Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

End of Year Sale!
Grab Our Small Cap Recommendation
Service at a 60% Discount




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Sensex Trades Marginally Lower; Dow Futures Trade Up by 71 Points
Wed, 10 Feb 12:30 pm

Share markets in India are presently trading marginally lower.

The BSE Sensex is trading down by 74 points, down 0.1% at 51,254 levels.

Meanwhile, the NSE Nifty is trading down by 12 points.

Bajaj Finserv and HDFC Life are among the top gainers today. Adani Ports and Bharti Airtel are among the top losers today.

The BSE Mid Cap index is trading up by 0.6%.

The BSE Small Cap index is trading up by 0.3%.

On the sectoral front, stocks from the real estate sector, witnessing most of the buying interest.

On the other hand, stocks from the telecom sector are witnessing most of the selling pressure.

US stock futures are trading higher today, indicating a positive opening for Wall Street.

Nasdaq Futures are trading up by 60 points (up 0.4%) while Dow Futures are trading up by 71 points (up 0.2%)

The rupee is trading at 72.84 against the US$.

Gold prices are trading up by 0.2% at Rs 48,056 per 10 grams.

Gold prices edged higher in domestic markets, reflecting positive trend in global rates. On MCX, gold futures rose 0.2% to Rs 48,046 per 10 gram in its fourth straight day of advance.

In global markets, gold inched higher, supported by a weaker US dollar and expectations that US lawmakers will soon able to approve a massive stimulus package. Spot gold rose 0.2% to US$ 1,839.9 per ounce.

To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold?

Speaking of stock markets, India's #1 trader, Vijay Bhambwani talks about whether the Indian stock market will face a taper tantrum, in his latest video for Fast Profits Daily.

In the video below, Vijay shows where you need to look for hints of a correction and why you need to be prepared for it

Tune in to find out more:

Moving on to stock specific news...

Among the buzzing stocks today is Max Financial Services.

Shares of Max Financial Services (MFSL) rose 7% to hit a record high of Rs 793 on the BSE in today's intra-day trade, in an otherwise subdued market, after reporting a strong set of numbers for the quarter ended December 2020 (Q3FY21).

The company's subsidiary Max Life Insurance registered an impressive Value of New Business (VNB) and individual adjusted sales. The stock surpassed its previous high of Rs 751.8 touched on January 21, 2021.

The company's consolidated net profit jumped 54% year-on-year (YoY) to Rs 2.2 billion on the back of a 68% YoY rise in consolidated revenues at Rs 89.9 billion, due to higher investment income.

During the quarter, MFSL's sole subsidiary Max Life demonstrated a resilient performance amid a challenging macro environment with 21% annual premium equivalent (APE) growth, led by robust growth in non-PAR savings and recovery in ULIP.

It reported a gross written premium of Rs 46.3 billion, which was up 19% over the previous year. Profit after tax (PAT) of the company also jumped 43%YoY to Rs 2.2 billion due to higher investment income and reserve release due to hedging of in-force protection business.

Absolute VNB growth stood robust (65% YoY), led by a VNB margin of 28.6%. This has been supported by robust trends in non-PAR savings and cost improvement. Strong push via the bancassurance channel has aided premium growth, while the proprietary channel is also showing a recovery.

At the time of writing, Max Financial Services share price was trading up by 4.4% on the BSE.

Speaking of smallcaps, note that since the lows in March 2020, the smallcap index has gained more than 100%.

While caution is indeed warranted, Richa Agrawal, Research Analyst at Equitymaster, thinks there is still a lot more steam left to this smallcap rally.

Despite rallying more than 100% since the March 2020 lows, Richa believes small-cap stocks are set for a massive up move in 2021 and beyond. Here's what she wrote in a recent edition of Profit Hunter...

  • The P/E for smallcap index doesn't make sense. There are thousands of listed small companies. Some have negative earnings. The base is not a valid data to work with.

    That said, the closest proxy to relative valuations is the Smallcap to Sensex ratio,

    Historically, this ratio has averaged 0.43x. In the previous mega runs of the smallcap index, this ratio has gone as high as 0.75x.

    In January 2018, when smallcaps peaked, the ratio was at 0.58x.

    Guess where this ratio is now after a 100% run up in the smallcap index?

    0.38.

    It's lower than the median over 2 decades.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

Moving on to news from the steel sector...

Tata Steel Q3FY21 Results: Revenue at Seven-Quarter High

Tata Steel's profit for the quarter ended December rose, aided by higher prices, a better product mix and initiatives to improve operating efficiency. The steelmaker reported a net profit of Rs 39.8 billion in the quarter ended December against a loss of Rs 11.6 billion in the corresponding quarter a year ago, according to its exchange filing.Revenue of the company rose to a seven-quarter high of Rs 395 billion even as domestic sales fell 4% over the preceding year as prices of hot-rolled coil steel rose. The company's top line grew 11.5% year-on-year (YoY).The company's operating profit also rose 160.7% over the preceding year to Rs 95.4 billion, the company said, as realisation rose in the steelmaker's key entities. This is the highest in at least nine quarters.The company's merger with Bhushan Steel is progressing and following the termination of the discussions with SSAB on Tata Steel Netherlands, the company will focus on performance and cash flows in the immediate term.

It has also reduced its net debt by Rs 186 billion and gross debt by Rs 76.5 billion for the nine months through December 2020. It will also further pare gross debt by more than Rs 120 billion in the fourth quarter of the ongoing fiscal.

We will keep you posted for more updates from this space. Stay tuned.

And 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!

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Sensex Trades Marginally Lower; Dow Futures Trade Up by 71 Points". Click here!