Sensex Ends 127 Points Higher; Auto Stocks Witness Huge Buying
Closing

Share markets in India continued to trade on a positive note during closing hours today and ended their session marginally higher.

Benchmark indices edged higher after a one-day pause seen yesterday. Most of the gains were supported by finance and auto stocks.

At the closing bell, the BSE Sensex stood higher by 127 points (up 0.3%).

The NSE Nifty closed higher by 33 points (up 0.3%).

Maruti Suzuki and Mahindra & Mahindra were among the top gainers today.

The SGX Nifty was trading at 11,935, up by 43 points, at the time of writing.

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The BSE Mid Cap index ended up by 0.6%. The BSE Small Cap index ended up by 0.7%.

On the sectoral front, gains were largely seen in the auto sector and consumer durables sector.

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

Asian stock markets ended on a mixed note. As of the most recent closing prices, the Hang Seng ended up by 0.6% and the Shanghai Composite ended down by 1%. The Nikkei gained 0.2%.

The rupee was trading at 73.65 against the US$.

Gold prices are trading up by 0.2% at Rs 50,888 per 10 grams.

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Gains were seen as expectations that a US stimulus package would eventually be passed offset pressure from a stronger dollar.

Note that gold and silver plunged yesterday as the dollar recovered from its seven-week low and talks between the White House and rival Democrat lawmakers continued for a COVID-19 financial relief plan before the US election.

Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

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 one of his videos, he tells you why. Tune in to the video to find out more.

Moving on to stock specific news...

Biocon was among the top buzzing stocks today.

The biotechnology major today reported a 23% fall in its consolidated net profit to Rs 1.9 billion for the second quarter ended September 30, mainly on account of higher expenses.

Its consolidated total income stood at Rs 17.6 billion for the quarter under consideration, as against Rs 16.1 billion for the same period a year ago.

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The R&D expense of the company for the quarter ended September 30, 2020, was at Rs 1.5 billion as against Rs 1 billion in the same period of the previous fiscal.

The company's management said profitability was impacted on account of higher R&D expenses, staff costs, other expenses and forex losses. However, the company's core EBITDA margins stood at a healthy 32%, indicating sound operational performance.

It added that as a part of the company's commitment to address the novel coronavirus pandemic in India, the Biocon Group is working on a comprehensive portfolio of products for treating mild to severely ill COVID-19 patients.

Biocon share price ended the day down by 2.7% on the BSE.

In other news, State Bank of India's credit card arm SBI Cards and Payment Services said its gross non-performing assets (NPAs) rose to 4.3% as on September 30 compared to 2.3% a year ago.

The company added that this figure would have been 7.5% had there not been a Supreme Court order that restrained declaring some Covid-related defaults as bad loans.

One reason for the NPA spike in this quarter is that default numbers for the first quarter were suppressed due to the standstill on repayments allowed by the Reserve Bank of India (RBI). Defaults rose in the second quarter as the moratorium ended and customers began experiencing stress on repayments.

The bad loan numbers could go higher as currently there is a Supreme Court order stating that any account, which was not classified as NPA as of August 31, cannot be declared as an NPA until the next hearing or judgment as the case may be.

The above data is indicative of the distress in the self-employed segment of retail borrowers, where most defaults are seen.

As per a leading financial daily, around 84% of SBI Card's customers are salaried. Of this, 38% work in the public sector and 24% in large corporates. Yet, 9% of the company's receivables of Rs 240 billion are under the RBI's resolution plan, indicating that these borrowers are facing financial stress.

SBI Card shares witnessed selling pressure after the Q2FY21 results, which showed that the company's credit costs, i.e. the amount set aside for defaults, rose to 14.2% from 5.6% in the previous year.

The company posted a net profit of Rs 2 billion for the July-September quarter. This was down 46% year-on-year (YoY) from Rs 3.8 billion in the year-ago period.

The company has made additional provisions of Rs 7.6 billion since the pandemic. Card spends were expectedly down 10% at Rs 295.9 billion because of the lockdown, closure of malls and air-travel curbs.

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

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.

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


Sensex Trades 120 Points Higher; Dow Futures Down by 47 Points
12:30 pm

Share markets in India are presently trading marginally higher.

The BSE Sensex is trading up by 120 points, up 0.3%, at 40,678 levels.

Meanwhile, the NSE Nifty is trading up by 53 points.

Power Grid Corporation and Adani Ports & SEZ are among the top gainers today. UltraTech Cement and Shree Cement are among the top losers today.

Both the BSE Mid Cap index and the BSE Small Cap index are trading up by 0.7%

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On the sectoral front, stocks from the auto sector are witnessing most of the buying interest.

On the other hand, stocks from the FMCG sector are witnessing most of the selling pressure.

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

Nasdaq Futures are trading down by 20 points (down 0.2%), while Dow Futures are trading down 47 points (down 0.2%).

The rupee is trading at 73.6 against the US$.

Gold prices are trading flat at Rs 50,744 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 how there are better days ahead for the stock market in 2021 in his latest video for Fast Profits Daily.

In this video, Vijay shares that since commodity prices have recovered along with the stock market, they are now pointing towards an economic recovery. Aluminium is at its highest after May 2019 and copper on the MCX is at a multi-year high as well.

So, does it mean that the stock market will go up now?

Tune in here to find out more:

Moving on to stock specific news...

Among the buzzing stocks today is Ambuja Cement.

Cement maker Ambuja Cement reported a consolidated net profit of Rs 8 billion, a 50.5% year-on-year (YoY) increase for the quarter ended September, mainly on account of the company's cost reduction programs coupled with volume growth.

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The company registered 8% YoY volume growth and a 10% YoY growth in net sales at Rs 28 billion. Sales volume for the quarter was at 5.7 million tonnes, which was higher than the volume of 5.2 million tonnes for the same period last year.

Ambuja's total operating cost per ton declined by 8% YoY, on account of lower input costs and other efficiency programs adopted by the company. Operating earnings before interest, taxes, depreciation and amortization (EBITDA) increased to Rs 6.8 billion.

The company expects rural and agriculture sectors to lead the revival in economic activities. This, along with a continued focus on infrastructure development and affordable housing will support cement demand in the mid-term.

The company announced operationalizing its new plant at Marwar Mundwa, Rajasthan as part of its growth strategy to further improve Ambuja's market position in the North and West regions.

Further, the company declared an interim dividend of Rs 17 per share which shall be paid on and from 19 November 2020.

At the time of writing, Ambuja Cement share price was trading down by 1.5% on the BSE.

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

Moving on to news from the mutual funds space...

HDFC AMC Q2FY21 Results: Profit After Tax Falls 8%

HDFC AMC, the second largest asset management company in India, saw its profit after tax (PAT) fall 8% YoY to Rs 3.4 billion as compared to Rs 3.7 billion, for the quarter ended September.

The fund house revenue fell 8% quarter-on-quarter (QoQ) to Rs 4.6 billion from Rs 5 billion. Operating profit was Rs 3.5 billion, lower by 7% over the previous year's Rs 3.8 billion in the same period.

Operating margin for the quarter improved to 37 basis points compared to the previous quarter's 34 basis points of its Assets Under Management (AUM). However, it is still lower than the 41 basis points it clocked for the previous year, primarily due to lower earnings from equity schemes.

The poor performance of its equity-oriented schemes has led to the fund house to lose market share, with its share in overall assets under management falling 1.7% YoY.

In the more profitable equity mutual fund schemes, its market share has gone down from 15.8% to 13.6% in the same period, in liquid schemes its share is down from 22.1% to 18%. However, it has maintained its share of 13.6% in debt schemes.

Speaking of mutual funds, here's a chart that shows net inflows into equity funds during past few months:

As we can see, investors did well to pour more money into stocks (via mutual funds) in April 2020 and thus, take advantage of the sharp correction.

However, it goes all downhill after that. Inflows fell in both May as well as June this year when stocks were still on sale.

In fact, they fell by a whopping 97% in June 2020.

How this trend pans out in coming months remains to be seen.

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


Sensex Opens Higher; Telecom and Consumer Durable Stocks Lead
09:30 am

Asian stock markets are trading on a mixed note today after positive US economic data and signs of progress in stimulus talks in Washington lifted Wall Street benchmarks.

The Hang Seng is trading up by 0.6% and the Shanghai Composite is trading up by 0.1%.

In US, Wall Street indices closed higher as traders weighed House Speaker Nancy Pelosi's latest remarks on the US fiscal stimulus negotiations. Pelosi said a deal on new coronavirus aid was "just about there."

Investors also took cues from better-than-expected weekly jobless claims. New US weekly jobless claims totaled 787,000 last week, coming in below the median economist estimate of 870,000.

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The Dow Jones Industrial Average ended up by 0.5%, while the Nasdaq gained 0.2%.

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

Housing finance companies (HFCs) are in focus today as the RBI has asked HFCs to deploy at least 60% of their net assets in the business of providing finance for housing, and those who still don't have that ratio, must do so in a phased manner by March 31, 2024.

The BSE Sensex is trading up by 171 points. The NSE Nifty is trading higher by 57 points.

Tata Steel and Maruti Suzuki are among the top gainers today. Infosys, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.6%. The BSE Small Cap index opened up by 0.7%.

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

The rupee is trading at 73.66 against the US$.

Gold prices are trading up by 0.1% at Rs 50,823 per 10 grams.

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Speaking of the current stock market scenario, note that Indian share markets have 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 last week.

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...

As you can see, 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.

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In news from the automobile sector, Bajaj Auto is among the top buzzing stocks today.

Bajaj Auto on Thursday posted an 18.8% year-on-year (YoY) drop in net profit at Rs 11.4 billion for the quarter ended September 30.

The auto major had reported a profit of Rs 14 billion in the corresponding quarter last year.

Total revenue from operations declined 7.2% YoY to Rs 71.6 billion. Operating profit stood flat at Rs 12.3 billion.

The auto major sold 1,053,337 units in Q2FY21, down 10% YoY, against 1,173,591 units in Q2FY20.

On the other hand, the company witnessed 6% growth in two-wheeler sales at 5,50,195 units in the domestic market.

However, total two-wheelers sales and commercial vehicles sales including exports witnessed a fall of 2% and 53%, respectively.

Bajaj Auto share price has opened the day up by 0.2%.

To know more, you can read Bajaj Auto's Q2FY21 result analysis on our website.

Moving on to news from the pharma sector, Alembic Pharma's joint venture firm Aleor Dermaceuticals has received approval from the US Food & Drug Administration (USFDA) and other US health regulators under Abbreviated New Drug Application (ANDA) for Tavaborole Topical Solution.

The drug is used as an oxaborole antifungal indicated for the treatment of onychomycosis of the toenails due to Trichophyton rubrum or Trichophyton mentagrophytes.

In an official press release, the company informed that its approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), Topical Solution, 5%.

Alembic Pharma share price has opened the day up by 0.7%.

In other news, the DCGI has granted permission to pharma giant Dr Reddy's Laboratories for conducting Russian Sputnik V vaccine against Covid-19 in India on 100 volunteers.

News agency Sputnik quoted the organization as saying that the vaccine will be tested in the second phase of its clinical trials before moving on to phase 3.

Last week, the expert committee of DCGI had recommended granting permission to Dr Reddy's Laboratories for conducting phase 2 clinical trials of Russian COVID-19 vaccine candidate, Sputnik V, in India.

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

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


SGX Nifty Trades 12 Points Lower; Indicates Flat Opening for Indian Stock Markets
SGX Nifty

The SGX Nifty opened on a negative note today.

At 8 am, it was trading down by 12 points, or 0.1% lower at 11,890 levels.

Trends on SGX Nifty indicate a flat opening for Indian stock markets.

Asian stock markets are trading on a mixed note today after positive US economic data and signs of progress in stimulus talks in Washington lifted Wall Street benchmarks.

As of the most recent prices, the Hang Seng is trading up by 0.1% and the Shanghai Composite is trading up by 0.3%.

In US, Wall Street indices closed higher as traders weighed House Speaker Nancy Pelosi's latest remarks on the US fiscal stimulus negotiations. Pelosi said a deal on new coronavirus aid was "just about there."

Investors also took cues from better-than-expected weekly jobless claims. New US weekly jobless claims totaled 787,000 last week, coming in below the median economist estimate of 870,000.

The Dow Jones Industrial Average ended up by 0.5%, while the Nasdaq gained 0.2%. Earlier in the session, the Dow Jones fell as much as 170 points.

US stock futures are trading flat as President Donald Trump and former Vice President Biden make their final case to voters ahead of the elections.

After meeting last month in perhaps the most chaotic debate in modern history, President Donald Trump and his Democratic rival Joe Biden are now participating in their second and final presidential debate.

Back home, Aurobindo Pharma and TCS will be among the top buzzing stocks today.

Market participants will also track shares of Aarti Drugs and JSW Steel as these companies are slated to announce their financial results for the September quarter today.

To know the top cues in today's stock market session, check out the pre-open commentary here.

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


September Quarter Results, Equitas Small Finance Bank IPO, and Top Buzzing Stocks Today
Pre-Open

Indian share markets ended marginally lower yesterday.

Benchmark indices snapped their four-day winning streak led by losses in index heavyweights Reliance Industries, Infosys, HDFC Bank and ICICI Bank.

At the closing bell yesterday, the BSE Sensex stood lower by 149 points. Meanwhile, the NSE Nifty ended down by 41 points.

Hero MotoCorp was the top loser in NSE. Meanwhile, the top gainers in NSE included NTPC and Tata Motors.

The BSE Mid Cap index ended up by 0.5%. The BSE Small Cap index ended up by 0.9%.

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On the sectoral front, IT stocks and banking stocks witnessed selling pressure. Telecom stocks, on the other hand, witnessed buying interest.

At 8 am today, the SGX Nifty was trading down by 12 points, or 0.1% lower at 11,890 levels. Indian share markets are headed for a flat opening today following the trend on SGX Nifty.

Gold prices were trading down by 0.4% at Rs 51,106 per 10 grams at the time of closing stock market hours yesterday.

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Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

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 one of his videos, he tells you why. Tune in to the video to find out more.

Top Stocks in Focus Today

Aurobindo Pharma will be among the top buzzing stocks today as the company's arm received a warning letter from the US health regulator for its oral solid manufacturing facility situated at Dayton, New Jersey.

Aurobindo Pharma said that its existing business from this facility will not be impacted. The exclusive sales from this facility are around 2% of the group turnover. The company further added that it would engage with the regulator and it is fully committed in resolving this issue at the earliest.

Zee Entertainment Enterprises will be in focus today as the company has restructured its organization in line with its ZEE 4.0 strategy. Under the new plan, Punit Misra will take over as President - Content & International Markets.

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The company has formed an integrated content team, which will be responsible of creating and serving content to its viewers across linear and digital platforms. Earlier this year, the company announced an investment of Rs 5.2 billion, spread over 24 months, in its streaming connectivity company SugarBox.

Market participants will also track Tata Consultancy Services (TCS) share price as the company is in advanced talks to acquire a technology services unit of Deutsche Bank AG.

Reportedly, negotiations are ongoing and could still be delayed or fall apart. In 2008, TCS paid US$ 505 million to acquire Citigroup Inc.'s back-office unit in what was then its biggest acquisition.

Q2FY21 Results: UltraTech Posts Stellar Profit; Bajaj Finance Sees Drop

Cement maker UltraTech Cement reported a consolidated net profit of Rs 12.4 billion, a 113% year-on-year (YoY) increase for the quarter ended September.

This was largely due to an exceptional gain of Rs 3.6 billion on account of the sale of its Chinese subsidiary.

UltraTech Nathdwara Cement (UNCL) through its subsidiary, Krishna Holdings, a company incorporated in Singapore, divested its entire equity shareholding of 92.5% in the cement subsidiary at a net consideration of US$ 94.7 million.

While net sales of the company rose 8% YoY to Rs 103.5 billion, its earnings before interest, tax, depreciation and amortization (EBITDA) jumped 40% YoY to Rs 29.5 billion - the highest since the first quarter of FY20.

That was mostly led by lower energy and other costs (down 9% and 18% YoY, respectively), coupled with stable logistic expenses. The company's margin expanded to 26% from 19.9% a year ago.

The company said that its strong quarterly performance was on the back of operational efficiencies and its ability to serve all India markets. It also reported robust operating margins driven by both revenue growth and tight cost management.

Bajaj Finance reported a 36% drop in its consolidated net profit at Rs 9.7 billion for the second quarter of the 2020-21 fiscal year (Q2FY21).

The non-banking finance company (NBFC) had posted a net profit of Rs 15.1 billion in the same quarter a year ago.

The company's consolidated income grew 3% to Rs 65.2 billion during Q2FY21 as against Rs 63.2 billion in the same quarter a year ago.

Net interest income was up 4% at Rs 41.7 billion as against Rs 40 billion.

Bajaj Finance said new loans booked during the second quarter of this fiscal dropped 44% to 3.6 million as against 6.5 million in the corresponding period a year ago.

Its consolidated assets under management (AUM) as of September 30, 2020 stood flat at Rs 1,370.9 billion.

The consolidated results of Bajaj Finance include results of its wholly-owned subsidiaries Bajaj Housing Finance and Bajaj Financial Securities.

To know more, you can read Bajaj Finance's Q2FY21 result analysis on our website.

Equitas Small Finance Bank IPO: Offer Subscribed 2 Times

In news from the IPO space, the Rs 5.2 billion initial public offer of Equitas Small Finance Bank was subscribed 1.9 times at the time of closing stock market hours yesterday, the final day of bidding.

The offer received bids for 217 million equity shares against offer size of 115.8 million equity shares.

The offer size excluded anchor book, through which company had raised Rs 1.4 billion on October 19. ICICI Prudential Life Insurance Company, SBI Life Insurance, Franklin India Smaller Companies Fund, Mirae Asset Large Cap Fund and HDFC Life Insurance Company are among the anchor investors.

The portion set aside for qualified institutional investors has been subscribed 3.9 times, and that of non-institutional investors 15% and retail investors 2 times, at the time of writing.

This is the third public issue in small finance bank segment after AU Small Finance Bank and Ujjivan Small Finance Bank.

The public issue consists of a fresh issue of Rs 2.8 billion and an offer for sale of 72 million equity shares by Equitas Holdings to comply with shareholding norms set by the Reserve Bank of India.

The issue price has been fixed at Rs 32-33 per share.

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

Speaking of IPOs, in one of his videos, Vijay Bhambwani shares his thoughts on the recent spate of IPOs and what it means for the market.

You can check the same here: My View on the IPO Market

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