Sensex Ends Marginally Higher; Consumer Durables and FMCG Stocks Witness Buying
Closing

Indian share markets continued to witness volatile trades during closing hours today and ended marginally higher, lifted mainly by FMCG stocks.

The BSE Sensex ended the day up by 95 points.

Meanwhile, the NSE Nifty stood higher by 25 points.

The top gainers in NSE today were Grasim, Tech Mahindra and Titan.

SGX Nifty was trading at 11,248, up by 14 points, at the time of writing.

Both, the BSE Mid Cap index and the BSE Small Cap index ended on a flat note.

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Sectoral indices ended on a mixed note with stocks in the FMCG sector and consumer durables sector witnessing buying interest.

Meanwhile, telecom stocks witnessed selling pressure.

Asian stock markets ended on a mixed note. As of the most recent closing prices, the Hang Seng was up 1% and the Shanghai Composite stood lower by 0.2%. The Nikkei ended down by 1.5%.

US stock futures are trading lower, indicating a negative opening for Wall Street indices. Nasdaq Futures are trading down by 122 points (down 1.1%), while Dow Futures are trading down by 266 points (down 1%).

The rupee is trading at 73.76 against the US$.

Gold prices are trading down by 0.7% at Rs 50,365 per 10 grams.

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Domestic gold and silver prices fell sharply, tracking softness in global rates. In the previous session, gold had surged 1% or about Rs 500 while silver had jumped Rs 1,900 per kg.

Gold has given up significant gains after hitting a record high of Rs 56,200 on August 7. Earlier this week, it had dipped below Rs 49,500 before seeing some recovery.

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.

The recent price volatility in the bullion market has rattled many traders. Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

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So is the rally over? Will gold and silver prices fall?

India's #1 trader Vijay Bhambwani doesn't think so. Vijay believes the bull market still has a long way to go.

In his latest video, he tells you why. Tune in to find out more:

Moving on to stock specific news...

Bharat Petroleum Corporation (BPCL) was among the top buzzing stocks today.

Shares of the company slipped over 9% in intraday trade today after the government extended deadline to submit expression of interest (EoI) for the company's privatization to November 16, 2020.

The government on March 7, 2020, had issued a Preliminary Information Memorandum document (PIM) for inviting Expression of Interest (EoI) for strategic disinvestment of BPCL.

"In view of further requests received from the Interested Bidders (IBs) and the prevailing situation arising out of Covid-19 pandemic, the last date for submission of EoIs is further extended to 16th November 2020," the circular said.

According to a Reuters report, Rosneft and Saudi Aramco are unlikely to bid in the privatization of the state-owned refiner.

A Rosneft source told that it will not buy BPCL, while another source said the Russian oil major would only be interested in BPCL's marketing business which is comprised of fuel depots and more than 16,800 fuel stations.

The government is proposing to sell its entire shareholding in BPCL, comprising 1.14 million equity shares which constitutes 52.98% of BPCL's equity share capital, along with transfer of management control to a strategic buyer as part of its strategic disinvestment.

BPCL share price ended the day down by 9%.

Market participants were also tracking Advanced Enzyme Technologies share price.

Shares of the company hit a fresh 52-week high of Rs 339, rallying 13% on the back of heavy volumes. In the past one week, stock of the agricultural products company has zoomed as much as 45% after foreign portfolio investors (FPIs) bought nearly 4% stake in the company via open market.

Moving on to news from the IPO space, the Rs 21.6-billion initial public offering (IPO) of UTI Asset Management Company, the eighth-largest asset management company in India in terms of mutual fund QAAUM, was subscribed 57% at the time of writing.

The IPO received bids for 15.5 million equity shares against an offer size of 27.3 million equity shares.

The response seems to be tepid when compared to Mazagon Dock Shipbuilders and Likhitha Infrastructure IPOs that too are open for subscription.

However, these issues are smaller in size compared to UTI AMC.

The Rs 4.4 billion IPO of Mazagon Dock Shipbuilders was subscribed 5.8 times, so far, as it received bids for 177.5 million equity shares against an offer size of 30.5 million shares.

Retail investors have been in the leading position for bids as their reserved portion has been subscribed 12.35 times and that of non-institutional investors (NII) 3.26 times.

Mazagon Dock IPO was supposed to launch in September 2019, but the plan was shelved due to low demand.

To know more about the company, you can read our note on the IPO here: Mazagon Dock Shipbuilders IPO: Should You Apply? (requires subscription).

How the above IPOs sail through remains to be seen. 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.


Indian Indices Trade on a Volatile Note; Tata Steel & ONGC Top Losers
12:30 pm

Share markets in India are fluctuating between gains and losses in today's volatile session, tracking a mixed trend in global equities as the US began its presidential debate.

The BSE Sensex is trading down by 37 points, down 0.1%, at 37,950 levels.

Meanwhile, the NSE Nifty is trading down by 14 points.

HUL is among the top gainers today. Tata Steel and ONGC are among the top losers today.

The BSE Mid Cap index is trading up by 0.1%.

The BSE Small Cap index is trading down by 0.2%.

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On the sectoral front, stocks in the metal sector and oil & gas sector are witnessing selling pressure.

FMCG stocks, on the other hand, are trading in green.

US stock futures are trading lower today. Nasdaq Futures are trading down by 123 points (down 1.1%), while Dow Futures are trading down by 293 points (down 1%).

The rupee is trading at 73.78 against the US$.

Gold prices are trading down by 0.8% at Rs 50,282 per 10 grams.

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

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Speaking of stock markets, in our latest episode of Investor Hour Podcast, India's #1 trader Vijay Bhambwani joins Rahul Goel to talk about his views on stock market, currencies, his trading strategy, and more...

In the podcast, Vijay talks about the volatility in the benchmark indices. Instead of trading for short-term profits of 5-10%, he thinks it's a far better idea to wait for the big profit trades. These are longer-term trades which can pay out anywhere between 50-80%.

Tune in here:

In news from the finance sector, Indiabulls Housing Finance is among the top buzzing stocks today.

The company on Tuesday said it has further sold a portion of its stake in OakNorth Holding to TEMF, a fund managed by Toscafund Asset Management for around Rs 6.3 billion.

OakNorth Holding is the parent company of the UK bank OakNorth Bank. OakNorth Bank was launched in September 2015 and Indiabulls had invested Rs 6.6 billion in November 2015 for a 40% stake in the bank.

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In November 2017, the company recouped its investment by selling about 10% stake to the Government of Singapore's investment arm GIC for Rs 7.7 billion.

The housing finance company said sale proceeds will be accretive to the regulatory net worth and the capital adequacy ratio of the company.

With this stake sale, the company has raised a total of Rs 18.3 billion as fresh equity in September. It raised Rs 6.8 billion through qualified institutional placement (QIP) and Rs 11.5 billion through sale of stake in OakNorth.

Indiabulls Housing Finance share price is presently trading up by 1.2%.

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

Even as the Sensex 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 one of the editions 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.

Richa recently recommended one such stock - a high quality NBFC. Subscribers can read the report here (requires subscription).

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

Moving on to news from the IPO space, as per a leading financial daily, Canadian investment giant Brookfield Asset Management has filed a draft offer document with markets regulator to monetise it's Indian rental assets via a REIT IPO.

This is the third REIT offering in India after the Embassy Office Parks REIT backed by Blackstone and the Mindspace REIT also backed by Blackstone and developer K Raheja Corp.

Reportedly, the IPO will be launched by 2020 end or early 2021. It will be a combination of fresh issue and offer for sale.

In other news, the initial public offering of ship builder Mazagon Dock Shipbuilders saw a strong demand from retail investors, with the issue getting oversubscribed on the first day itself.

The issue received bids for 63.9 million shares on Tuesday, 29 September 2020, as against 30.5 million shares on offer, as per the National Stock Exchange of India (NSE) website data.

The issue will close on October 1, 2020.

The company will raise nearly Rs 4.4 billion via public issue and all the money will go to the government as it is a part of government's divestment programme.

Mazagon Dock Shipbuilders is a defence public sector undertaking (PSU) shipyard under the department of defence production, Ministry of Defence (MoD) with a maximum shipbuilding and submarine capacity of 40,000 dead weight tonnage (DWT).

It is the only public sector defence shipyard to build destroyers and conventional submarines for the Indian Navy.

The company has a strong order book worth Rs 541 billion, which is to be executed in the next six to seven years. Furthermore, the company also expects the Indian government's 'Atmanirbhar Bharat' plan to positively impact private and public shipyards in coming years as domestic manufacturing picks up.

Mazagon Dock IPO was supposed to launch in September 2019, but the plan was shelved due to low demand.

To know more about the company, you can read our note on the IPO here: Mazagon Dock Shipbuilders IPO: Should You Apply? (requires subscription).

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


Sensex Opens Flat; Banking and Metal Stocks Under Pressure
09:30 am

Asian stock markets are trading on a mixed note ahead of the first US presidential debate, as financial markets looked to take a measure of both candidates.

The Nikkei is down 0.2%, while the Hang Seng is up 1.3%.

In the Wall Street, major indices slipped overnight as investors awaited to take a measure of Democrat Joe Biden and US President Donald Trump in the first US presidential debate. The Dow and S&P 500 fell 0.5% and the Nasdaq Composite dropped 0.3%.

Back home, Indian share markets have opened the day on a flat note.

The BSE Sensex is trading down by 33 points.

The NSE Nifty is trading lower by 9 points.

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ONGC and Sun Pharma are among the top gainers today. IndusInd Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.4%.

The BSE Small Cap index is trading higher by 0.3%.

Sectoral indices are trading mixed with stocks in the healthcare sector witnessing maximum buying interest.

Banking stocks, on the other hand, are trading in red.

The rupee is trading at 73.77 against the US$.

Gold prices are trading down by 0.1% at Rs 50,681 per 10 grams.

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Speaking of stock markets, in our latest episode of Investor Hour Podcast, India's #1 trader Vijay Bhambwani joins Rahul Goel to talk about his views on stock market, currencies, his trading strategy, and more...

In the podcast, Vijay talks about the volatility in the benchmark indices. Instead of trading for short-term profits of 5-10%, he thinks it's a far better idea to wait for the big profit trades. These are longer-term trades which can pay out anywhere between 50-80%.

Tune in here:

In news from the metal sector, India Ratings and Research (Ind-Ra) has maintained a negative outlook on the steel sector and expects an operational recovery to pre-Covid-19 levels in second half of FY22, though large players could recover earlier.

The rating agency said that while domestic demand did show initial signs of recovery in mid-Q2FY21 with the unleashing of pent-up demand, its sustenance would depend on a macroeconomic pick-up from timely government reforms and stimulus to push up domestic consumption and investment activity.

It added that government's increased investments in infrastructure, especially frontloading of the Rs 100 trillion infrastructure investment plan could be a key steel demand growth driver.

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The rating agency believes that iron ore prices could increase further with only five out of the 19 Odisha iron ore mines, which were auctioned in March 2020, being operational as on date.

In other news, the dividend payout of Rs 45 billion that Vedanta received from Hindustan Zinc in May is yet to be passed on to the company's shareholders.

Corporate governance experts said by holding back the dividend to shareholders despite having a dividend distribution policy could indirectly lead to a reduction in the company's delisting price.

Vedanta's delisting process will open on October 5.

The company's dividend distribution policy says normal dividend received from Hindustan Zinc shall be passed on to its shareholders in entirety.

Vedanta in its annual report has cited the need for financial flexibility at the group as the reason for holding back the dividend.

Vedanta owns almost 65% stake in Hindustan Zinc.

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

Speaking of the metal sector, note that metal stocks have rebounded sharply from their March lows, with revival in both domestic and global demand.

Have a look at the chart below which shows returns of the major sectoral indices since 23 March 2020.

As per Apurva Sheth, the secret behind the rally in metals is nothing else but its greed and fear cycle. The greed phase in metal stocks will last till September 2021.

As per Apurva, the sector has a lot more ground to cover up in a short span of time.

He has been sharing with you such greed and fear cycles in stocks, currencies, and even commodities.

How metal stocks perform in the coming months remains to be seen.

Moving on to stock specific news...

Va Tech Wabag is among the top buzzing stocks today.

Rekha Rakesh Jhunjhunwala, wife of ace investor Rakesh Jhunjhunwala, is going to invest Rs 800 million in VA Tech Wabag, the Indian multinational player in the water treatment industry.

The company has decided to raise Rs 1.2 billion via preferential issue, and on September 29, finalised the allotment of equity shares on a preferential basis.

The company's board approved the allotment of 5 million shares to Rekha Rakesh Jhunjhunwala, 1.5 million shares to Basera Home Finance, and 1 million shares to Sushma Anand Jain and Anand Jaikumar Jain.

With this, Jhunjhunwala will become the major individual shareholder in the company.

Va Tech Wabag share price has opened the day up by 5%.

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


SGX Nifty Up 51 Points, Mazagon Dock Shipbuilders IPO, New Mutual Fund Folios in August, and Top Buzzing Stocks Today
Pre-Open

Indian share markets ended on a flat note yesterday.

At the closing bell yesterday, the BSE Sensex stood lower by 8 points.

The NSE Nifty closed lower by 5 points.

Hindalco and UltraTech Cement were among the top gainers.

The BSE Mid Cap index ended down by 0.2%.

The BSE Small Cap index stood flat.

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

Metal stocks, on the other hand, witnessed buying.

At 8 am today, the SGX Nifty was trading up by 51 points, or 0.5% higher at 11,290 levels. Indian share markets are headed for a positive opening today following the positive trend on SGX Nifty.

Gold prices were trading up by 0.5% at Rs 50,400 per 10 grams at the time of closing stock market hours yesterday.

Gold prices edged higher and erased some losses as the dollar retreated from a two-month peak ahead of the US presidential debates and progress on the US stimulus bill.

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

{inlineads2}

Speaking of stock markets, in our latest episode of Investor Hour Podcast, India's #1 trader Vijay Bhambwani joins Rahul Goel to talk about his views on stock market, currencies, his trading strategy, and more...

In the podcast, Vijay talks about the volatility in the benchmark indices. Instead of trading for short-term profits of 5-10%, he thinks it's a far better idea to wait for the big profit trades. These are longer-term trades which can pay out anywhere between 50-80%.

Tune in here:

Top Stocks in Focus Today

BPCL will be among the top buzzing stocks today.

This comes as the management of Bharat Petroleum Corporation (BPCL) said that 2% of its treasury stock will be transferred to a separate trust, while the remaining 7.33% is likely to be sold in a bulk deal. The company also said that the disinvestment process was fully on track and some formalities are taking time.

NTPC share price will also be in focus today as the company has sought bids for procuring biomass pellets to fuel its thermal power plants in an effort to cut down air pollution from burning of crop residue.

The state-owned power producer aims to use 5 million tonnes of pellets, made from crop waste, to fuel 17 of its power plants in the current year.

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Market participants will also track stocks from the defence sector today as Defence Minister Rajnath Singh on Monday unveiled the new Defence Acquisition Procedure of 2020 (DAP 2020), which will govern the procurement of defence equipment from the capital budget. It will supersede the Defence Procurement Procedure of 2016 from October 1.

Earlier this month, the government permitted foreign direct investment (FDI) of up to 74% under automatic route in the defence sector with a view to attracting overseas investors.

Shares of defence-related companies were in focus yesterday on the back of above development with state-owned companies Bharat Dynamics and Hindustan Aeronautics (HAL) rising as much as 4% on the BSE.

Mazagon Dock Shipbuilders IPO Opens for Subscription

Moving on to news from the IPO space...

State-owned defence company Mazagon Dock Shipbuilders hit the initial public offering market yesterday. The issue will close on October 1, 2020.

The price band of the IPO has been fixed at Rs 135-145 per share for the issue which consists of an offer for sale (OFS) of 30.5 million equity shares by the Government of India.

The company will raise nearly Rs 4.4 billion via public issue and all the money will go to the government as it is a part of government's divestment programme.

Mazagon Dock Shipbuilders is a defence public sector undertaking (PSU) shipyard under the department of defence production, Ministry of Defence (MoD) with a maximum shipbuilding and submarine capacity of 40,000 dead weight tonnage (DWT). The company is engaged in the construction and repair of warships and submarines for the MoD and is used by the Indian Navy and commercial clients.

It is the only public sector defence shipyard to build destroyers and conventional submarines for the Indian Navy.

The company has a strong order book worth Rs 541 billion, which is to be executed in the next six to seven years. Furthermore, the company also expects the Indian government's 'Atmanirbhar Bharat' plan to positively impact private and public shipyards in coming years as domestic manufacturing picks up.

To know more about the company, you can read our note on the IPO here: Mazagon Dock Shipbuilders IPO: Should You Apply? (requires subscription).

How the above IPO sails through remains to be seen. We will keep you updated on the latest developments from this space. Stay tuned.

Mutual Fund Industry Adds 4.5 Lakh Investor Accounts in August

The mutual fund industry added 4.5 lakh investor accounts in August, taking the total tally to 92.5 million, primarily on account of contribution from debt schemes.

Of the new folios last month, more than 2 lakh were added in debt funds.

Debt schemes folios count went up by 2.34 lakh to 71.2 lakh. Barring overnight, long duration, credit risk and gilt funds, all categories in debt funds witnessed growth in folios.

Overall, investors pulled out over Rs 145 billion from various mutual fund schemes last month. Debt-oriented schemes witnessed a net outflow of Rs 39.1 billion in August, after recording net inflows for four months in a row.

The outflow was largely on the back of a significant pullout from overnight and liquid fund categories. The equity mutual funds saw an outflow for the second consecutive month to Rs 40 billion in August, primarily on profit-booking by investors.

Speaking of mutual funds, note that earlier this month, the markets regulator mandated multicap funds to allocate at least 25% of their assets in midcaps, as well as smallcaps by February next year.

The regulator later clarified that funds cannot only rebalance the portfolio in their multi-cap schemes but also facilitate the switch to other schemes and merge such schemes with large-cap schemes or convert them to another scheme category, such as large and mid-cap.

Assuming every fund rebalances, the 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 her, this could be a once in a decade opportunity to get rich from select smallcaps.

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