Sensex Ends Flat; Energy and Healthcare Stocks Witness Buying

Fri, 17 Jan Closing

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Share markets in India witnessed volatile trading activity throughout the day and ended on a flat note.

Sectoral indices ended on a mixed note with stocks in the banking sector and metal sector witnessing selling pressure, while energy stocks and healthcare stocks witnessed buying interest.

At the closing bell, the BSE Sensex stood up by 13 points while the NSE Nifty closed down by 3 points.

The BSE MidCap index ended the day up by 0.5%, while the BSE SmallCap index ended the day up by 0.4%.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up 0.6% and the Shanghai Composite stood higher by 0.1%. The Nikkei 225 was up 0.5%.

The rupee was trading at 71.02 against the US$.

Speaking of the Indian economy and Indian share markets, on Tuesday, Ankit wrote to you about a recent upcoming IPO. It's a company profiting from two megatrends - digitisation and financialisation - in the Indian economy.

Have a look at the chart below. A quick comparison of assets under management (AUM) of mutual funds in India versus abroad will give you a clear idea of the huge megatrend.

Mutual Funds: Megatrend of the decade?

India's mutual fund AUM as a percentage of GDP is 11%. This is far lower than the world average of 55%.

Here's what Tanushree Banerjee wrote about it in today's edition of The 5 Minute WrapUp...

• I strongly believe, the next decade could be the decade of financialisation in India.
  
  Traditionally, Indian households have preferred to invest in physical assets like real estate but things are changing.
  
  Indians now are more open to investing in financial assets like mutual funds. Better awareness, financial education, increasing urbanisation are all driving this change.
  
  Mutual fund AUM grew 24% annually in the last 5 years. I expect India's GDP to grow at 6-7% over the next decade.

Just combine these growth rates and you can see the massive growth opportunity.

Tanushree recently also shared about one sector that is set for a big rebound in 2020 and beyond.

Tune in to find out more...

Market participants were tracking TCS share price, HCL Technologies share price, Blue Dart share price and KEI Industries share price on the back of their December quarter result announcement today.

In news from the telecom sector, market participants were also closely tracking Vodafone Idea share price and Bharti Infratel share price today.

Shares of these companies witnessed huge selling pressure today after the Supreme Court rejected a plea by the telecom operators to review its October 24 verdict that had widened the definition of adjusted gross revenue (AGR).

However, shares of Bharti Airtel witnessed buying on hopes that it would gain market share in case of further consolidation in the industry.

The plea was filed by Vodafone Idea, Bharti Airtel and Tata Teleservices. The SC judgement left the three telcos collectively facing more than Rs 1.02 lakh crore in additional licence fees, spectrum usage charges (SUC), penalties and interest.

The government has estimated VIL's dues in the AGR matter to be more than Rs 530 billion, including over Rs 280 billion in licence fee, interest and penalties and the rest on spectrum usage charges. However, the company's internal calculation pegs it at Rs 440 billion.

The Supreme Court has asked them to pay the dues by January 23, leaving them with barely a week's time.

The telcos have an option to file a curative petition with the apex court, as well as, seek an extension of the due date.

How this development pans out in the coming week remains to be seen. Meanwhile, we will keep you updated on all the news from this space.

In news from the banking sector, Yes Bank share price was also in focus today after Moody's placed the stock's rating under review.

Moody's Investors Service placed the bank's long-term foreign-currency issuer rating of B2 under review, with the direction uncertain.

The stock of the lender also witnessed selling as brokerages fear that the bank will take a hit on exposure to telecom companies as the Supreme Court rejected review petition filed by telecom companies seeking relief from the Adjusted Gross Revenue (AGR) verdict.

According to Credit Suisse, the overall telecom AGR dues amount to Rs 3.13 lakh crore, while aggregate bank exposure to telecom sector is at Rs 1.3 lakh crore. Out of which, IDFC First, Yes Bank & IndusInd's exposure is 8-12% of the net worth to Vodafone Idea.

Last month, India Ratings and Research (Ind-Ra) has downgraded Yes Bank's long-term issuer rating to 'IND A' from 'IND A+' and its short-term issuer rating to 'IND A1' from 'IND A1+'.

Earlier, Moody's Investors Service had downgraded Yes Bank's long-term foreign-currency issuer rating to B2 from Ba3.

Moody's also downgraded the long-term foreign and local currency deposit ratings of the bank to B2 from Ba3, foreign currency senior unsecured MTN programme rating to (P)B2 from (P)Ba3, and baseline credit assessment (BCA) and adjusted BCA to B3 from B1.

The private bank had last month said that the third quarter would remain subdued and there would be an improvement in the revenue in the March quarter on the back of government measures.

In a note, Yes Bank said that muted demand environment amid economic slowdown weighed on corporate earnings during the second quarter of 2019-20, with an aggregate revenue recording a contraction of 3.5% year-on-year (YoY) compared to an expansion of 3% in the preceding quarter of the financial year.

We will keep you updated on all the news for Yes Bank. Stay tuned.

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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