Sensex Ends 126 Points Lower; Telecom and Metal Stocks Witness Selling
Closing

India share markets witnessed selling pressure during closing hours and ended their day on a negative note.

At the closing bell, the BSE Sensex stood lower by 126 points (down 0.3%) and the NSE Nifty stood down by 54 points (down 0.5%).

The BSE Mid Cap index ended the day down 1%, while the BSE Small Cap index ended the day down by 0.7%.

Sectoral indices ended on a mixed note. Stocks in the telecom sector and metal sector witnessed huge selling pressure, while realty stocks were trading in the green.

The rupee was trading at 71.54 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 0.20% and the Shanghai Composite was up by 0.31%. The Nikkei 225 was down 0.64%.

European markets were also trading on a mixed note. The FTSE 100 was down by 0.58%. The DAX was trading up by 0.86%, while the CAC 40 was also up by 0.13%.

In the news from the capital markets space, foreign institutional investors (FIIs) pumped a net of US$ 3.2 billion into Indian equities in November. This number was the highest seen so far this financial year.

However, market watchers warn that the so-called hot money flow is part of incremental allocation to emerging markets.

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Note that in the third-week of November, EPFR-tracked emerging markets equity funds continued to benefit from the easing bias of major central banks and hope that the US and China would reach an agreement on trade issues.

During the week ending November 20, emerging markets funds posted their fourth consecutive inflows, with major regional groups taking in fresh money as retail redemptions moderated for the second consecutive week, fund flow tracker EPFR said in a note.

However, India-specific flows are yet to revive on lack of near-term catalysts, specifically after economic growth tumbled to its lowest level in more than six years.

For the year-to-date period, FIIs have invested a net of US$ 13.5 billion in Indian shares, having been net buyers for three months in a row.

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

Moving on to the news from the commodity space, India's gold imports in November jumped 78% from a month earlier. This was the highest level in 5 months and the growth came in as jewellers in the world's second-biggest consumer of the metal restocked after a fall in prices.

As per a government source, New Delhi imported 71 tonnes of gold in November, compared with 40 tonnes in October.

Imports, however, were down 16% from November 2018.

In value terms, November imports totalled US$ 2.94 billion, slightly higher than last year's US$ 2.76 billion.

It would be interesting to track the above numbers in coming months and see how this trend pans out. Meanwhile, we will keep you updated on all the developments from this space.

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 one of the editions 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).
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Meanwhile, Vijay Bhambwani 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...

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


Sensex Drops 200 Points; Yes Bank & Tata Steel Fall 4%
12:30 pm

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

Sectoral indices are trading mixed with stocks in the telecom sector, metal sector and energy sector witnessing selling pressure, while consumer durable stocks and IT stocks are witnessing buying interest.

The BSE Sensex is trading down by 183 points (down 0.4%), while the NSE Nifty is trading down by 65 points (down 0.5%). The BSE Mid Cap index is trading down by 0.8%, while the BSE Small Cap index is trading down by 0.6%.

The rupee is currently trading at Rs 71.59 against the US$.

In news from the mining sector, shares of NMDC declined over 3.5% in early trade today after the company reported weak iron ore production in November.

The company's production for the month was down 10.6% at 2.94 MT against 3.29 MT.

The company's sales remained flat at 2.79 MT, YoY.

NMDC share price is presently trading down by 1.1%.

In latest developments from the IPO space, domestic institutions have issued commercial papers worth more than Rs 325 billion to fund IPOs of Ujjivan Small Finance Bank and CSB Bank.

As per an article in The Economic Times, IIFL, Infina Finance, Aditya Birla Finance, JM Financial and Sharekhan BNP Paribas are among the institutions that have issued commercial papers, mostly for a 14-day period offering 7.5-8% yield, specifically to fund these IPOs.

Here's an excerpt from the article:

  • Out of the 15 IPOs so far this year, only three - Affle India, IRCTC and CSB Bank - were financed by the NBFCs, but this would be the highest amount raised this year. In 2018 only three of the 24 IPO saw demand for IPO finance.

Ujjivan Small Finance Bank's Rs 7.5 billion initial public offering, which opened for subscription on Monday, could see a good response because of the funding.

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The issue was subscribed 1.7 times on day one, buoyed by strong participation from retail investors. The retail investor portion was subscribed nearly 9 times.

On Friday the company allotted shares worth Rs 3 billion to anchor investors. The allotment was made at Rs 37 per share.

The IPO closes on Wednesday. The price band for the issue is Rs 36 to Rs 37 per share.

Microfinance lender Ujjivan Financial Services is the holding company of Ujjivan Small Finance Bank.

How this IPO sails through remains to be seen. Stay tuned for more updates from this space.

Speaking of IPOs, 2019 has seen some of the most mindbogglingly profitable IPOs.

The top six IPOs of the year have given high double-digit and triple-digit returns so far - IRCTC (180%), IndiaMART InterMESH (121%), Affle India (105%), Neogen Chemicals (73%) and Polycab India (72%).

In a recent edition of The 5 Minute WrapUp, Ankit Shah shares how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of the year and checked the retail investor enthusiasm for them.

Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments. This can be seen in the chart below:

Are Retail Investors Back in the IPO Game?

Are Retail Investors Back in the IPO Game

Here's what Ankit wrote about it...

  • Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!

    Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.

Does this hint that retail investors are coming back to the markets? Could we witness of flurry of IPOs in the coming months?

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Ankit is keeping a close watch and going to pick all the profitable IPOs for his readers at Insider.

Also, since we are talking about IPOs, this one IPO has been the hot topic in the world over. I am talking about the Saudi Aramco IPO.

There's a lot going on this front.

Saudi Aramco's much heralded and oft-delayed initial public offering is going ahead, albeit in a scaled down version of the original plan by Saudi Crown Prince Mohammed bin Salman.

There'll be no grand opening on the London or New York stock exchanges. The sale is restricted to the Saudi bourse and won't even by marketed to most international money managers.

Investors will be able to purchase just 1.5% of the world's most profitable company, about half what was previously considered. Even so, the share sale in early December will come close to, or even surpass, the record for the biggest IPO in history.

So, what does all that mean for crude oil investors and traders? And why is important?

At a time when Saudis are not sharing many details with their wall street investment bankers, Vijay Bhambwani in his latest video, raises a few questions that the mainstream media is not covering, and not even crude oil traders are asking...

Tune in to find out...

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


Indian Stock Markets Open Flat; Metal and Telecom Stocks Lag
09:30 am

Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.9% while the Hang Seng is down 0.2%. The Shanghai Composite is trading down by 0.3%. Wall Street stepped back from last week's record highs on Monday, with weak US manufacturing data and fresh trade worries keeping buyers on the sidelines.

Back home, India share markets opened marginally down. The BSE Sensex is trading down by 68 points while the NSE Nifty is trading down by 19 points. Both, the BSE Mid Cap index and BSE Small Cap index opened up by 0.1%.

Sectoral indices have opened the day on a mixed note with consumer durables and automobiles stocks witnessing buying interest. Metal and telecom stocks are trading in red.

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Speaking of the Sensex above 40,000 levels, how expensive is the Sensex? 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 one of the editions 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.

So, before taking the current market bullishness for granted, do weigh in the fact that the Sensex is quite expensively priced.

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Moving on, the rupee is currently trading at 71.60 against the US$.

The rupee, on Monday, settled 8 paise higher at 71.66 against the US dollar amid participants hoping the RBI will go in for another rate cut in the ensuing RBI policy review meet this week.

Reportedly, the domestic currency opened weak as investors traded cautiously after India's Q2 GDP growth dipped to an over six-year-low of 4.5%, but during the day, the local unit gathered strength anticipating further easing in key rates to boost the slowing economy.

At the interbank foreign exchange, the rupee opened weak at 71.78 a dollar, but soon gathered strength to touch a high of 71.62 before finally settling at 71.66, up 8 paise over its last closing.

The rupee had closed at 71.74 against the US dollar on Friday.

Moving on to the news from pharma sector. As per an article in a leading financial daily, Biocon has launched Trastuzumab biosimilar Ogivri in the US market, bringing access to another biosimilar.

Ogivri, a biosimilar to Herceptin, has been co-developed by Biocon Biologics and Mylan and will be available in 150 mg and 420 mg strengths.

Ogivri will be launched at a competitive discount for customers to help ensure access and increase treatment options for patients, the company stated.

Ogivri is used to treat breast cancer and gastric cancer and Biocon has regulatory approval to sell it in more than 80 countries worldwide.

It is the second biosimilar from the partnered portfolio of Biocon and Mylan being commercialised in the US.

Last year, Biocon had launched Fulphila, a biosimilar Pegfilgrastim which is used to stimulate bone marrow to produce more neutrophils to fight infection in patients undergoing chemotherapy.

Biocon Biologics currently has a product pipeline of 28 molecules, including 11 partnered with Mylan, several with Sandoz and many being developed independently.

The company recently received a USFDA approvals for supplemental Biologics License Applications, expanding the manufacturing capability for Ogivri and Fulphila.

Reportedly, the US biosimilars market is projected to reach US$17,696 million by 2026 and grow at a CAGR of over 50% between 2019 and 2026.

Multinational pharma giant Pfizer too received approval from FDA for Trazimera, a biosimilar referencing Herceptin in March this year and has plans to commercialise the product by February 2020.

Speaking of the biosimilars, note that, biosimilars and biologics are burgeoning sectors. Also, major scientific and technological advances, coupled with socio-demographic changes and increasing demand for medicines will revive the pharma industry's fortunes in another 10 to 20 years.

But given the complexity of biologics, will Indian companies be able to break some ground in this space?

Going forward, whether the monetization of biosimilars prove to be a big growth driver for the company will be the key thing to watch out for.

Biocon share price opened the day up by 2.2%.

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


India's Manufacturing Activity, November Automobile Sales, and Top Stocks in Action Today
Pre-Open

On Monday, Indian share markets traded on a volatile note throughout the day and ended flat.

The BSE Sensex closed higher by 8 points to end the day at 40,802. Bharti Airtel and Reliance Industries were among the top gainers.

While the broader NSE Nifty ended down by 8 points to end at 12,048.

Among BSE sectoral indices, automobile stocks fell the most, followed by IT stocks and healthcare stocks.

Top Stocks in Action Today

Coal India share price will be in focus today as the company has reported fall in its production by 3.9% to 50.02 million tonnes in November. Coal offtake during November too contracted by 7.6% to 47.4 million tonnes as compared with 51.3 million tonnes in the year-ago month.

Alembic Pharma share price will also be in focus today as the company's joint venture (JV) - Aleor Dermaceuticals (Aleor) has received tentative approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Diclofenac Sodium Topical Solution USP, 2% w/w.

Market participants will also track VA Tech Wabag share price. Reportedly, the company has signed a contract worth Rs 14.8 billion with the Uttar Pradesh (UP) government for taking up operation and maintenance of sewage treatment plants in Agra and Ghaziabad.

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November Auto Sales

Eicher Motors' motorcycle division has reported 8% decline in sales at 60,411 units in November 2019 as compared to 65,744 motorcycles sold in November 2018. During November 2019, export of number of motorcycles increased to 2,119 units from 718 units in November 2018.

Meanwhile, VE Commercial Vehicles, a joint venture (JV) between Eicher Motors and Volvo Group, has reported sales of 3,594 units in November 2019 as compared to 4,720 units in November 2018, registering a fall of 23.9%.

Bajaj Auto has registered a fall of 1% in total sales to 403,223 units in November 2019 against 406,930 units in November 2018.

Tata Motors has reported domestic sales of 38,057 units for November 2019, as compared to 50,470 units for November 2018, posting a decline of 25%.

Ashok Leyland has reported a fall of 22% in November 2019 sales (Domestic + Exports) to 10,175 units, as against 13,119 units sold in the same month of last year.

The company reported a 32% decline in its medium and heavy commercial vehicle (M&HCV) products segment to 5,966 units in November 2019, as compared to 8,716 units sold in November 2018.

TVS Motor has registered sales of 266,582 units in November 2019 as against sales 319,965 units in the month of November 2018.

Atul Auto has reported sale of 4,297 units, with a rise of 7.3% for the month of November 2019 as compared to 4,003 units sold in November 2018. Total sales from April to November (2019-20) stood at 32,241 units as against 33,435 units sold during the same period of 2018-19.

Maruti Suzuki India, which had posted a 2.3% increase in sales in October breaking a series of seven straight months of decline, fell again in November posting a 3.3% drop in its passenger vehicle sales over the last year.

The company dispatched 139,133 units to its dealerships across the country last month against 143,890 units in October last year. In absolute terms this was Maruti's highest sales in any month this fiscal.

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From the Macroeconomic Space...

Business conditions in India's manufacturing sector improved in November. However, firms shed jobs for the first time in 20 months.

The IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October when it had fallen to a two-year low. It remained above the 50-mark threshold that separates contraction from expansion.

As per the survey, subdued sales prevented hiring in November, with payroll numbers declining for the first time in 20 months. A number of companies indicated that workloads had been managed by existing staff, while others cited the non-replacement of retirees and non-renewal of temporary contracts.

The decline in growth was led by manufacturing, which saw a 1% contraction in gross value added against a 6.9% rise in the corresponding quarter last year.

Consumer goods provided the main impetus to overall growth, while the intermediate goods category returned to expansion territory. Conversely, there was a solid deterioration in operating conditions at capital goods makers.

These job cuts have come amid India's economy growing 4.5% in the July-September quarter - the slowest pace of expansion in over six years.

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

From the IPO Space...

The initial public offering (IPO) of Ujjivan Small Finance Bank (USFB) got fully subscribed on the first day of the bidding process. The interest was seen on the back of strong retail interest.

On the BSE, the issue was subscribed 76%, with retail individual investor (RII) quota subscribing by 4.34 times. On the NSE, the issue got 30% subscription, with RII quota subscribing by 1.75 times.

The company is looking to raise up to Rs 7.5 billion through this IPO.

The price band has been set at Rs 36 to Rs 37 per equity share, and the offer will close for subscription on December 4.

Earlier this month, USFB raised Rs 2.5 billion in a pre-IPO round.

The bank's parent microfinance lender Ujjivan Financial Services went public in 2016 after receiving an in-principle license from the Reserve Bank of India (RBI) to start a small finance bank.

We will keep you updated on more developments for this IPO in the coming days. Stay tuned.

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