Sensex Crashes Over 930 Points from Day's High; Metal and Oil & Gas Stocks Witness Huge Selling

Mon, 2 Mar Closing

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It was mayhem on Dalal Street today. India share markets tumbled for the seventh straight session as global sell-off weighed on the benchmark indices amid rising concern over fresh coronavirus cases.

The BSE Sensex closed 939 points lower from its day's high of 39,083, while the Nifty fell 300 points from its day's high level of 11,433.

At the closing bell, the BSE Sensex stood lower by 153 points (down 0.4%) and the NSE Nifty stood down by 69 points (down 0.6%).

The BSE Mid Cap index ended the day down 0.7%, while the BSE Small Cap index stood down by 0.8%.

All sectoral indices ended in the red with stocks in the oil & gas sector and metal sector leading the losses.

The rupee was trading at 72.43 against the US$.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was down by 0.62% and the Shanghai Composite was up by 3.15%. The Nikkei 225 was up 0.95%.

European markets were trading on a mixed note. The FTSE 100 was up by 0.88%. The DAX was trading up by 0.05%, while the CAC 40 stood down 0.05%.

Note that Indian stock market fell for the seventh consecutive day in a row today tracking weak global cues.

In Friday's podcast, we had shared a special episode from investor hour...

There's blood on the streets...

In this emergency episode of the Investor Hour, Rahul Goel talks to Vijay Bhambwani, who he calls India's #1 trader.

Vijay dives deep in this "coronavirus" situation and presents a picture which we believe would be extremely beneficial to any investor or trader.

They talk stocks, commodities, bullion and currency.

For each of these assets, they talk what's around the corner, and how one should position oneself for potential gains.

Whatever you do, don't miss this emergency issue of the Investor Hour!

Listen in here...

Towards the end of this podcast, Vijay shares a very unique perspective on how to allocate assets. Don't miss that!

Also, speaking of Indian stock markets, in his latest video, Rahul Shah shares a proven strategy that can give big returns in quick time.

Tune in to find out more about this market beating strategy...

Meanwhile, Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from what she calls the Rebirth of India.

As per her, now is the right time to buy these stocks to profit from the Rebirth of India. You can read about them here.

In news from the IPO space, the mega IPO by SBI Cards and Payment Services (SBI) was subscribed 35% till 4 pm on the first day of the bidding process today.

As per the data, by 4 pm, the issue received bids for 3,48,38,571 shares compared with the issue size of 10,02,79,411 shares, representing 35% of the issue. The company has already raised Rs 27.7 billion from 74 anchor investors, including 12 mutual funds.

The price band for the share sale, which would be open from March 2 to 5, has been fixed at Rs 750-755 apiece.

Incorporated in 1998, SBI Cards is the second-largest credit card issuer in India, with an 18% market share of the credit cards market in terms of the number of cards outstanding.

SBI holds 76% in SBI Cards and the rest of the stake is held by Carlyle Group.

HDFC Bank has the largest credit cards business in the country with 13.3 million cards issued, while ICICI Bank stood third with 7.9 million credit cards, according to data from the Reserve Bank of India.

SBI Card's total credit card spends grew at a compounded annual growth rate of 54.2% over FY17-FY19 compared with an industry average of 35.6%.

To know more the SBI Cards' business, the credit card industry, and whether you should apply to this IPO, you can read one of Ankit's latest note here: SBI Cards IPO: Apply or Avoid? (requires subscription)

Meanwhile, we will keep you updated on all the news regarding this IPO. Stay tuned.

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 the year 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.

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 categ.ory, 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 2020.

Ankit is 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)

Moving on to news from the commodity space, gold prices continued their rally seen last week and went on to trade on a positive note today.

Prices for yellow metal jumped by Rs 391 to Rs 42,616 per 10 gram in domestic market today following positive global trend. Gains were also seen as market participants continued buying safe-haven assets avoiding riskier equities amid rising fears of coronavirus becoming a pandemic.

In the global markets, too, gold prices remained elevated as worries intensified that the rapidly spreading coronavirus could turn into a pandemic and derail global economic growth. International gold prices rose more than 1% on the back of above worries.

The rout was also deepened with investors rattled by weekend data from China that showed its fastest ever contraction in factory activity raising fears of a global recession from the coronavirus.

As per the news, the number of new infections inside China - the source of the outbreak - was for the first time overtaken by fresh cases elsewhere last week, with Italy and Iran emerging as epicentres of the rapidly spreading illness.

Note that 2019 proved pretty good for gold, as gold surged amid fears of a possible slowdown in global growth and uncertainty surrounding geopolitical crisis in West Asia and Britain's divorce from the European Union.

The same uptrend is also seen in 2020 so far.

Gold prices are seen rising as the rapid spread of coronavirus cases outside of China and its potential negative impact on the global economy are prompting investors to take refuge in safe haven assets like gold.

Increase in the number of new coronavirus cases outside China over the past few days have bolstered the safe haven appeal of gold. South Korea, Italy and Iran have logged sharp increases in infections and deaths, while several countries in the Middle East reported their first cases of coronavirus.

The international spot gold prices have rallied to seven-year highs while India's domestic gold prices rallied to all-time highs.

Speaking of gold, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

HYPERLINK "https://www.equitymaster.com/5minWrapUp/charts/index.asp?date=11/18/2019&story=1&title=11182019-Gold-Has-Been-a-Shining-Long-Term-Investment&utm_source=TM&utm_medium=website&utm_campaign=MCOM&utm_content=market-commentary" https://www.equitymaster.com/5minWrapUp/charts/index.asp?date=11/18/2019&story=1&title=11182019-Gold-Has-Been-a-Shining-Long-Term-Investment&utm_source=TM&utm_medium=website&utm_campaign=MCOM&utm_content=market-commentary <>

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

Here's what Ankit Shah wrote about this in one of the editions of The 5 Minute WrapUp...

• In fact, gold has delivered double-digit gains in 10 of the last 15 years.
  
  During the entire 15-year period, gold has shot up 555% (compounded annual return of 12.1%).
  
  During the same period, the Sensex surged 511% (compounded annual return of 12.0%). If you include dividends, the Sensex returns would be higher than gold by a couple of percentage points.
  
  One must note that the Sensex returns are not representative of the broader market returns. Moreover, gold was a no-brainer. You didn't have to study financial statements, business models and forecast future earnings growth to get a double-digit return on your investment.

Meanwhile, in one of his latest videos, Vijay Bhambwani shares his view on gold and silver prices. He talks about how the bullion prices will move in the short term.

You can check the same here: Will Gold and Silver Prices Fall because of the Coronavirus?

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!

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