5 Reasons Why Sensex Crashed 1,066 Points Today
Closing

Indian share markets witnessed a sharp sell-off today and ended their session deep in the red.

Benchmark indices took a breather today after rallying for 10 consecutive sessions in a row, the biggest rally in 13 years, largely led by losses in IT and banking stocks.

At the closing bell, the BSE Sensex stood lower by 1,066 points (down 2.6%).

The NSE Nifty closed lower by 290 points (down 2.4%).

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Bajaj Finance and Tech Mahindra were among the top losers today.

The SGX Nifty was trading at 11,695, down by 267 points, at the time of writing.

The BSE Mid Cap index ended down by 1.8%. The BSE Small Cap index ended down by 1.5%.

On the sectoral front, stocks from the banking sector, telecom sector, and IT sector bled the most.

Asian stock markets too ended on a negative note, with the Hang Seng and the Nikkei ending down by 2.06% and 0.5%, respectively. The Shanghai Composite ended lower by 0.26%.

The rupee is trading at 73.42 against the US$.

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Here are Top 5 Factors Why Indian Stock Markets Crashed Today

US Stimulus Hopes Fade: US markets ended lower overnight as investors lost hope that a US fiscal stimulus would be approved before the presidential election in November. US Treasury Secretary Steve Mnuchin said he and House of Representatives Speaker Nancy Pelosi were far apart on another coronavirus economic relief package, and that a deal would be hard to reach before the November 3 elections.

Weak Global Cues: Indian share markets opened amid muted global cues with weaker Asian markets and stocks in Europe falling for the third consecutive session in early trading.

US-China Trade Tensions: Trade tensions between Beijing and Washington continue after the US State Department submitted a proposal for the Trump administration to add China's Ant Group to a trade blacklist before the financial technology arm of e-commerce giant Alibaba is slated to go public.

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Banking and IT Stocks Bleed: IT and banking stocks witnessed most of the selling pressure today. Major brunt was seen as these sectors were outperformers of the rally seen in the last few trading sessions.

The IT sector ended 2.7% lower today, after the rally that was seen this month on the back of strong quarterly results and buybacks.

New Global Lockdown Measures: As per a Reuters report, governments across Europe tightened restrictions to control second wave of COVID-19 infections. France imposed curfews while other European nations are closing schools, canceling surgeries and enlisting student medics as overwhelmed authorities face the nightmare scenario of a coronavirus resurgence at the onset of winter. The news dampened the prospects for economic recovery and weighed on stock markets.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Speaking of the current stock market scenario, note that the markets climbed back to their highest levels since the pandemic began.

The Sensex breached the 40,000-mark earlier this month. Meanwhile, the Nifty went past the 12,000-mark earlier this week on Monday.

The smallcap index is up more than 60% since 23 March.

As per Richa Agarwal, lead smallcap analyst at Equitymaster, there could still be a lot of steam left to this smallcap rebound rally.

Have a look at the history of previous smallcap crashes and rebounds over the last two decades...

Every big fall in the smallcap index was followed by a sharp up move, a minimum gain 200%. Twice the rebounds were just shy of touching 300%.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

From the commodity space, gold prices are trading down by 0.3% at Rs 50,380 per 10 grams.

Note that gold prices have moved up by more than 25% over the last one year. The yellow metal is considered a hedge against inflation and a weakening dollar. With the flood of money by governments and central banks expected to stoke inflation, investors are buying gold.

Also, ahead of the festive season, the Indian government has come up with another tranche of sovereign gold bonds that opened for subscription on Monday. The RBI on behalf of the government will issue gold bonds at Rs 5,051 per gram of gold.

The scheme will be open for subscription till to October 16.

To know how gold prices will perform ahead, tune in to the video below, where India's #1 trader Vijay Bhambwani tells you why the bull market for gold and silver still has a long way to go...

Moving on to stock specific news...

Infosys was among the top buzzing stocks today.

Buying interest was seen as it was reported that Infosys will roll out salary increases and promotions across all levels effective January 1 as the company forecast higher growth in the year ahead on the back of large deal wins from customers.

Infosys CEO Salil Parekh said that the company will pay a special bonus in the quarter to December, while paying 100% variable pay in the previous quarter.

The company added that the demand for its services is increasing as clients spend more on technology.

The IT major hired 5,500 people including 3,000 freshers in the second quarter. It plans to hire 16,500 freshers this year and has a target to hire 15,000 people next year

On the results front, India's second largest software services provider reported a 14.4% sequential growth in consolidated profit at Rs 48.5 billion for the September quarter (Q2FY21), and revised its full year revenue as well as margin guidance given the highest ever deal wins in Q2.

On a year-on-year (YoY) basis, Infosys reported 20.5% increase in its net profit.

Revenue from operations increased to Rs 245.7 billion in Q2FY21, up by 3.8% QoQ, while dollar revenue grew by 6.1% sequentially to US$ 3,312 million.

Operating profit stood at Rs 62.3 billion, a growth of 16.1%.

The company revised its revenue growth guidance upward to 2-3% in constant currency for financial year 2020-21, from 0-2% earlier.

The full year operating margin guidance was also revised upward to 23-24%, against 21-23% earlier.

The company also declared an interim dividend of Rs 12 per equity share.

To know more, you can read Infosys' Q2FY21 result analysis on our website.

In news from the IPO space, Equitas Small Finance Bank, the subsidiary of Equitas Holdings, has fixed the price band at Rs 32 to 33 per shares for its forthcoming initial public offering (IPO).

The IPO will open for subscription on October 20 and close on October 22.

The IPO consists a fresh issue of Rs 2.8 billion and an offer for sale of 72 million equity shares by Equitas Holdings, valued at Rs 2.4 billion at upper price band, taking the total issue size at Rs 5.2 billion.

The offer includes reservation of Rs 510 million worth of shares for eligible shareholders of Equitas Holdings and Rs 10 million shares for eligible employees of Equitas Small Finance Bank.

How this IPO sails through remains to be seen. Meanwhile, we will keep you updated on all the 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 Trades 310 Points Lower; Dow Futures Down by 115 Points
12:30 pm

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

The BSE Sensex is trading down by 310 points, down 0.8%, at 40,484 levels.

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

Asian Paints and Axis Bank are among the top gainers today. HCL Technologies and Tech Mahindra are among the top losers today.

Both the BSE Mid Cap and BSE Small Cap index are trading flat.

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On the sectoral front, stocks from the IT sector, are witnessing most of the selling pressure.

On the other hand, stocks from the auto sector are witnessing most of the buying interest.

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

Nasdaq Futures are trading down by 87 points (down 0.7%), while Dow Futures are trading down 115 points (down 0.4%).

Gold prices are trading down by 0.3% at Rs 50,389 per 10 grams.

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

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Speaking of the stock markets, India's #1 trader Vijay Bhambwani talks about a once-in-a-generation change that is happening in the market caused by the pandemic in one of his latest videos.

In the video, Vijay talks about how a new generation of Robinhood traders are driving this change. Coronavirus has changed the way we work, travel, and communicate but will it change the way we trade the markets?

To find out, tune in here:

In news from the IPO space, oil and gas pipeline infrastructure service provider Likhitha Infrastructure made its debut on the stock market today at Rs 130, an 8% premium.

Likhitha Infrastructure, which had the smallest initial public offering of Rs 610 million, will be the 11th company to get listed this year.

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Given the tepid response from institutional investors initially, analysts had expected a muted listing. But after the company's initial public offer (IPO) was extended till Wednesday, the IPO attracted over 9.5 times bids. The issue received bids for 48.5 million shares, which was 9.5 times the issue size of 5.1 million shares. The final issue price was fixed at Rs 120 per share.

Until October 8, the IPO had failed to attract qualified institutional buyers (QIB) to bid for even half their portion. In the revised offer, the portion received for QIBs was reduced from 50% of the issue to just 1% of the issue with only 51,000 shares on offer. With the reduced size of the QIB portion, the quota of non-institutional investors (NII) was revised upwards. NIIs now have 64% of the total issue reserved for them and subscribed their portion of over 3.2 million units 1.4 times.

Note that Likhitha Infrastructure, with a market capitalization of Rs 2.37 billion, has over two decades of experience in laying pipeline networks as well as providing operations and maintenance services to leading city gas distribution companies in India. The company is also debt free and has a healthy order book, which gives it strong revenue visibility going forward.

It plans to use the net issue proceeds for working capital requirements and general corporate purposes.

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

Moving on to stock specific news...

Among the buzzing stocks today is Tata Elxsi Ltd.

Design and technology services provider Tata Elxsi on Wednesday reported a 58.3% increase in net profit to Rs 788 million for the September 2020 quarter.

The company reported a sharp growth in top line and bottom line on a year-on-year (YoY) basis.

Sales revenues for the September 20 quarter were up 11.5% on a YoY basis and 7.4% on a sequential basis which showed the limited impact of the Covid-19 effect. Net profits were up by 58.4% on a YoY basis on the back of better than expected operating performance. Even on a sequential basis, the net profits were up by 14.5%.

In a regulatory filing, the company said it had registered a net profit of Rs 498 million in the year ago period. Its revenue from operations rose 11.5% to Rs 4.3 billion for the said quarter from Rs 3.86 billion in the corresponding period a year ago.

The company said that its growth was driven by both its key businesses - Embedded Product Design (EPD), and Industrial Design and Visualization (IDV). EPD, the company's largest division, grew by 7.1% quarter-on-quarter (QoQ) and 15.1% YoY, it added.

Within EPD, healthcare grew at 14.1% QoQ, while media and communications grew 6.7% and transportation 5.6% on a sequential basis. IDV also posted growth of 15.1% QoQ with some key international design project wins.

The company is going into the second half of FY21 with a strong deal pipeline across geographies and verticals, and a significant number of large deals that it is pursuing. It has closed some large deals including a multi-year deal with a European Tier 1 supplier for vehicle electronics and software. It has also added new automotive customers including a new OEM.

The sharp spike in the earnings per share on a YoY basis gives a greater valuation comfort to investors who had been worried about the rich valuations of the stock after the recent rally.

At the time of writing, Tata Elxsi share price was trading up by 1.3% on the NSE.

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

Speaking of stocks, here's a pattern that if you see, you must sell your position. After all, exits are more important than entries.

In the chart below, we can see the head and shoulder pattern - the stock goes up, makes a high, falls a little bit, goes up to a higher high, does not make a higher low, rallies again, fails to make a new high, and then starts to break down.

This usually happens in a situation where a stock or index has typically been in a bull trend for a while.

According to Apurva Sheth, senior Research Analyst at Equitymaster, spotting this pattern correctly can help you save money.

If you're interested in trading and want to know how you can use this pattern, you can read about it in one of the recent editions of Profit Hunter here: It's When You Sell that Counts

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


Sensex Opens Flat; Infosys Jumps 4% Post Q2 Results
09:30 am

Asian stock markets are trading on a negative note today. The Hang Seng is trading down by 1.1% and the Nikkei is trading down by 0.5%.

On Wall Street, the Dow fell 0.6% and the Nasdaq dropped 0.8% as hopes of US fiscal stimulus before the presidential election faded.

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

The BSE Sensex is trading down by 84 points. The NSE Nifty is trading lower by 23 points.

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Infosys and Tata Steel 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 up by 0.2%. The BSE Small Cap index opened up by 0.3%.

Sectoral indices are trading mixed with stocks in the banking sector witnessing selling pressure. IT stocks, on the other hand, are trading in green.

The rupee is trading at 73.32 against the US$.

Gold prices are trading down by 0.3% at Rs 50,406 per 10 grams.

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Speaking of the current stock market scenario, in his latest video, Co-head of research at Equitymaster, Rahul Shah explains why he asked his subscribers to move into cash.

Tune in to find out more:

In news from the power sector, Power Finance Corporation (PFC) and REC have disbursed around Rs 235 billion to state power distribution companies (discoms) as a part of their first tranche payment under the liquidity infusion scheme announced by the government in May.

PFC and REC had sanctioned Rs 450 billion under the first of the scheme, from which Uttar Pradesh has received the highest disbursal of around Rs 105 billion followed by Telangana and Andhra Pradesh.

A senior REC official said that the one-time approval granted by the union cabinet to discoms to borrow above the 25% revenue limit on working capital loans will increase the overall size of the scheme to over Rs 1,000 billion, as many states such as Tamil Nadu and Bihar would become eligible under the scheme.

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In other news, NTPC share price is in focus today.

Yesterday, shares of the company slipped 5% intraday after more than three-million equity shares changed hands through multiple block deals.

The stock of the state-owned electric utility company ended close to its 52-week low of Rs 74.

Earlier this week, NTPC had announced that the company has decided to raise Rs 40 billion on October 15, 2020, through private placement of unsecured non-convertible bonds in the debentures at a coupon of 5.45% p.a. with a door to door maturity of 5 years on October 15, 2025.

The proceeds will be utilized for, inter alia, funding of capital expenditure, refinancing of existing loans and other general corporate purposes.

The bonds are proposed to be listed on both NSE and BSE.

Earlier this week, reports also stated that NTPC has started to collaborate with cement manufacturers across the country to supply fly ash to achieve 100% utilization of the by-product produced during power generation.

NTPC share price has opened the day up by 0.7%.

Speaking of the power sector, it is interesting to note that the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below:

This is abysmally low by global standards. This shows that there is big upside in the market share of power exchanges in India.

As per Tanushree Banerjee, co-head of Research at Equitymaster, India's power sector is currently in transition. It is driven by increasing reliance on short-term contracts and electricity spot markets. This transition to the short-term market is happening due to quickly evolving industry dynamics.

Tanushree believes the Indian power sector will see a surge in spot power volumes due to certain factors.

Tanushree recently recommended a high quality stock from this space. Subscribers can read the report here (requires subscription).

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

Moving on to news from the IT sector, Infosys is among the top buzzing stocks today.

India's second largest software services provider reported a 14.4% sequential growth in consolidated profit at Rs 48.5 billion for the September quarter (Q2FY21), and revised its full year revenue as well as margin guidance given the highest ever deal wins in Q2.

On a year-on-year (YoY) basis, Infosys reported 20.5% increase in its net profit.

Revenue from operations increased to Rs 245.7 billion in Q2FY21, up by 3.8% QoQ, while dollar revenue grew by 6.1% sequentially to US$ 3,312 million.

Operating profit stood at Rs 62.3 billion, a growth of 16.1%.

The company revised its revenue growth guidance upward to 2-3% in constant currency for financial year 2020-21, from 0-2% earlier.

The full year operating margin guidance was also revised upward to 23-24%, against 21-23% earlier.

The company also declared an interim dividend of Rs 12 per equity share.

Infosys share price has opened the day up by 2.8%.

To know more, you can read Infosys' Q2FY21 result analysis on our website.

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


SGX Nifty Up 17 Points, RBI on Restructuring of Loans, Wipro Buyback Offer and Q2 Results, and Top Buzzing Stocks Today
Pre-Open

Indian share markets witnessed buying interest during the last hour of trading yesterday and ended near day's high.

Benchmark indices edged lower in early trade yesterday amid weakness in global equities. However, losses were erased in the last hour of trading as banking and finance stocks witnessed buying.

At the closing bell yesterday, the BSE Sensex stood higher by 169 points (up 0.4%).

The NSE Nifty closed higher by 37 points (up 0.3%).

Bajaj Finance and Bajaj Finserv were among the top gainers.

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

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On the sectoral front, gains were largely seen in the banking sector and finance sector.

Power stocks, on the other hand, witnessed selling pressure.

At 8 am today, the SGX Nifty was trading up by 17 points, or 0.1% higher at 11,990 levels. Indian share markets are headed for a positive opening today following the positive trend on SGX Nifty.

Gold prices were trading up by 0.2% at Rs 50,345 per 10 grams at the time of closing stock market hours yesterday.

Note that gold prices have moved up by around 28% over the last one year. The yellow metal is considered a hedge against inflation and a weakening dollar. With the flood of money by governments and central banks expected to stoke inflation, investors are buying gold.

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Also, ahead of the festive season, the Indian government has come up with another tranche of sovereign gold bonds that opened for subscription on Monday. The RBI on behalf of the government will issue gold bonds at Rs 5,051 per gram of gold.

The scheme will be open for subscription till to October 16.

To know how gold prices will perform ahead, tune in to the video below, where India's #1 trader Vijay Bhambwani tells you why the bull market for gold and silver still has a long way to go...

Also, speaking of the current stock market scenario, since 23 March this year, the smallcap index is up with 68% gains versus 56% gains in the Sensex.

The markets are back at the highest levels since the pandemic began.

As per Richa Agarwal, lead smallcap analyst at Equitymaster, there could still be a lot of steam left to this smallcap rebound rally.

As per Richa, if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself

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Top Stocks in Focus Today

Tata Steel Long Products will be among the top buzzing stocks today. Shares of the company were locked in the 20% upper circuit band at Rs 403 on the BSE yesterday after the company reported a consolidated net profit of Rs 590.6 million in July-September quarter (Q2FY21).

Tata Steel Long Products reported 52% year-on-year (YoY) growth in revenue from operations at Rs 11.9 billion in Q2FY21 as against Rs 6.5 billion in the corresponding quarter of the previous fiscal.

SBI Cards and Payment Services share price will also be in focus today as the company said it has kick-started festive season offers in line with the changing shopping trends and customers will be offered discounts as well as cashback across a host of brands.

The State Bank of India (SBI)-promoted company's stock was trading at the highest level yesterday since its listing on March 16, 2020.

Wipro Posts 3.4% YoY Fall in Q2FY21 Profits; Buyback Plan at Rs 400 Per Share

Wipro posted a 3.4% year-on-year (YoY) fall in consolidated net profit at Rs 24.7 billion for the quarter ended September 30. It had reported a net profit of Rs 25.5 billion in the corresponding quarter last year.

Consolidated revenue remained nearly unchanged at Rs 151.2 billion.

IT services operating margin was 19.2% as against 18.1% a year ago. The Bengaluru-based company added 97 new customers during the quarter.

Wipro's board also approved up to Rs 95 billion buyback plan at Rs 400 per share.

The IT firm will repurchase 237.5 million shares at Rs 400 per share. The buyback size stands at 4.16% of the total paid-up equity share capital.

Promoter Azim Premji, who through individual shareholding entities controls about 74% of the company, intends to participate in the buyback.

Note that this is Wipro's fourth buyback in the last five years. Wipro did its largest share buyback ever last year.

In another update, the company announced that it has signed a definitive agreement to acquire Eximius Design, a leading engineering services company with strong expertise in semiconductor, software and systems design.

RBI Clarifies Restructuring of Loans: Accounts Without Defaults as of March 1 Eligible

In other news from the finance and banking sector, the Reserve Bank of India (RBI) yesterday clarified that loans which have remained standard without any defaults as of March 1, 2020, will be eligible for restructuring under the pandemic-related resolution framework issued in August.

On whether loans of Rs 1 billion and above will require an independent credit evaluation by any one credit rating agency, the RBI said, in case credit opinion is obtained from more than one rating agency, all such credit opinions must be RP4 rating or above.

The clarification also said the new definition of micro, small and medium enterprises (MSMEs) effective June 26, will not impact their eligibility for resolution but will be based on the definition that existed as of March 1, 2020.

On loans to the realty sector, RBI said the requirement of inter-creditor agreement is a basic feature of the prudential framework for resolution issued on June 7, 2019, and consequently that of the pandemic resolution framework as well.

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.