Sensex Ends 181 Points Higher; Energy and Healthcare Stocks Witness Buying
Closing

Indian share markets continued to trade on a positive note during closing hours but ended their session off day's high.

At the closing bell, the BSE Sensex stood higher by 181 points (up 0.5%) and the NSE Nifty closed higher by 59 points (up 0.5%).

The BSE Mid Cap index ended up by 0.3%, while the BSE Small Cap index ended the day up by 0.1%.

On the sectoral front, gains were seen in the healthcare sector and energy sector. Realty sector and consumer durables sector, on the other hand, witnessed selling.

Asian stock markets finished on a negative note as of the most recent closing prices. The Hang Seng stood down by 0.75% and the Nikkei was trading down by 0.62%, while the Shanghai Composite was trading down by 0.78%.

European markets were also trading on a negative note. The FTSE 100 was down by 1.24%. The DAX was trading down by 0.98%, while the CAC 40 was trading down by 0.70%.

The rupee was trading at 71.84 to the US$ at the time of writing.

In the news from commodities space, gold was trading on a volatile note today. Prices for the yellow metal fell for the second straight day today.

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After the recent decline, gold prices are now down about Rs 1,800 per 10 grams from September highs of about Rs 40,000 per gram.

Gold prices have been weighed down this week as optimism grew about US-China trade ties following a report of "constructive talks" over the weekend, while losses were capped by a softer dollar.

Gold is considered a safe store of value during times of economic or political uncertainty.

Market participants now await minutes of the Federal Reserve's last policy meeting which is due today for clues about the future interest rate trajectory.

Gold is highly sensitive to interest rates, as a lower interest reduces the opportunity cost of holding the non-yielding bullion.

Speaking of gold, how lucrative gold has been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

Gold Has Been a Shining Long-Term Investment

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

Here's what Ankit Shah wrote about this in a recent edition of The 5 Minute WrapUp...

  • In fact, gold has delivered double-digit gains in 10 of the last 15 years.

    During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).

    During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.

    One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment.

    If you grab a pie of the big money-making opportunities beyond stocks, I would strongly insist you attend Vijay's Weekly Cash Summit here (It's free).

Meanwhile, Vijay Bhambwani also talks about how gold has been relied upon by humankind for 3000 years in one of his videos.

If you consider street inflation, your fixed deposits are giving negative yields. In times like these, Vijay considers gold as a safe haven.

So, is it the time to buy gold?

Tune in to find out...

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Moving on to news from the power sector, Kalpataru Power Transmission share price was in focus today. The stock of the company witnessed buying interest as the company exited one of its subsidiaries.

In a filing, Kalpataru Power Transmission said it had completed the sale of its entire stake in Kalpataru Satpura Transco on November 20 after obtaining the regulatory and other approvals.

Consequently, Kalpataru Satpura Transco Private Limited ceases to be the subsidiary of the company from November 20.

The company has entered into definitive agreements to sell its stake in three subsidiaries to CLP India Private Limited, subject to receipt of relevant approvals and completion of conditions precedent.

In other news, stock markets regulator SEBI will be looking to tackle a host of issues at its board meeting scheduled today.

The market regulator may discuss a significant reduction in time taken to process a rights issue to 31 days or less, from the current 55-58 day framework.

Also, as per a leading financial daily, it will consider increasing the minimum investment limit from Rs 25 lakh to Rs 50 lakh and raising the minimum net worth requirement from Rs 2 crore to Rs 5 crore for a company to run a PMS fund.

The regulator is also looking to streamline regulations for auditors, especially after the accounting scandals that have hit India Inc. lately.

We will keep you updated on all the decisions and news 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 Hits Fresh Record High; Vodafone Idea Among Top Gainers
12:30 pm

After opening the day on a positive note, share markets in India continued their momentum to hit a fresh record high.

In the morning trade, the BSE Sensex rallied more than 300 points to hit a fresh record high of 40,816, while the NSE Nifty broke above its crucial resistance level of 12,000.

Presently, the BSE Sensex is trading up by 305 points, while the NSE Nifty is trading up by 87 points.

The BSE MidCap index is trading up by 0.4%, while the BSE SmallCap index is trading up by 0.3%.

Sectoral indices are trading on a mixed note with stocks in the healthcare sector and energy sector witnessing maximum buying interest.

The rupee is trading at Rs 71.67 against the US$.

Speaking of the Sensex touching record high, how expensive is the Sensex at current levels? What has the trend been in recent years?

It would be interesting to see how the valuation of the index has moved over the last five years.

The chart below maps the price to earnings ratio of the Sensex from October 2014 to now.

How Pricey Is the Sensex Now?

How Pricey Is the Sensex Now

Here's what Ankit Shah wrote about this in a recent edition of The 5 Minute WrapUp...

  • It is worth noting that the Sensex has gained 44% over the last five years, compounding at an annual rate of 7.6% (excluding dividends).

    Not quite impressive.

    During the same period, the Sensex price to earnings ratio has mostly been in a rising trend, except some intermittent declines.

    Between October 2014 and now, the gain in the Sensex price to earnings ratio is 42%. That means that the gains in the index have mostly come from expansion in the valuation multiple, and just meagerly from increases in earnings.
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So, before taking the current market bullishness for granted, do weigh in the fact that the Sensex is quite expensively priced.

Also, amid the mood swings of Mr. Market witnessed lately, Tanushree Banerjee in the video below talks about the Rebirth of India phenomenon and how 3 specific trends are racing ahead even in these gloomy times.

Tune in to find out more...

In the news from the banking sector, Yes Bank share price is in focus today as the private sector lender reported a lower net profit of Rs 10.8 billion for the financial year 2018-19 against Rs 17.2 billion announced earlier due to higher non-performing assets (NPAs) assessed by the Reserve Bank of India (RBI).

The divergence in net NPAs of the bank - the difference in bad loans reported by the bank and the assessment done by the RBI - stood at Rs 22.9 billion for 2018-19.

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The lender in a statement said the adjusted (notional) net profit after tax for the year ended March 31, 2019 after taking into account the divergence in provisioning was at Rs 10.8 billion.

The divergence in provisioning was at Rs 9.7 billion.

Note that the Indian stock market regulator has put in place tighter disclosure norms, directing all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report, rather than waiting to publish the details in their annual financial statements.

In another development, Yes Bank yesterday informed the exchanges that Rana Kapoor and promoter entities Yes Capital and Morgan Credits sold their remaining 0.8% stake in bank.

In September, the promoter entities had sold a combined 2.75% in YES Bank through the open market process.

Note that Yes Bank is in need of money to stay compliant with RBI's capital adequacy norms and create enough buffers to provision against bad loans in the coming quarters.

As of the September quarter, Yes Bank's tier I capital adequacy ratio stood at 11.5% against the regulatory requirement of 8.875%.

Its common equity tier 1 capital stood at 8.7%, marginally above the regulatory requirement of 7.375%.

The bank has met at least half-a-dozen large private equity firms and about a dozen foreign family offices since August.

We will keep you updated on all the developments from this space.

In the news from the telecom sector, Vodafone Idea share price and Bharti Airtel share price are witnessing buying interest today as both the companies said they will raise tariffs in December.

Both companies decided to increase prices with effect from December 1, 2019, but have not disclosed the amount of hike.

Vodafone Idea said that to ensure that its customers continue to enjoy world-class digital experiences, the company will suitably increase the prices of its tariffs effective December 1, 2019.

It added that the acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high-level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief.

The company said mobile data charges in India were by far the cheapest in the world even as the demand for mobile data services continues to grow rapidly.

Bharti said the telecom sector was highly capital intensive with fast-changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India. Accordingly, Airtel will appropriately increase price offerings in the month beginning December, the company said.

Note that both incumbent telcos, post the Supreme Court adjusted gross revenue (AGR) ruling, provided for the licence Fee and SUC related dues (including interest and penalties) in Q2FY20, which made for a visibly ugly earnings report card.

As a result, Bharti Airtel reported a loss of Rs 230.4 billion in Q2FY20 and Vodafone Idea's loss stood at Rs 509.2 billion for the quarter.

However, the key positive takeaway has been the amplified talks of government measures to support industry and indicative intent as suggested by media as well as Vodafone Idea (VIL).

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

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


Sensex Opens Higher; Telecom and Energy Stocks Gain the Most
09:30 am

Asian share markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.4% while the Hang Seng is down 0.7%. The Nikkei 225 is trading down by 0.8%. The Dow Jones Industrial Average and the S&P 500 fell from record levels on as forecasts from retailers Home Depot and Kohl's fueled worries about consumer spending and the US-China trade dispute dragged on.

Back home, India share markets opened higher. The BSE Sensex is trading up by 148 points while the NSE Nifty is trading up by 42 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.3% and 0.2% respectively.

Sectoral indices have opened the day on a mixed note with telecom stocks and oil & gas stocks witnessing buying interest. Power stocks and FMCG stocks are trading in red.

The rupee is currently trading at 71.74 against the US$.

Speaking of stocks markets in India, current volatile markets and some recent economic numbers have confused investors.

In conversation with me, Tanushree Banerjee decodes a few economic myths and reveals three big trends of Rebirth of India.

Tune in...

Real estate stocks opened the day on a mixed note with Ansal Housing and Ansal Properties witnessing maximum buying interest. As per an article in a leading financial daily, Dilip Buildcon has bagged an order worth Rs 21.2 billion from Northern Coalfields Ltd, a subsidiary of Coal India, for removal of overburden at a mining project in Madhya Pradesh.

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In mining, overburden is the overlying material (such as rock, soil) that generally has no commercial value.

Reportedly, the company was declared lowest bidder in the reverse auction.

The contract period of the project is 1,552 days.

Coal India accounts for over 80% of domestic coal output.

Dilip Buildcon share price opened the day down by 0.4%.

In another development, Prestige Group has picked up 29% stake in commercial development of a DB Realty project.

The commercial property in Mumbai's Bandra locality has a development potential of over 7 lakh sq ft and is valued at about Rs 21 billion, the reports stated.

The joint venture entity will develop a mixed-use project with total 200 hotel rooms, while the rest will be office space.

The deal marks Bangaluru-based Prestige Estates Projects' entry into the Mumbai commercial market.

Note that, this is the second transaction between Prestige and DB Realty. Last month, the firm had entered into a joint venture with DB Realty to develop a hospitality-led mixed-use project spread in Delhi's Aerocity.

How this strategic move pans out for the company going forward remains to be seen.

Speaking of real estate sector, this is one sector that has tested investor patience over the years. While the sector has seen big moves in the last few years, the downward movement has been equally sharp.

The post demonetisation era has been tough on the sector. Excess inventory, i.e. housing projects stuck for years, has meant homeowners have largely stayed away from any fresh buying in the real estate space.

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Also, post the IL&FS crisis, lending to real estate developers has largely dried up. The BSE Realty Index also reflects the same. It was down 31% in 2018.

But is the scenario about to change?

The government recently announced a Rs 250 billion package to bailout stalled housing projects. It's a much-needed relief for homeowners.

Is the Real Estate Sector Set for a Turnaround?

Is the Real Estate Sector Set for a Turnaround

The BSE Realty Index has seen a sharp bounce post this announcement. It is up 21% for the year.

What would be more interesting is the pickup in consumption once the real estate sector revives.

Once people get their homes, they are likely to spend on tiles, paints, furniture, electronics, pipes, cables, cement, and many other things.

Watch this space for more!

Moving on to the news from the airlines sector. As per the latest data released by the Directorate General of Civil Aviation (DGCA), the domestic air passenger traffic increased by 4% to 12.3 million in October 2019 as compared to 11.8 million in the same month of last year.

In September this year, the domestic passenger growth was just 1.2% as compared to the same month last year.

The passenger load factor in the month of October has shown increasing trend compared to previous months primarily due to the onset of tourist season.

According to data, the passenger load factor of all major airlines, Air India, SpiceJet, GoAir, IndiGo, AirAsia and Vistara declined in October as compared to September this year.

The passenger load factor measures the seat capacity utilisation of the airline.

IndiGo maintained its lead position with 47.4% share of the domestic passenger market in October.

SpiceJet's market share increased from 14.7% in September to 16.3% in October, giving it the number two spot. The market share of Air India, GoAir, AirAsia and Vistara was 12.6%, 11.2%, 6.5% and 5.4% respectively in October.

Airline stocks opened mixed with Jet Airways and Indigo trading in green.

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


CSB Bank IPO, October Passenger Vehicle Sales, and Top Cues in Focus Today
Pre-Open

On Tuesday, Indian share markets witnessed buying interest during closing hours and ended on a positive note.

At the closing bell, the BSE Sensex stood higher by 186 points (up 0.5%) and the NSE Nifty closed higher by 56 points (up 0.5%).

The BSE Mid Cap index ended down by 0.1%, while the BSE Small Cap index ended the day up by 0.3%.

Top Stocks in Focus Today

From the engineering sector, Dilip Buildcon share price will be in focus today as the company has received a Rs 21 billion order from country's largest coal mining company - Coal India.

The construction company in a statement said it has been awarded overburden removal contract mining work for Nigahi Project at Singrauli District in Madhya Pradesh by the Northern Coalfield Limited (NCL), a subsidiary of Coal India.

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Market participants will also be tracking Bharat Heavy Electricals (BHEL) share price as the company has commissioned two more pumping units each at Package-6 (7x116 MW) and Package-8 (7x139 MW) of Kaleshwaram Lift Irrigation Scheme (LIS).

Notably, with this, the company has successfully commissioned all 14 pumping units of these packages within a record period of six months and well within the scheduled time.

Reportedly, these are very large size pump sets with each pump designed to lift 89 cumecs of water against a head of 100 to 125 metres.

From the banking sector, ICICI Bank share price will also be in focus today as the lender is looking to raise around Rs 200 billion by selling 6% to 7% stake to institutional investors. The bank has approached at least 10 investment banks for the same.

As per the news, the country's largest private-sector lender plans to complete the entire raise in a single tranche and may soon issue formal mandates to some of the investment banks it approached.

The move, which would be the largest such capital raise in India, is aimed at subverting liquidity squeeze created in the sector after the IL&FS saga.

From the IPO Space...

Kerala-based private sector lender CSB Bank, formerly known as Catholic Syrian Bank has announced the launch of its initial public offering (IPO) worth nearly Rs 4.1 billion.

The IPO will hit the markets between 22-26 November and will be available at a price band of Rs 193-195 apiece.

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The bids for the offer can be applied for a minimum of 75 shares and its multiples.

The proposed initial share sale will see the lender raise fresh capital worth Rs 240 million, while its existing shareholders, including ICICI Lombard General Insurance, HDFC Life Insurance, ICICI Prudential Life Insurance, The Federal Bank, Bridge India Fund, Satellite Multicomm, Way2Wealth Securities and Edelweiss Tokio Life Insurance, will sell 19.78 million shares for Rs 3.85 billion via the offer for sale route.

According to its red herring prospectus, the company will use the proceeds from the fresh issue during the current fiscal to augment the bank's tier-1 capital base and to meet its future capital requirements.

While 75% of the offer is kept aside for qualified institutional buyers (QIBs), 15% is reserved for non-institutional investors and 10% for retail investors.

CSB Bank is one of the oldest private lenders in India, having a strong presence in Kerala, Tamil Nadu, Maharashtra and Karnataka.

For the six months ended September 30, the bank reported a revenue of Rs 8.17 billion. Its profit, for the first half of FY20, stood at Rs 443 million, reversing the loss of Rs 657 million reported in FY19.

In terms of asset quality, the bank's gross non-performing assets (NPA) were 2.86% of its total advances, declining from 4.87% as of March 31.

Its total NPA provisioning and write-offs stood at Rs 2.7 billion for the six-month period ended September 30, against Rs 11.3 billion provisioning and write offs between FY17-19.

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

Passenger Vehicles Sales Jump in October

In the news from the automobile space, retail sales of passenger vehicles jumped 11% year-on-year (YoY) in October to 248,036 units.

This was seen largely because of discounts offered during Navaratri and Diwali.

Sales, however, were largely flat when compared with 223,498 units sold in September.

In the two-wheeler segment, retail sales rose 5% YoY to 1,334,941 units in October, while those of three-wheelers increased 4% YoY to 59,573 units.

Given the slump in overall economic activity and over capacity with fleet owners because of an increase in freight carrying capacity of trucks, sales of heavy commercial vehicles slumped 23% YoY to 67,060 units during the month.

According to the Federation of Automobile Dealers Associations (FADA), during the festival period, retail sales of vehicles rose just 1% YoY to 343,319 units, while those of motorcycles eased 2% to 1,899,032 units in October. Commercial vehicle segment registered an 18% YoY decline in retail sales during the period.

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

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