dr. Reddy's Labs in 1992, it would have given a whopping Rs 4.89 crores in 2014!

Profit Opportunities in the Rebirth of India

Co-head of Research, Tanushree Banerjee believes, the opportunities in the Rebirth of India are not only more profitable than the ones in 1991 but the gains could come faster too.

Moving on to news from the engineering sector, the Shapoorji Pallonji group has told group company Sterling and Wilson Solar that it is unable to repay pending dues to the tune of over Rs 10 billion that were due in June and September.

The repayment is part of dues worth Rs 26.44 billion that the promoters owe to Sterling & Wilson Solar. The loan was to be repaid within 90 days of Sterling and Wilson Solar's IPO, which ended mid-November 2019.

The promoters had sought an extension for repaying the loans, blaming significant and rapid deterioration in the credit markets.

The promoters have so far repaid Rs 15 billion to the company, with Rs 5 billion due on 30 June and rest due by 30 September.

On Wednesday, the company told stock exchanges that it has been paid an amount of Rs 1 billion as on date out of June 2020 instalment of Rs 5 billion, and that the promoters have sought time till September 2021 to repay the rest of the dues.

Note that Shapoorji group's inability to repay the dues comes at a time when its efforts to raise funds by pledging its shares in Tata Sons have been challenged by the Tata group. Shapoorji holds around 18% in Tata Sons.

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.


SGX Nifty Trades Lower, Auto Sector's Urge to Reduce Taxes, June Quarter Results, and Top Buzzing Stocks Today
Pre-Open

Indian share markets ended higher yesterday.

Benchmark indices edged higher, ahead of the outcome of a two-day policy meeting of the US central bank. Hopes of an early vaccine also improved sentiment.

At the closing bell yesterday, the BSE Sensex stood higher by 259 points. Meanwhile, the NSE Nifty stood higher by 83 points.

M&M and Bajaj Auto were among the top gainers. IndusInd Bank, on the other hand, was among the top losers.

The BSE Mid Cap index ended up by 0.2%. The BSE Small Cap index ended up by 0.4%.

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Sectoral indices ended on a positive note with stocks in the realty sector and auto sector witnessing maximum buying interest.

At 8:10 am today, the SGX Nifty was trading down by 72 points, or 0.63% lower at 11,540 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Gold prices were trading up by 0.3% at Rs 51,920 at the time of closing stock market hours yesterday.

Domestic gold and silver prices traded in a narrow range yesterday ahead of the US Fed decision. Over last three weeks, gold is trading in a narrow range since hitting record highs of Rs 56,200 last month.

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.

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

{inlineads2}

In our latest episode of Investor Hour Podcast, Jim Rogers joins Rahul Goel to talk about gold and more...

In the podcast, he tells that he was buying gold and silver and would buy even more. He believes you can get rich with investments in gold and silver.

In this freewheeling chat, he also talks about China, his view on the US dollar, the opportunities in agriculture, the bubble in tech stocks, bonds, bitcoin...and more.

Listen in to the podcast here.

You can also watch the podcast video here:

Top Stocks in Focus Today

M&M will be among the top buzzing stocks today after it was reported that Mahindra and Mahindra's overseas subsidiary SsangYong Motor was close to signing a binding investment agreement with US-based HAAH Automotive Holdings.

Mahindra currently holds a 74.7% stake in SsangYong.

Take Solutions share price will be in focus after the company announced that the management has taken into consideration the impact of known internal and external events arising from COVID-19 pandemic in the assessment of recoverability of trade receivables, contract assets and certain investments in subsidiaries.

The liquidity and business constraints, consequent to impact of COVID 19 pandemic, have significantly hampered the operations of a step-down subsidiary viz.

Market participants will also track Sterlite Technologies share price as the company announced a partnership with Bharti Airtel to build a modern optical fibre network for the telco across 10 telecom circles.

Sterlite Technologies said this modern optical network will enable Airtel to deliver world-class customer experience through enhanced scalability, reduced latency, and improved bandwidth.

Indian Auto Industry Urges Central Government to Reduce Taxes

In news from the automobile sector, India's automobile industry has urged the central government to reduce taxes before the festive season to counter the price increase on Bharat Stage-VI vehicles and support demand revival.

Representatives of leading automakers, including Toyota Kirloskar Motor India, Maruti Suzuki, Mahindra and Mahindra and Hero MotoCorp, said a cut in goods and services tax (GST) on automobiles will help the sector, which had been struggling for more than a year even before the covid-19 outbreak.

Earlier this week, a report quoted Shekar Viswanathan, vice chairman, Toyota, saying that high taxes on cars keep companies at bay from building scale in India.

Later in a statement, Toyota said the auto industry has been requesting the government to support the industry through a viable tax structure. Toyota's cars, including Innova and Fortuner, attract 43% tax at the current GST rates.

The Union minister for environment, forest and climate change, had also suggested that the Centre was evaluating the possibility of GST cuts for two and three-wheelers to revive demand.

Earlier this month, auto stocks were in focus after Union Road Transport and Highways Minister Nitin Gadkari said that a vehicle-scrappage policy was in its final stages of approval and could even be rolled out by month-end.

Reports stated that the vehicle scrappage policy aims to provide customers incentives to exchange old vehicles, which in turn will be used in recycling clusters - ultimately cutting costs of raw materials. It is also expected to boost demand for new vehicles in a Covid-hit economy.

Society of Indian Automobile Manufacturers (SIAM) estimates vehicle sales to decline 25-45% in FY21.

During April-August, passenger car and utility vehicle wholesales fell 54% and 38%, respectively, year-on-year.

How all these developments pan out in the coming days remains to be seen. Meanwhile, we will keep you updated on all the news from this space.

Q1FY20 Results: JB Chemicals and Procter & Gamble Health

JB Chemicals reported strong earnings driven by growth in exports, API, and chronic therapies in the domestic market.

JB Chemicals' consolidated net profit for the quarter ended June 2020 (Q1FY20) nearly doubled to Rs 1,190 million. Sales during the quarter grew 18.4% at Rs 5.2 billion against Rs 4.4 billion in the corresponding quarter of the previous fiscal.

Earlier in July, global investment firm KKR & Co. Inc entered into an agreement to acquire 41.7 million equity shares of JB Chemicals, representing 54%, from the promoters of the company.

As part of the deal, KKR acquired the stake from the founding Mody family at Rs 745 per share.

Procter & Gamble Health reported 10.8% year on year (YoY) growth in net profit at Rs 489 million for June quarter.

The pharma company reported 11% YoY decline in sales at Rs 2 billion, as the business operations got impacted across the country following the nationwide lockdown imposed to contain the spread of Covid-19.

The board of directors of the company recommended a final dividend of Rs 230 per equity share for the financial year ended June 30, 2020.

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