Sensex Opens Flat; Energy and Telecom Stocks Gain

Wed, 5 Feb 09:30 am

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Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 1.6% while the Hang Seng is up 0.6%. The Nikkei 225 is trading up by 1.2%. Meanwhile, the Nasdaq hit a record high on Tuesday and the S&P 500 posted its biggest one-day gain in about six months as fears of a heavy economic impact from the coronavirus outbreak waned after China's central bank intervened.

Back home, India share markets opened on a flat note. The BSE Sensex is trading up by 40 points while the NSE Nifty is trading up by 16 points. The BSE Mid Cap index opened up by 0.4% while BSE Small Cap index opened up by 0.2%.

Sectoral indices have opened the day on a mixed note with oil & gas stocks and telecom stocks witnessing buying interest. IT stocks and metal stocks are trading in the red.

The rupee is currently trading at 71.20 against the US$.

Automobiles stocks opened the day on a mixed note with Eicher Motors and Tata Motors DVR leading the gainers. Two-wheeler manufacturer Bajaj Auto posted 22% decline in its domestic two-wheeler sales in January.

Bajaj Auto dispatched 157,796 units of two-wheelers in January in the domestic market, against 203,358 units in the same month a year ago.

Total two-wheeler sales, including exports, declined 5% to 332,342 units. Two-wheeler exports jumped 19% in the reporting month.

Bajaj Auto's total exports, comprising two-wheeler and commercial vehicles, increased 15% to 201,601 units in January.

Domestic commercial vehicle sales jumped 25% to 35,076 units, but exports declined 5% to 27,055 units.

Bajaj Auto share price opened the day up by 1%.

Speaking of the automobile sector, note that India's automobile industry is bracing itself for a unique challenge in the first quarter of 2020 when the transition of BS-IV to BS-VI emission norms has to be made at the stroke of midnight on 31 March 2020.

No BS-IV vehicle could be sold from 1 April 2020, which means automakers would have to reduce their inventory on BS-IV models to zero by then.

The exercise is likely to see companies show extra caution in dispatching cars to dealers in the next few months, which may cause a continuation of the decline in wholesale numbers.

This year will be a real test for India's auto companies.

It will also tell us if this slowdown is temporary or if there has been a structural change in the sector.

In our view, companies in the sector adapting their business models to the rapidly changing environment will survive and thrive.

We will keep you updated on all the trends shaping up in this space. Stay tuned.

Moving on to the news from banking sector. Punjab National Bank (PNB) reported results for third quarter ended December 2019.

The bank reported a net loss of Rs 4.9 billion for the quarter under review as compared to net profit of Rs 2.5 billion for the same quarter in the previous year.

However, total income of the bank increased by 7.5% at Rs 159.7 billion for Q3FY20 as compared Rs 148.5 billion for the corresponding quarter previous year.

On the consolidated basis, the bank reported a net loss of Rs 5 billion for the quarter under review as compared to net profit of Rs 2.5 billion for the same quarter in the previous year.

However, total income of the bank increased by 7.3% at Rs 162.1 billion for Q3FY20 as compared Rs 151 billion for the corresponding quarter previous year.

Punjab National Bank share price opened the day up by 0.4%.

Speaking of banking sector, 2019 has been brutal for some banking stocks.

The market has severely punished them. This is due to issues such as worsening asset-quality, corporate governance, and inadequate capital.

Stocks such as Yes Bank and Lakshmi Vilas Bank are down more than 70%.

Falling Knives in the Banking Sector

Falling stock prices could be enticing. After all, we love deep discounts and good bargains.

But if you're thinking of buying these stocks it's important to remember this point - If a stock is in a falling spree, there's probably a good reason behind it.

And realising this in a falling market is the first step towards correcting one's investing process.

In the video below, co-head of research, Rahul Shah shares a tip that he believes will hold good not just in 2020 but well beyond.

Watch now...

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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