Sensex Opens above 49,000 Mark; Infosys & TCS Top Gainers

Mon, 11 Jan 09:30 am

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Asian stock markets opened higher today as traders weighed the implications of higher US Treasury yields amid President-elect Joe Biden's push for huge fiscal aid to fight the impact of the pandemic.

The Hang Seng is trading up by 0.64% while the Shanghai Composite is down 0.3%.

In US, Wall Street indices rose to all-time highs on Friday after Biden said he'll lay out proposals this week for trillions of dollars in fiscal support to fight the economic toll of surging virus cases.

The Dow Jones Industrial Average ended up by 0.2% while the tech heavy Nasdaq ended up by 1.03%.

The Dow and the Nasdaq Composite gained 1.6% and 2.4% for the last week, also reaching all-time highs.

Back home, Indian share markets have opened on a strong note, following the trend on SGX Nifty.

Market participants are tracking Avenue Supermarts share price as the firm posted a 16% jump in profit.

The BSE Sensex is trading up by 324 points. Meanwhile, the NSE Nifty is trading higher by 85 points.

Infosys is among the top gainers today. Sun Pharma, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.1%. The BSE Small Cap index is trading up by 0.6%.

Sectoral indices are trading on a mixed note with stocks in the IT sector and automobile sector witnessing buying interest. Metal stocks have opened in red.

The rupee is trading at 73.44 against the US$.

Gold prices are trading down by 0.4% at Rs 48,750 per 10 grams.

Speaking of stock markets, note that since the lows in March 2020, the smallcap index has gained more than 110%.

While caution is indeed warranted, Richa Agrawal, Research Analyst at Equitymaster, thinks there is still a lot more steam left to this smallcap rally.

Here's what she wrote in one of the recent editions of Profit Hunter...

• For one, the gap between Sensex and smallcap index is still huge.
  
  In January 2018, the smallcap to Sensex ratio was 0.57 times, versus a long term average of 0.44 times.
  
  At present, this ratio stands at 0.37 times, well below the long-term average.
  
  The possibility of a convergence between growth and value is a lot higher in the smallcap space, than in the large caps.
  
  And then here are some other interesting facts.

The above observations have served Richa's smallcap service Hidden Treasure well. Her first batch of essential stock recommendations have offered robust returns so far, as can be seen in the chart below:

While the margin of safety in valuations has come down in these stocks, Richa has recently added another stock to this list.

This company is the world's largest player in a niche segment and its product falls in the essential category. This global leader enjoys unique competitive advantages that are hard to replicate by its peers.

If you are interested in knowing more and in becoming a Hidden Treasure subscriber, here's where you can sign up.

In latest developments from the IPO space, Indigo Paints has received approval from the capital markets regulator to raise money through an initial public offering (IPO).

The Sequoia Capital-backed Indigo Paints had filed its preliminary IPO papers with regulator in November last year.

The IPO will comprise fresh issuance of shares aggregating to Rs 3 billion and an offer-for-sale of up to 58,40,000 equity shares by private equity firm Sequoia Capital, through its two funds SCI Investments IV and SCI Investments V, and promoter Hemant Jalan.

Note that calendar year 2021 is set to witness a flood of IPOs as fundraising via public issue route gathers steam.

Reportedly, at least 15 companies may come out with their initial public offerings. These include Indian Railway Finance Corporation (IRFC), Kalyan Jewellers, Suryoday Small Finance Bank, ESAF Small Finance Bank, Indigo Paints, Brookfield India Real Estate Trust, Barbeque Nation Hospitality, Home First Finance Company and Railtel Corporation Of India.

Among these, companies such as Indigo Paints, Home First Finance, IRFC, Brookfield REIT and Railtel Corporation of India are expected to launch their IPO in January.

How the IPO market performs in 2021 remains to be seen.

Moving on to stock specific news...

Tata Consultancy Services (TCS) is among the top buzzing stocks today.

TCS, India's largest IT exporter in terms of revenues, on Friday said its profit rose 7.2% YoY to Rs 87 billion in December quarter compared with Rs 81.2 billion in the corresponding quarter last year.

Revenue for the quarter rose 5.4% YoY to Rs 420.2 billion compared with Rs 398.5 billion in the same quarter last year. The company said it was its strongest third quarter in nine years.

In dollar terms, the revenue was up 5.1%. On a constant currency basis, revenue rose 4.7%, the IT major said in a BSE filing.

Operating margin for the quarter came in at 26.6% compared with 25% in the same quarter last year. Net margin stood at 20.7%.

TCS reported a beat on all leading earnings parameters. The company said all verticals showed good sequential growth, led by Manufacturing (up 7.1%), BFSI (up 2%), Life Sciences and Healthcare (up 5.2%), Communications & Media (up 5.5%) and Retail & CPG (up 3.1%).

The company also announced a dividend of Rs 6 per share. Record date for the same is January 16.

TCS share price has opened the day up by 2%.

To know more, you can read TCS' Q3FY21 result analysis on our website.

Speaking of stocks, in his latest video, Rahul Shah discusses how to alternate between a deep value portfolio and investment in gold and earn great returns.

In the video, Rahul discusses how to combine the two in a smart way and benefit from the individual strengths of each asset class.

How good is the result of this combination and what happens when you combine a deep value portfolio of mid and small caps with gold?

Tune in to the video to find out more:

Moving on to news from the FMCG sector, Hindustan Unilever (HUL) said it will take "suitable action" against the German maker of personal care products branded Sebamed for making scathing claims against the Indian company's mainstay soap brands Lux, Dove and Pears in a series of advertisements across mainstream and social media over the weekend.

In the ad, Sebamed claims the pH of Lux beauty soap is 10, the same as that of a Rin detergent bar - both HUL brands. Sebamed says the pH level of its product is 5.5, which is perfect for sensitive skin.

"Our products and claims are backed by strong technology and underpinning science, clinical evidence, and decades of expert and consumer-backed testing, enjoying strong brand loyalty," an HUL spokesperson said in response to an email from the Economic Times. "We will take suitable action as we deem fit."

People aware of the company's plans said HUL is likely to file a legal case on Monday.

For HUL, India's biggest FMCG company, the soap business accounts for roughly a quarter of annual sales. It is the market leader in the Rs 220 billion soap segment with a 40% share, followed by Reckitt Benckiser and Godrej Consumer Products, which each have about 12% share.

Note that last year, HUL through the Mumbai High Court, restrained Reckitt Benckiser from broadcasting an advertisement, which allegedly falsely propagated that soaps are useless for killing germs.

HUL share price has opened the day up by 1.1%.

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

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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