Of Auto Sector Worries and LIC's Latest Burden
Podcast

Vehicle sales failed to impress this festive season, as consumer sentiment fell. Registrations of vehicles in the domestic market during the 42- day festive season this year fell by as much as 11% year-on-year.

What's worrisome is that it is normally a peak period for new vehicle registrations in the country. Worse, the decline comes on the heels of sales contraction in the three months of July, August and September.

The auto index has taken a beating too. The BSE Auto index shed 20% between July and end-October before recovering marginally this month.  Where can auto stocks go from here? Listen in.

Moving on, LIC is all set to take over the debt-laden IDBI bank, as the Competition Commission of India gave its nod for a 51% acquisition in the bank.

What does Equitymaster think about the proposed acquisition? Tune in to find out!

Further, we also look at the latest updates in the crude oil markets. Crude oil has fallen over 30% after peaking in October. Where could it go from here. Listen in now!


Indian Indices Finish Flat; Realty & Healthcare Stocks Witness Buying
Closing

Indian share markets continued to trade on a positive note during closing hours of trade and ended the day on a flat note. Gains were seen in the realty sector, healthcare sector and IT sector, while oil & gas stocks and PSU stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 24 points (up 0.1%) and the NSE Nifty closed higher by 18 points (up 0.2%). The BSE Mid Cap index ended the day up 0.6% and the BSE Small Cap index ended the day up by 0.5%.

Speaking of small caps, it's interesting to see how the BSE Smallcap index has performed during the years. Have a look at the chart below:

The Smallcap Index Is Up Merely 1% from Its 2008 Top

On 7 January 2008, at the height of the previous bull run, the Smallcap index hit a high of 13,975. In the market crash that followed, the index hit a low of 2,867 on 9 March 2009. In other words, the Smallcap index tanked a whopping 79%!

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Tanushree Banerjee's 7 Money-Spinning Stocks in This Uncertain Market

Tanushree, the editor of StockSelect believes that the recent market downturn has thrown up some great investing opportunities…

And she has put together a special report, 7 Stocks to Profit from This Market Crash, to share with her subscribers.

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Ankit Shah shares an interesting observation around this data. Here's him in a recent edition of The 5 Minute WrapUp...

  • From its 2009 low, the BSE SmallCap index has risen 391%, compounding at an annual rate of 18%.

    But here's the most telling observation...

    From its January 2008 peak to now, the BSE SmallCap index has gained just 0.8%.

    If you factor in inflation, the returns are actually negative.

    In other words, investors who bought smallcap stocks at market peaks and didn't go bargain hunting in the subsequent crashes didn't make any money.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 0.2% and the Shanghai Composite was up by 0.8%. The Nikkei 225 was up 0.4%.

In the news from the economy, the rupee climbed 21 paise to hit a three-month high of 69.64 against the US$ amid weakness against overseas currencies.

On Thursday, the rupee gained 77 paise to hit a three-month high of 69.85.

The rupee also gained momentum following easing crude oil prices, which slipped below $60 as investors were concerned over a supply glut.

This is a big reversal for the rupee which had hit a record low of 74.48 against the US$ on October 11.

At the time of writing, the rupee was trading at 69.90 against the US$.

Also, speaking of rupee, note that the Indian rupee is the worst performer in Asia in 2018.

Here's what we wrote about rupee and its repercussions in one of the edition of The 5 Minute WrapUp...

  • The rupee is under pressure due to a strong dollar and high oil prices. Similarly, the spill-over from the emerging-market turmoil in Argentina and Turkey is weighing on the rupee.

    The falling rupee is also triggering sales of bonds and stocks, which in turn is further pressuring the rupee.

    Nevertheless, last week, the government announced several measures. This includes cutting down non-necessary imports, removal of withholding tax on rupee-denominated bonds, and easing overseas borrowing norms.

    That said, in the near term, the rupee being under pressure could benefit export-oriented businesses.

Moving on to the news from the pharma space, Lupin share price witnessed buying interest today.

Reportedly the company has launched Nystatin and Triamcinolone Acetonide Cream USP 100,000 units/gm; 0.1%, having received an approval from the United States Food and Drug Administration (USFDA) earlier.

Nystatin and Triamcinolone Acetonide Cream had annual sales of $54.3 million in the US as per IQVIA MAT September 2018.

The company's Nystatin and Triamcinolone Acetonide Cream USP 100,000 units/gm; 0.1% is the generic equivalent of Taro Pharmaceuticals' Nystatin and Triamcinolone Acetonide Cream. It is indicated for the treatment of cutaneous candidiasis.

Lupin share price ended the day up by 1.7%.

You can read Lupin Q2FY19 result analysis and Lupin annual report on our website.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Sensex Trades Flat; Yes Bank & Wipro Top Gainers
12:30 pm

Share markets in India are presently trading on a flat note. Sectoral indices are trading mixed with stocks in the realty sector, healthcare sector and IT sector witnessing maximum buying interest while oil & gas stocks and PSU stocks are witnessing selling pressure.

The BSE Sensex is trading up by 52 points (up 0.1%), while the NSE Nifty is trading up by 17 points (up 0.2%). The BSE Mid Cap index is trading up 0.4% and the BSE Small Cap index is trading up by 0.5%.

The rupee is trading at Rs 69.64 against the US$.

In the news from the banking space, Yes bank share price is witnessing buying interest today after it was reported that the Managing Director and CEO Rana Kapoor may not be in the contest for the post of chairman.

It was also reported that the private bank's promotor Rana Kapoor doesn't have any ownership in Morgan Credits or Yes Capital.

The bank said all necessary legal, technical approvals have been taken. The company had received full disclosures for these promoter companies.

Note that the stock of the company plunged to its lowest levels in over two years in yesterday's trade before recovering during closing hours. Losses were seen after credit rating agencies ICRA and CARE ratings downgraded the bank's debt instruments.

ICRA downgraded domestic long-term ratings of the bank's senior debt instruments to 'ICRA AA' from 'ICRA AA+' and its subordinate debt instruments to 'ICRA AA-' from 'ICRA AA'.

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Tanushree Banerjee's 7 Money-Spinning Stocks in This Uncertain Market

Tanushree, the editor of StockSelect believes that the recent market downturn has thrown up some great investing opportunities…

And she has put together a special report, 7 Stocks to Profit from This Market Crash, to share with her subscribers.

Here's how you can join them and claim your FREE copy of this report now.

If you get in now, you can even claim an additional year of access to StockSelect, absolutely free.

This offer ends at 11:59 PM, Tonight.

Full details here.
------------------------------

Meanwhile, CARE Ratings cut domestic ratings of Yes Bank's senior debt instruments to 'CARE AA+' from 'CARE AAA' and subordinate debt instruments to 'CARE AA' from 'CARE AA+'.

Earlier this week, Moody's also downgraded the bank's foreign currency issuer rating and changed the outlook on the bank to 'negative' from 'stable'.

Yes bank share price is presently trading up by 4.7%.

To know more about the company, you can access to Yes bank Q2FY19 result analysis and Yes bank Stock Analysis on our website.

Moving on to the news from the commodity space, oil prices are trading on a firm note on expectations that Organization of the Petroleum Exporting Countries (OPEC) and Russia will agree some form of production cuts next week, although increasing US supplies kept markets in check.

Despite the firm prices, crude oil has lost almost a third of its value since early October because of an emerging supply glut following a global surge in production, including from the US, Russia and OPEC.

The US, Russia and Saudi Arabia will be part of a meeting of the Group of 20 industrialized nations in Buenos Aires, Argentina, this weekend.

The OPEC plus Russia and other allies will meet on 6th and 7th December. Producers are also discussing a supply curb of 1 million to 1.4 million barrels per day (bpd) and possibly more.

Speaking of crude oil, India's crude oil production was lower by 4.2% in September 2018 as compared to last year.

India's Increasing Crude Oil Demand Supply Gap

The worrying factor is this was the lowest production this year.

Here's what Tanushree Banerjee wrote about it in one of the recent editions of The 5 Minute WrapUp...

  • Comparing domestic production with the crude oil processed by refineries gives an idea of the demand supply gap. Low domestic production as compared to the demand for crude oil places a huge burden on India's import bill.

    Rising crude oil prices could have severe implications. Rising inflation. Rising interest rates. Pressure on the government to cut excise duty, thereby impacting its revenues.

    We have seen some of this play out. With elections around the corner, expect a lot of subsidies on fuel prices. This is bound to worsen India's fiscal deficit further.

It would be interesting to see how this pans out. Meanwhile, we will keep you updated on all the developments from this space.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Indian Indices Open on a Positive Note; IT & Realty Stocks Lead
09:30 am

Asian shares are trading on a positive note today. The Nikkei 225 is up 0.2%, while the Hang Seng is up 0.6%. The Shanghai Composite is trading up by 0.3%.

Back home, India share markets have opened the day on a positive note. The BSE Sensex is trading up by 179 points (up 0.5%) while the NSE Nifty is trading up by 56 points (up 0.5%). The BSE Mid Cap index is trading up by 0.4%, while the BSE Small Cap index has opened the day up by 0.5%.

Sectoral indices have opened the day on a positive note with IT stocks and realty stocks witnessing maximum buying interest.

The rupee is trading at 69.65 to the US dollar.

In the news from the automobiles space, Tata Motors' jaguar land rover (JLR) is reportedly reducing the workforce at the plant in Solihull, central England.

About 500 of the factory's 1,600-strong workforce could be affected at any one time through a two-week period.

The company also reported that the external environment remains challenging and decisive actions are taken to achieve the necessary operational efficiencies to safeguard long term success.

In other news, Jaguar Land Rover (JLR) has also won the backing of the UK government's 25-million Pounds grant intended to accelerate the development of innovative low-carbon vehicle technologies.

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Tanushree Banerjee's 7 Money-Spinning Stocks in This Uncertain Market

Tanushree, the editor of StockSelect believes that the recent market downturn has thrown up some great investing opportunities…

And she has put together a special report, 7 Stocks to Profit from This Market Crash, to share with her subscribers.

Here's how you can join them and claim your FREE copy of this report now.

If you get in now, you can even claim an additional year of access to StockSelect, absolutely free.

This offer ends at 11:59 PM, Tonight.

Full details here.
------------------------------

The funding will be provided through the UK's Advanced Propulsion Centre (APC) enabling JLR and others to drive the development of low-carbon propulsion technologies and their supply chains.

Tata Motors share price is presently trading down by 2.2%

To know more about the company, you can access to Tata Motors Q2FY19 result analysis and Tata Motors stock analysis on our website.

Speaking of blue-chip automobile stocks, one out of every three household in India is a buyer of their products. They own some of the cult brands in Indian automobile space.

Bluechip Auto Are Stocks Way Off Their Valuation Peaks

They have formidable R&D teams. They have been through several economic cycles over decades. Few have even visited near-bankruptcy in the past and come out successful.

Yet, some of the biggest passenger car, commercial vehicle, and two-wheeler companies in India have seen a huge dent in valuations in recent times.

Tanushree Banerjee, Co-head of Research at Equitymaster believes, this could be the opportunity long term investors were waiting for.

Moving on to the news from the pharma space Sun Pharma share price is witnessing buying interest today.

Reportedly, the company has disclosed all information under Section 30 of market regulators (LODR) rules, in response to queries raised by exchanges.

Sun pharma share price is presently trading up by 0.9%.

Speaking of pharma sector, note that the BSE Healthcare Index has been on a roller coaster ride in the past few years. The period from 2012 to 2015 saw the index go up more than three times.

As we wrote in one of our editions of The 5 Minute WrapUp...

  • Pre-2015, pharma companies enjoyed a fairytale ride in the US market. Low labor costs, good chemistry skills, along with efficiency, ensured Indian companies could copy innovator drugs to make generic drugs at a fast pace.

    The generic business had lucrative margins for all major pharma players. But the party did not last long. In the quest to supply drugs quickly, they compromised on quality at their manufacturing facilities.

    No wonder, the US regulatory authority (USFDA) took strict action. Sun Pharma received a warning letter for its Halol manufacturing facility in 2015. It was like a bolt out of the blue. Since then, the downward spiral began and has continued till date.

We believe that pharma companies that invest in creating a pipeline of complex generics or building competencies in alternative dosage forms are better equipped to tackle the changing dynamics in the US generics market as well as in the overall industry.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Strengthening Rupee, Oil Prices, and Top Stocks in Action Today
Pre-Open

Indian share markets traded on a positive note yesterday and ended on a strong note. Gains were largely seen in the metal sector, realty sector and banking sector, while IT stocks and power stocks witnessed selling pressure.

At the closing bell on Thursday, the BSE Sensex stood higher by 453 points (up 1.3%) and the NSE Nifty closed higher by 130 points (up 1.2%). The BSE Mid Cap index ended up 0.6% and the BSE Small Cap index ended up by 0.2%.

Top Stocks in Action Today

From the automobiles sector, Tata Motors share price will be in focus today as the company's wholly owned subsidiary - Jaguar Land Rover (JLR) has won the backing of the UK government's 25-million Pounds grant intended to accelerate the development of innovative low-carbon vehicle technologies.

The funding will be provided through the UK's Advanced Propulsion Centre (APC) enabling JLR and others to drive the development of low-carbon propulsion technologies and their supply chains.

To know more about the company, you can access to Tata Motors Q2FY19 result analysis and Tata Motors stock analysis on our website.

From the aviation space, SpiceJet share price will be in focus today as the company has deposited an additional bank guarantee worth Rs 200 million to the Airports Authority of India (AAI) after getting a notice from the state-run airport operator with the low-cost carrier's dues exceeding its bank guarantee.

Wipro share price will also be in focus today as the company's arm Wipro Enterprises' Consumer Care and Lighting business has entered into agreement with Belgian lighting manufacturer Schreder. As part of the agreement, Wipro Lighting will market Schreder's lighting products and solutions in India.

--- Advertisement ---
Tanushree Banerjee's 7 Money-Spinning Stocks in This Uncertain Market

Tanushree, the editor of StockSelect believes that the recent market downturn has thrown up some great investing opportunities…

And she has put together a special report, 7 Stocks to Profit from This Market Crash, to share with her subscribers.

Here's how you can join them and claim your FREE copy of this report now.

If you get in now, you can even claim an additional year of access to StockSelect, absolutely free.

This offer ends at 11:59 PM, Tonight.

Full details here.
------------------------------

Market participants will also track Bharti Airtel share price.

Reportedly, the company is eyeing to raise funds worth Rs 120 -150 billion through issue of fresh shares to repay debt and bring down borrowing costs in FY19.

The above move is a part of the company's strategy to raise about Rs 300 billion in three tranches to meet capital expenditure, bolster cash flows, reduce debt and financing costs.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.

Rebound in Rupee

The rupee continued its upward trend yesterday and rose for the third day against the US$.

The rupee touched 69.85 a dollar yesterday which is the first time that the currency has strengthened past 70/$ mark in three months.

This is a big reversal for the rupee which had hit a record low of 74.48 against the US$ on October 11.

The gains in the rupee came amid a broad drop in US dollar against other currencies as well. The dollar slipped after dovish comments from US Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes.

Oil Prices Tumble

Oil prices fell below $50 a barrel for the first time in more than a year as Russia signaled little urgency to commit to supply cuts, while US crude stockpiles continue to grow.

Just days before talks on oil policy with Saudi Arabia, Russian President Vladimir Putin said current prices are 'absolutely fine', while Saudi energy minister said the kingdom is confident Organization of Petroleum Exporting Countries (OPEC) and its partners can reach a deal to stabilize the market.

Reportedly, US President Donald Trump is open to a trade deal with China but is also prepared to hike tariffs on imports from the country if there is no breakthrough on longstanding trade issues during a dinner on Saturday with Chinese leader Xi Jinping.

Traders are expecting that the Organization of Petroleum Exporting Countries (OPEC) and allied producers may agree on oil cuts at their gathering next week in Vienna.