December Quarter Results, LIC IPO Updates, and Top Cues in Focus Today

Wed, 5 Feb Pre-Open

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On Tuesday, Indian share markets traded on a positive note throughout the day, tracking global cues. Benchmark indices extended gains as the session progressed, to erase all the Budget day losses.

Investor sentiments got a boost from the manufacturing sector rising to an eight-year high in January. The widely-tracked IHS Markit India Manufacturing purchasing managers' index (PMI) rose from 52.7 in December to 55.3 in January, its highest level in just under eight years.

The BSE Sensex closed higher by 917 points to end the day at 40,789. Titan and ITC were among the top gainers.

While the broader NSE Nifty ended up by 272 points to end at 11,980.

Among BSE sectoral indices, metal stocks gained the most, followed by consumer durable stocks and banking stocks.

Top Stocks in Action Today

TCS share price will be in focus today as the company has bagged a US$ 1.5 billion contract from pharma company Walgreens Boots Alliance, spread over a period of 10 years.

Under the contract, TCS will provide managed services including application maintenance and support, required infrastructure and security operations.

Zee Entertainment (ZEE) share price will also be in focus today as the Ministry of Corporate Affairs (MCA) has ordered an inspection of the financials of the company.

Market participants will also track Bosch share price, Cipla share price, and DLF share price as these companies will announce their December quarter (Q3FY20) results later today.

You can also read our recently released Q3FY20 results of ITC, Power Grid, Amara Raja Batteries, Vedanta, SBI, HUL, Dabur.

Results Corner

GSK Pharma has reported a consolidated net loss of Rs 6.6 billion for the December 2019 quarter. The drug firm had posted a net profit of Rs 1.1 billion in the year-ago quarter.

The company's consolidated profit before exceptional items and tax declined 15.5% year on year (YoY) to Rs 1.2 billion against Rs 1.4 billion in the corresponding period of the previous financial year.

Operational revenues were down 5.6% to Rs 7.8 billion from Rs 8.3 billion in the previous year quarter.

Punjab National Bank (PNB) has reported standalone loss of Rs 4,922.8 million for the December quarter compared with a profit of Rs 2,465.1 million in the same period last year.

The PSU bank said provisions for the quarter jumped 73.3% year-on-year to Rs 44.5 billion from Rs 25.7 billion.

The bank's gross non-performing assets (GNPAs) eased to 16.3% in December quarter from 16.33% in the year-ago quarter, and 16.76% in September quarter.

LIC IPO Updates

In news from the IPO space, the employees' union of Life Insurance Corporation (LIC) will be staging an hour-long walk-out strike to protest against the government's move to sell its stake in the state-run insurer through an initial public offering (IPO). The walk-out will take place at all offices of the insurance behemoth across the country.

As per the union, listing of LIC is against national interest as over the years it has been playing a pivotal role in nation building activities. On a capital base of Rs 50 million, the union said LIC's valuation surplus was Rs 532.1 billion, life fund stood at Rs 28.28 lakh crore and asset under management over Rs 31.11 lakh crore at the end of FY19.

The move comes as Finance Minister Nirmala Sitharaman in the Union Budget announced that the government, which holds 100% stake in LIC, will sell a part of its holding through an IPO. The same is planned to achieve the government's record asset-sale target which could fetch the government between 850 billion to 900 billion rupees if it gets done this year.

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

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

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).

Global Stock Market Drivers

Global stock markets bounced on Tuesday, with Chinese stocks reversing some of a previous coronavirus-related plunge amid official efforts to soothe nerves over the spreading outbreak.

China's markets steadied in choppy trade after anxiety over the virus erased some US$ 400 billion in market value from Shanghai's benchmark index on Monday as markets resumed following the Lunar New Year holiday.

The Shanghai Composite closed up 1.3%, while the blue-chip CSI300 rebounded 2.6% after a near 8% slide on Monday. Hong Kong's Hang Seng advanced 1.2%.

Meanwhile, crude oil prices rebounded on Tuesday, rising as much as 1% after the previous session's slump, amid hopes for new output curbs from OPEC and its allies to offset any drop in fuel demand that might be triggered by China's coronavirus outbreak.

People familiar with the matter told Reuters on Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, were considering cutting crude output by a further 500,000 barrels per day (bpd) due to the impact on demand from the coronavirus.

As per the economic schedule released by Vijay Bhambwani, editor of Weekly Cash Alerts, here are the important events due later today:

• India - Services PMI January
• US - Crude Inventory
• Russia - Services PMI January

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

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