Indian Indices Witness Huge Selling; Sensex Ends 458 Points Lower

Mon, 27 Jan Closing

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After opening on a negative note in the morning trade today, India share markets witnessed further selling and ended their session deep in the red.

At the closing bell, the BSE Sensex stood lower by 458 points (down 1.1%) and the NSE Nifty stood down by 129 points (down 1.1%).

The BSE Mid Cap index ended the day down 0.4%, while the BSE Small Cap index stood flat.

Stocks in the metal sector and telecom sector witnessed huge selling pressure, while healthcare stocks were trading in the green.

The rupee was trading at 71.47 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up by 0.15% and the Shanghai Composite was down by 2.75%. The Nikkei 225 was down 2.03%.

European markets were trading on a negative note. The FTSE 100 was down by 2.18%. The DAX was trading down by 1.88%, while the CAC 40 stood down 1.96%.

Speaking of Indian share markets, Rahul Shah in his latest video outlines the action you can take now if the Sensex 40,000 bull market by passed you.

Tune in to find out more...

From the banking sector, ICICI Bank share price was also in focus today as the lender posted 158.3% YoY rise in standalone profit at Rs 41.4 billion for the quarter ended December 31. The profit figure stood at Rs 16 billion for the same period last year.

The bank set aside Rs 20.8 billion towards provisions and contingencies, down 51% YoY.

Recoveries, upgrades and other deletions, excluding write-offs, for the quarter stood at Rs 40.8 billion during the quarter.

Net interest income (NII) rose 24% YoY to Rs 85.4 billion. Fee income rose 17% to Rs 35.9 billion. Retail fees constituted 77% of total fee income, while treasury income grew 11% YoY.

Non-interest income, excluding treasury income, stood at Rs 40.4 billion.

Net interest margin (NIM) came in at 3.77% against 3.64% in September quarter and 3.40% in the year-ago quarter.Gross NPA for the quarter fell to 5.95% from 6.37% in September quarter and 7.75% in the same quarter last year.

To know more about the company, you can read ICICI Bank's latest result analysis on our website.

In news from the pharma sector, Dr Reddy's Laboratories share price was in focus today as the company posted Rs 5.6 billion loss in Q3 December 2019 on impairment of generic Nuvaring drug.

On a consolidated basis, the drug major recorded net loss of Rs 5.69 billion in the December 2019 quarter compared with net profit of Rs 4.85 billion in the same quarter last year.

Consolidated revenues rose 14% year-on-year (YoY) to 43.8 billion during the quarter and EBITDA rose 24% YoY to Rs 10.7 billion. EBITDA margin stood at 24.5% in Q3 December 2019, higher than 22.5% in Q3 December 2018.

The company reported pre-tax loss of Rs 5.2 billion in Q3 December 2019 compared with pre-tax profit of Rs 5.8 billion in Q3 December 2018. This was seen primarily on account of impairment of intangible assets.

Excluding impairment, profit before tax stood at Rs 7.9 billion in Q3 December 2019.

In December 2019, there has been a generic launch and an authorized generic launch for the product "Nuvaring", which has led to a considerable erosion in the value of this product for the company, and accordingly the firm took an impairment charge of Rs 11.1 billion (US$ 156.5 million).

In addition to this, considering the current market dynamics, the firm took an impairment charge of Rs 2.1 billion on the intangibles pertaining to other products. In total, the company took an impairment of Rs 13.2 billion on the intangible assets for this quarter.

Commenting on the results, co-chairman and MD, GV Prasad said that the current quarter performance has been good across all the businesses and the company achieved strong EBITDA margins. The profits were impacted due to trigger based impairment charge taken on a few products including Nuvaring. Going forward, the company will continue to focus on execution and have made significant progress on quality systems and operational efficiencies.

Moving on to the news from the IPO space, the initial public offer (IPO) by IT consulting services firm Tranway Technologies kicked off today.

The company intends to raise Rs 42 million by offering 42,40,000 fresh shares with a face value of Rs 10 each. The scrip will be issued at Rs 10 per share.

Tranway Technologies is a provider of IT consulting services and emerging technology solutions. Besides, the company provides product development & support and IT & non-IT staffing solutions to enterprises.

How this IPO sails through remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Speaking of IPOs, in one of the editions of The 5 Minute WrapUp, Ankit Shah shared how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of 2019 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?

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?

It would be interesting to see how this trend pans out in coming months of 2020.

Ankit keeps a tab on all the IPOs at his premium newsletter Equitymaster Insider (requires subscription).

He's closely watching IPOs in 2020 and is going to pick all the profitable ones for his readers at Equitymaster Insider. In one of his recent articles, he has explained why keeping a tab on the IPO market is vital to your overall investing goals. You can read it here: What I Learnt from IPOs in 2019 (requires subscription).

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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