Sensex Slips Again in Today's Trade; Realty & Pharma Stocks Plunge
Closing

Indian share markets continued to languish in red in the afternoon session on sustained foreign fund outflows and weak global markets. The sentiment also remained negative as concerns persisted over US- North Korea's war of words.

At the closing bell, the BSE Sensex closed lower by 296 points and the NSE Nifty finished down by 92 points. The S&P BSE Mid Cap finished down by 1.1% while S&P BSE Small Cap finished down by 2%. Losses were largely seen in realty stocks, pharma stocks and capital goods stocks.

Asian stock markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.50%, while the Hang Seng & the Shanghai Composite fell 1.36% and 0.33% respectively. European markets are mixed to lower as market participants digested election results out of Germany, where the nationalist Alternative for Germany won parliamentary seats for the first time. Shares in London are off as the FTSE 100 drops 0.29%. The CAC 40 is down 0.20% while the DAX in Germany is unchanged.

The rupee was trading at Rs 64.83 against the US$ in the afternoon session. Oil prices were trading at US$ 50.61 at the time of writing.

Software stocks finished the trading day on a weak note with NIIT Ltd share price and HCL Infosystems share price leading the loses.

As per a leading financial daily, the National Association of Software and Services Companies (Nasscom) is expecting the industry to deliver a strong performance in the next fiscal, on the back of revival of financial sector investments in tech spends along with demand uptick in the US.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Outlining the industry's annual guidance in June this year, Nasscom had said the Indian IT export would grow by 7-8% this fiscal, the same as the previous year, while the domestic infotech industry would expand at 10-11% during the period.

Nasscom President R Chandrasekhar, praising the re-strategising done by the Indian companies, said that this would also contribute the growth of IT sector. He also highlighted the company's focus on re-skilling employees on new digital technologies to drive growth. However, Nasscom President expressed concerns over the issues like stricter work visa regulations in key markets like the US and the UK and an uncertain business environment.

IT giants like TCS, Infosys were considered a safe bet at any price. The top 4 IT companies have underperformed the benchmark. With the sector heavily dependent on US customers, Trump's protectionist policy announcements have further dampened the mood in this sector.

Underperformance of Top IT Stocks

Also, with automation on the horizon, Indian IT companies' low-cost labor outsourcing is turning into a thing of the past. IT companies need to re-invent itself. Automation is needed in their traditional businesses like BPO, application management, and infrastructure management.

Moving on to news from oil & gas sector. As per an article in The Livemint, Oil and Natural Gas Corp. Ltd (ONGC) will acquire the government's 51.11% stake in Hindustan Petroleum Corp. Ltd (HPCL) through a bulk or block deal some time in November or December at the prevailing market price.

While the government is keen that the deal, which would fetch it over Rs 330 billion at the current market price, is done in October, as per the reports ONGC wants time to raise the money required for the acquisition.

ONGC will have to borrow about Rs 250 billion to fund just the purchase of the government stake. Half of the company's Rs 150 billion of cash has already gone into buying Gujarat State Petroleum Corp's stake in a KG basin gas block. Also, after accounting for capital expenditure requirement for the current year, ONGC will be left with Rs 40-50 billion.

ONGC share price finished the day on a flat note.

In another development, oil marketing companies are quietly drawing up plans to expand their modest presence in renewable energy space as the companies wary of being left behind in the race for renewables and electric vehicles.

The government is pushing solar and wind energy as well as electric vehicles, to curb oil imports and pollution, and meet its commitments under the Paris accord on climate change. Reportedly, India also pledged that by 2030, 40% of the country's electricity would come from non-fossil fuel.

As per an article in The Livemint, companies like Indian Oil Corporation is already exploring opportunities for setting up battery charging stations and battery replacement facilities for electric vehicles in its petrol pumps. Meanwhile, Bharat Petroleum Corp. Ltd (BPCL) sees 5% of its revenue coming from non-fossil fuel sources by 2021-22.

In news from retail sector, Shoppers Stop share price surged 20% in today's trade. This comes as the company recently announced that its board approved a proposal to sell 5% equity stake in the company for Rs 1.8 billion to Amazon NV Holdings LLC, the investment arm of the world's largest online retailer Amazon Inc.

As per the news, Amazon.com NV Investment Holdings, a foreign portfolio investor, will subscribe to about 43.95 lakh shares in Shoppers Stop at Rs 407.78 each on a preferential basis. The above partnership will help Shoppers Stop tap non-metro markets and aid its performance.


Indian Indices Continue Downtrend; Realty Stocks Top Losers
01:30 pm

After opening the day lower, share markets in India have continued the downtrend and are currently trading below the dotted line. Sectoral indices are trading on a negative note with stocks in the realty sector and stocks in the metal sector leading the losses.

The BSE Sensex is trading down by 363 points (down 1.1%), and the NSE Nifty is trading down by 120 points (down 1.2%). Meanwhile, the is trading down by 1.5%, while the BSE Small Cap index is trading down by 2.6% The rupee is trading at 64.83 to the US$.

In news from stocks in the FMCG sector. Herbal products major, Dabur announced a tie-up with US based e-commerce giant Amazon to set up an online ayurveda marketplace.

Through this portal the company aims to strengthen its presence in the fast-growing space of natural and herbal consumer products.

The online store will sell ayurveda brands, while offering consumers insights into the medicinal properties of ayurvedic products for treating various ailments

Dabur will take the lead on the content, while rival ayurveda brands listed with Amazon will be part of the marketplace.

Products by competitors - Himalaya and the Baba Ramdev-promoted Patanjali Ayurved would also feature on the web marketplace.

However, Dabur will get prime visibility with branding and banners on the e-store.

Last year, Patanjali products, Ramdev outlined plans to set up an online platform (Chikitsalaya) for ayurvedic consultation and treatment. It already has an e-commerce portal for its ayurvedic offerings.

Herbal Products in Focus

India's herbal and natural products market is on course to grow to about Rs 520 billion by 2020. To grab a slice of the growing market, FMCG majors such as HUL, Colgate-Palmolive, Garnier, Dabur, Emami, and Himalaya have raised the pitch in the past year.

Traditionally ayurvedic brands - Dabur and Himalaya - have also launched several new products in the herbal space.

With such intense competition and incumbents vying for market supremacy, India's FMCG space will be exciting to watch the next few years.

At the time of writing, Dabur share price was trading down by 0.3%.

Moving on to news from the steel sector. India's total export of finished steel in August jumped 36 per cent to 0.9 million tonne (mt), official data showed.

In the same month last year, the corresponding figure was 0.7 mt.

During April-August of 2017-18, the export of finished steel went up 57.1% to 3.7 mt, from 2.4 mt in the year-ago period.

However, imports too were higher. The import during last month at 0.9 mt was higher by 62% yoy. The import of finished steel during April-August came in at 3.5 mt, up 15.9%t, as against 2.9 mt in the previous year.

India was a net importer of total finished steel in August 2017, but maintained its net exporter status for the cumulative period, i.e. April-August 2017

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

India has become a net exporter of steel in 2016-17 as imports fell gradually.

Several measures, including the government's infrastructure push, along with 'Make in India' and other initiatives are set to bode well for the sector.

However, the government has consistently resorted to protectionist measures as regards the steel sector, to protect steel companies from international competition.

India's steel imports dropped 36% in 2016-17 to 7.4 million tonnes (MT). Meanwhile, steel exports in 2016-17 registered a growth of 102%. But, the steel makers are chasing imports out by ramping up production. In the April-May period, domestic steel output rose as large private steel producers such as Tata Steel and JSW Steel ramped up output.

The quantum jump in exports comes as the government is providing extensive support to the domestic steel industry by way of trade remedial measures, including anti-dumping.

But the bigger concern is weak consumption growth. The consumption data over the past few months clearly show that there are no takers for domestic steel.

We do not think the trend is sustainable. And unless domestic consumption picks up, steel producers may have to take price cuts to utilize their capacities.


Sensex Down Over 320 Points; Metal Stocks Witness Losses
11:30 am

After opening the day in the red, Indian share markets continued to witness selling pressure on the back of North Korea tensions. Sectoral indices are trading on a negative note with stocks from the realty sector, capital goods sector and the metal sector witnessing maximum selling pressure.

The BSE Sensex is trading down 320 points (down 1%) and the NSE Nifty is trading down 106 points (down 1.1%). Meanwhile, the BSE Mid Cap index is trading down by 1.6%, while the BSE Small Cap index is trading down by 2.4%. The rupee is trading at 64.81 to the US$.

In the news from IPO space, Capacit'e Infraprojects, a Mumbai-based construction company, whose initial public offer (IPO) saw a whopping 186-times subscription, has listed its shares on the exchanges today.

Share of the company got listed at Rs 399 apiece today. This represents a premium of around 60% to its issue price of Rs 250 per share.

Apart from the above, the IPO of SBI Life Insurance got subscribed 3.57 times last week. As per the data, the portions reserved for institutional investors and retail investors were subscribed 12.5 times and 0.8 times, respectively, while the portion set aside for high-net-worth investors saw 70% subscription.

SBI Life Insurance Company Limited is one of the leading life insurance companies in India. The company is a joint venture between India's largest bank State Bank of India (SBI) and the leading global insurance company BNP Paribas Cardif. SBI owns 74% of the total capital and BNP Paribas Cardif the remaining 26%. To know more about the company, you can read our IPO note on SBI Life Insurance Company Ltd (requires subscription).

One shall note that insurance protection in India remains grossly inadequate. This explains the huge protection gap of US$ 8.5 trillion for the country as of 2014. As per a Swiss Re report, India's protection gap stood at a staggering 92% and was the highest among all countries in the Asia Pacific, as can be seen in the below chart.

Insurance Protection Deficient in India

What this means is that for US$ 100 of insurance protection required, the country had insurance protection of a mere US$ 8 as of 2014. This is abysmally inadequate with a large part of the population still bereft of protection coverage.

What this also means is that there remains a huge growth potential for the life insurance sector in India. As we wrote in a recent edition of The 5 Minute WrapUp...

  • Undoubtedly, the life insurance sector has huge potential for growth. Additionally, factors such as increasing youth population, rapid urbanisation, expanding financial literacy, and higher government focus on financial inclusion and risk coverage will spur demand further for insurance products in the country.

    Therefore, with the stock markets buzzing, insurance companies are also making a beeline to capitalise on the IPO frenzy. After ICICI Prudential got listed last year, a number of both life and non-life insurance companies have lined up their IPOs this year.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

In other news, Shoppers Stop share price is witnessing buying interest today. This comes as the company recently announced that its board approved a proposal to sell 5% equity stake in the company for Rs 1.8 billion to Amazon NV Holdings LLC, the investment arm of the world's largest online retailer Amazon Inc.

As per the news, Amazon.com NV Investment Holdings, a foreign portfolio investor, will subscribe to about 43.95 lakh shares in Shoppers Stop at Rs 407.78 each on a preferential basis.

The above partnership will help Shoppers Stop tap non-metro markets and aid its performance.

At the time of writing, the share price of Shoppers Stop was trading up by around 16% on the BSE.


Sensex Opens in Red; Capacit'e Infraprojects Soars on Market Debut
09:30 am

Majority of the Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.30% while the Hang Seng is down 0.86%. While, the Nikkei 225 is trading is up 0.58%. US stocks closed slightly higher on Friday as worries about the Graham-Cassidy proposal to reform US health insurance eased and investors shrugged off concerns about North Korea.

Back home, share markets in India have opened the day on a negative note ahead of economic stimulus from the government later today. The BSE Sensex is trading lower by 142 points while the NSE Nifty is trading lower by 45 points. The BSE Mid Cap and BSE Small Cap index opened the day down by 0.1% & 0.2% respectively.

Sectoral indices have opened the day on a mixed note with stocks from and witnessing maximum selling pressure. While, and are leading the pack of gainers. The rupee is trading at 64.96 to the US$.

In the news from IPO space. Capacit'e Infraprojects, a Mumbai-based construction company, whose initial public offer (IPO) saw a whopping 186-times subscription, has listed its shares on the exchanges today.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Capacite has listed at the premium of Rs 175 in the opening trade.

The stock is listed on both NSE and BSE. Issue price of Capacit Infraprojects was fixed at Rs 245-250 per share.

Interestingly, with 186 times subscription Capacit'e Infraprojects' IPO becomes the most subscribed IPO of 2017. The portion of Capacit'e Infraprojects' IPO reserved for non-institutional investors was subscribed 651 times while the portion reserved for Institutional investors was subscribed 134 times.

To know more about the company, you can access our IPO note on the same in our IPO section.

However, with so many new IPOs set to hit the market, it is prudent to be ready with a strategy to take advantage of the frenzy.

It's good to be very selective when investing in IPOs. Carefully analyse each company for its own merits and don't give in to the hype surrounding the public offering.

That's Ankit Shah's approach at Equitymaster Insider. He keeps a sharp eye on developments in the IPO space and keeps his readers up to date on the big-ticket IPOs.

Ankit and his team of researchers constantly reference this handbook on investing in IPOs. You can download a copy for yourself. It's free. Just click here.

Moving on to the news from pharma sector. As per an article in a leading financial daily, Cadila Healthcare Ltd.'s subsidiary Zydus can now sell a hypertension drug in the American market., as it has received an approval from the US Food and Drug Administration (USFDA).

The drugmaker will manufacture the tablets at its formulation plant in Ahmedabad.

Reportedly, there are at least 75 million Americans who suffer from high blood pressure.

Further, the Amlodipine and Olmesartan Medoxomil tablets will be sold in four different strengths. With this, Cadila and Zydus together now have more than 150 approvals in the US.

Speaking of pharma sector, at a point in time, almost every stock in this space was considered a safe stock. You could just pick the top 5-6 companies from the sector and expect to make decent returns over a period of time.

But over the last two to three years, the pharma stocks have been anything but safe. In fact, the BSE Healthcare Index is down 24% in two years. In comparison, Sensex has gained 23% in the same period.

But the recent developments have been encouraging. Domestic growth seems to have bounced back post the GST impact. The Indian Pharmaceutical Market (IPM) which declined in July showed a 2.4% YoY growth in August.


Here's what Kunal Thanvi, our research analyst, recently wrote about the sector:

  • "Pharma companies which can adapt to these changes will thrive in the long run. The uncertainties highlight it important to be stock specific in the sector. It is crucial to look for companies with the competence and staying power to overcome the challenges."

So, what is key to identifying potential multibagger stocks? How does one pick them at the right time and ride them to their full potential? How many multibaggers do you really need to achieve the big riches that you desire?

Most importantly, are there any stocks right now that could turn out to be multibaggers? Click here to know everything that you need to know right now about mutlibagger stocks...

Cadila Healthcare share price opened down by 1%.


Elections in Germany, NTPC, PNB Share Price & Other Top Cues in Action Today
Pre-Open

Indian share markets languished in red in previous session as rupee hit its weakest point since early April amid concerns that the government's plan for an impetus to halt an economic slowdown may have a negative impact on the fiscal deficit. The sentiment also remained negative after North Korea said it might test a hydrogen bomb in the Pacific Ocean and escalated a war of words with US President Donald Trump.

At the closing bell last week, the BSE Sensex closed lower by 448 points and the NSE Nifty finished down by 157 points. The S&P BSE Mid Cap finished down by 2.7% while S&P BSE Small Cap finished down by 2.9%. Losses were largely seen in realty stocks, metal stocks and capital goods stocks.

Top Stocks in Focus

NTPC share price is expected to be in focus today as the company received shareholders' approval to raise Rs 150 billion via non-convertible bonds on private placement basis for capex, working capital and other corporate purposes. Besides, the shareholders also approved the proposal to confirm payment of interim dividend and declare final dividend for 2016-17.

In news from banking sector, PNB share price is expected to be in limelight today as the company plans to raise up to Rs5,000 crore equity capital from the markets to fund growth. As per the reports, the public-sector bank however did not give any indication as to whether it would be raised by diluting government equity or issuing Additional Tier-1 (AT1) bonds.

Infosys share price is expected to see some action as the company's wholly owned subsidiary Infosys Finacle, part of EdgeVerve Systems announced a partnership with ToneTag, a provider of near-field communications, payments and location based services using sound waves. Through this partnership, Finacle and ToneTag will offer a joint solution that will leverage the latter's sound wave technology to enable proximity payments and interactions.

As per a leading financial daily, SAIL aims to tap big into the steel demand in India, which is projected to become "the fifth- largest economy" this year. The company is armed with latest technologies and higher product mix. SAIL has done significant value addition in its product mix, with higher grades of steel from Rourkela Steel Plant's new plate mill for the oil and gas sector, SAIL HT-600 for the automotive sector and high strength LPG steel grade from Bokaro Steel Plant

Meanwhile, SAIL is also poised to install a new 3 million tonne per annum Hot Strip Mill at Rourkela Steel Plant (RSP) by 2018 in a bid to enlarge its basket of value added products.

In news from engineering sector, as per an article in The Hindu Business Line, BHEL will create a diversified portfolio for its next wave of growth that will include areas such as solar energy, transportation and water business. The company plans to go beyond thermal power and other areas for capitalising on emerging opportunities that include defence and aerospace to increase the company's share of business from non-coal areas.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

IPO Segment

The initial public offering (IPO) of Prataap Snacks Ltd was subscribed 43% on Friday, the first day of the IPO. The portion of shares reserved for retail investors and high net-worth investors were subscribed 28% and 2% respectively. The company has priced its shares in a range of Rs930-938 per share. The Rs480 crore IPO will close on 26 September.

The IPO comprises a fresh issue of Rs 2 billion. As per Livemint, the proceeds from the fresh issue will be used by the company for repaying borrowings, funding capital expenditure requirements for setting up new production lines, modernization of existing manufacturing facilities, and investment in subsidiary.

The market euphoria is something similar to what was seen in 2007-08. When everyone around you is clamoring to get a piece of the IPO pie, it makes sitting tight difficult. And, why should you sit tight when stocks like Avenue Supermart lets you pocket a cool 100% gain from day 1 of the listing?

History suggests that these cases are few and far between. More than 70% of the IPOs listed in 2007 and 2008 are in the red, even today when the Sensex is at an all-time high.

This allows us to stay on the fence when it comes to investing in IPOs. But it doesn't make sense to completely ignore this space. For every Reliance Power - like issue, there have been issues like Maruti, TCS, and Jubilant Foodworks Ltd (with returns over 4,000%, 1,000% and 500% respectively) that have created immense wealth for shareholders. A merit-based selection primarily including valuation, business, and management quality is the logical way to go about it.

RBI Eases Foreign Investment Regulations

As per a leading financial daily, the Reserve Bank of India changed the rules pertaining to the calculation of the foreign investment limit in so-called masala bonds. This could potentially open up more space for Indian companies to sell more such securities.

Masala bonds, or rupee-denominated bonds sold overseas, will not be part of the investment limit for foreign portfolio investors (FPIs) in corporate bonds and will instead be included under external commercial borrowings.

North Korea Continues to Weigh on Global Markets

US markets closed narrowly mixed last week as health care stocks recovered most of their losses. The Dow closed out its second consecutive week of gains, up 0.4% on the week.

Markets in Asia retreated last week on renewed tensions between North Korea and the United States - though China's debt position also worried investors. S&P cut China's sovereign credit rating for the first time since 1999, pointing to economic and financial risks from the country's soaring debt. Fitch as well as Moody's lowered their ratings for China earlier this year. The move could be prickly for the ruling Communist Party, ahead of a national congress next month.

European markets are expected to see some action as Germany will hold national elections for Chancellor on Sept. 24, with Angela Merkel seeking a fourth term. The election occurs at a time when Europe is enjoying an above-trend pace of economic growth and a broadening recovery.

Oil prices Remain Flat

Oil markets had a neutral reaction to OPECs uneventful meeting. OPEC met last week to consider the possibility of extending the production cuts beyond March 2018. The meeting was uneventful, with no decision taken in regard to recommendations on extending or deepening the production cut deal.

To keep a tab on the movements in crude oil and other commodities, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.