Sensex Ends 80 Points Lower; Banking and Telecom Stocks Witness Selling

Wed, 15 Jan Closing

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India share markets continued to trade in the red during closing hours and ended their day marginally lower.

At the closing bell, the BSE Sensex stood lower by 80 points (down 0.2%) and the NSE Nifty stood down by 19 points (down 0.2%).

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

Stocks in the banking sector, energy sector and telecom sector witnessed selling pressure, while realty stocks were trading in the green.

The rupee was trading at 70.86 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 0.39% and the Shanghai Composite was down by 0.54%. The Nikkei 225 was down 0.45%.

European markets were trading on a mixed note. The FTSE 100 was up by 0.20%. The DAX was trading down by 0.06%, while the CAC 40 stood down by 0.04%.

Speaking of Indian share markets, Indian indices have witnessed a starkly polarised situation since 2018, after the uninterrupted bull rally of 2017 entered a period of correction.

While the Sensex recovered from the correction and went on to hitting new life-time highs, the broader markets - predominantly the small and midcap stocks -haven't recovered much.

Ankit Shah, the editor of daily premium newsletter Equitymaster Insider (requires subscription), has been talking about this trend since a long time. But now, he has even more elaborate data to show you how deep this trend has been.

He pulled out data on 1,638 companies listed on the NSE.

And he shares his observations in a recent edition of The 5 Minute WrapUp...

• Between 29 December 2017 and 30 December 2019, just 246 companies have witnessed gains. Together, these 246 companies added Rs 29.8 trillion worth of market capitalisation.
  
  In other words, 1,392 companies are below the levels they traded at the end of December 2017. Together, these 1,392 companies lost Rs 28.6 trillion worth of market capitalisation.
  
  So, you see the money has literally shifted from one place to another.

Even among the 246 companies that witnessed gains, the major chunk was captured by just a small list of companies.

This can be seen from the chart below...

A Very Small Group of Stocks Captured All the Gains

As you can see, the top 5 companies captured 41% of all the gains in market capitalisation over the last two years. In fact, the top 30 stocks captured more than 80% of the gains.

In short, money has been rushing to safety, into large, liquid, bluechips stocks.

This brings the question: Where can you look for such bluechip stocks?

You can consider the bluechip recommendations made by our Safe Stocks guru, Tanushree Banerjee. She has picked her top 7 stocks for 2020.

Moving on to news from the banking sector, IndusInd Bank share price was in focus today as the lender announced its December quarter results today.

The bank posted a 32% year-on-year (YoY) rise in profit at Rs 13 billion for the quarter ended December 31. The growth here was seen on the back of a healthy growth in retail and treasury revenue.

Net interest income grew 34.35% YoY to Rs 30.7 billion, with loan growth of 20%.

Slippages increased significantly to Rs 19.4 billion, from Rs 11 billion in Q2FY20. In fact, slippages were much higher than first half of FY20.

Asset quality of the bank worsened YoY as gross non-performing assets (NPA) more than doubled to Rs 45.7 billion from Rs 19.6 billion. In percentage terms, it went up to 2.18% from 1.13% a year ago. Net NPA edged higher to 1.05% to 0.59%.

Provisions for bad loans jumped as the bank kept aside Rs 10.4 billion in the December quarter this fiscal compared with Rs 6.06 billion in the same quarter a year ago. This translates into a jump of 72%.

It would be interesting to see how these numbers pan out in upcoming quarters. We'll be tracking them and keep you updated on all the news from this space.

To know more, you can read IndusInd Bank's Q3FY20 result analysis on our website.

From the IT space, Mindtree share price was also in focus today after the company reported 3% YoY rise in consolidated profit at Rs 1.97 billion for the quarter ended December 30. On a sequential basis, the profit figure was up 45.93%.

Consolidated revenue increased 9.96% YoY and 2.66% on quarter-on-quarter to Rs 19.6 billion.

Segment-wise, revenue from retail, BFSI, high technology and travel segments witnessed a rise of 1.61%, 8.17%, 15.71% and 9.91%, respectively.

The company had 320 active clients as of December 31 and it added one client each in US$ 25 million and US$ 10 million categories.

Mindtree reported total headcount at 21,561 as of December 31 with trailing 12 months attrition at 17.2%.

To know more about the company, you can read Mindtree's Q3FY20 result analysis on our website.

And 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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