Sensex Slips 200 Points; Banking Stocks Decline

Fri, 7 Feb 12:30 pm

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Share markets in India are presently trading on a negative note. Benchmark indices edged lower today, taking cues from their Asian peers that slipped in trade amid rising death toll and economic damage from the coronavirus outbreak.

Sectoral indices are trading mixed with stocks in the automobile sector and energy sector witnessing selling pressure, while healthcare stocks and IT stocks are witnessing buying interest.

The BSE Sensex is trading down by 222 points while the NSE Nifty is trading down by 61 points.

The BSE MidCap index is trading up by 0.1% and the BSE SmallCap index is trading up by 0.3%.

The rupee is trading at 71.24 against the US$.

Market participants are tracking Tata Steel share price, Symphony share price, and ACC share price as these companies will announce their December quarter results later today.

In news from the pharma sector, shares of Aurobindo Pharma surged over 7% today after the company's operational revenues witnessed a strong growth of 11.9% year-on-year (YoY) at Rs 59 billion in December quarter (Q3FY20).

US revenue for Q3FY20 witnessed a growth of 22% YoY to Rs 29.7 billion, accounting for 50.4% of consolidated revenue.

The company's consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) margin remained stable at 20.5% in Q3FY20. EBITDA grew 11.2% YoY at Rs 12.1 billion.

However, profit after tax (PAT) declined 1% YoY to Rs 7.1 billion, due to higher depreciation.

The company said it has received final approval for 4 abbreviated new drug application (ANDAs) and tentative approval for 1 ANDA from US Food and Drug Administration (USFDA).

The company also declared an interim dividend of Rs 1.75 per equity share.

Aurobindo Pharma share price is presently trading up by 7.7%.

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

Speaking of pharma sector, in the video below, Tanushree tells us where the sector stands now and also about the potential for a rebound.

Watch Now...

Moving on to news from the realty sector, the Reserve Bank of India (RBI) has allowed all banks and lenders to defer the classification of troubled builder loans as bad for one year, giving the real estate industry more time to restructure them.

Yesterday, RBI governor Shaktikanta Das announced that loans for projects delayed for reasons beyond the control of promoters will be treated as standard loans.

As per reports, the above measure is expected to boost the real estate sector struggling with high inventory, poor prices and incomplete projects. It is also expected to help banks and other lenders to work with the management and promoters to restructure loans.

The RBI statement on the commercial real estate sector was issued along with the bank's sixth bi-monthly monetary policy statement of fiscal 2019-20 of the Monetary Policy Committee. The central bank decided to keep its lending rates unchanged at 5.15%.

Last month, the National Company Law Tribunal ruled that a real-estate developer could not be charged with committing a 'default' under the Insolvency & Bankruptcy Code (IBC) when the possession of a premise is delayed for reasons beyond its control.

The Indian real estate industry has seen a prolong slump for the last four years with several developers struggling with piling debt and slow pace in housing demand.

Last year in November, the government announced plans to set up a Rs 250-billion alternative investment fund (AIF) to provide funds to developers whose projects are more than 60% complete but are stuck for want of money.

Speaking of the real estate sector, note that this is one sector that has tested investor patience over the years. While the sector has seen big moves in the last few years, the downward movement has been equally sharp.

The post demonetisation era has been tough on the sector. Excess inventory, i.e. housing projects stuck for years, has meant homeowners have largely stayed away from any fresh buying in the real estate space.

Also, post the IL&FS crisis, lending to real estate developers has largely dried up. The BSE Realty Index also reflects the same. It was down 31% in 2018.

But is the scenario about to change?

Real Estate - The Sector to Bet on After the Budget?

Here's what Tanushree Banerjee wrote about this in a recent edition of The 5 Minute WrapUp...

• Demonetisation, RERA, and the IL&FS crisis have hit the sector hard.
  
  The BSE Realty Index has had a tough time in the last few years.
  
  But there are signs of a turnaround. The government's Rs 250 billion package was a much need boost for the sector and homebuyers.
  
  A real estate revival is important for the steel, cement, and many other sectors. It is also an important job creator for India's young population.

What would be more interesting is the pickup in consumption once the real estate sector revives.

Once people get their homes, they are likely to spend on tiles, paints, furniture, electronics, pipes, cables, cement, and many other things.

Watch this space for more!

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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