Sensex Ends Marginally Higher; Energy and Telecom Stocks Witness Buying

Wed, 11 Mar Closing

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Indian share markets erased most of the gains as the session progressed and ended marginally higher.

Sectoral indices ended on a mixed note with stocks in the energy sector and telecom sector witnessing buying interest, while realty stocks and metal stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood higher by 62 points and the NSE Nifty closed down by 3 points.

The BSE Mid Cap index and the BSE Small Cap index ended down by 0.9% and 0.4%, respectively.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down 0.6% and the Shanghai Composite stood lower by 0.9%. The Nikkei 225 was down 2.3%.

The rupee is trading at 73.69 against the US$.

Speaking of Indian stock markets, note that Sensex saw its biggest single day fall on Monday. In fact, this year has seen two of the biggest single day falls in the Indian stock market history.

The only time we had seen such a fall was in 2008. Back then, the BSE Sensex had fallen by more than 50% in a year.

Will we see something similar in 2020?

Is It 2008 All Over Again in the Stock Markets?

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

• Trying to predict the direction in such cases is a futile exercise.
  
  As I always say, retail investors would do well to focus on the fundamentals of individual stocks. In fact, such uncertain times gives the best opportunity to look at quality stocks.
  
  Always remember, what has changed is the price of the business but not the value.

Meanwhile, in one of the recent podcasts, we had shared a special episode from investor hour...

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, Vijay shares a very unique perspective on how to allocate assets. Don't miss that!

In news from the banking sector, shares of RBL Bank surged up to 15% in early trade today after the private lender clarified that the bank is "financially strong and well-capitalized".

In a filing to exchanges, the private lender said that "we wish to re-emphasize that RBL Bank is a fundamentally strong institution. Rumors around financial health and stability of the institution especially in social media seem to be misplaced, motivated and not based on facts."

The bank said it remains adequately capitalized with a capital adequacy ratio of 16.08% with Tier-1 at 15.02%, significantly higher than the prescribed regulatory requirement of 11.5% and 9.5%, respectively.

Note that RBL Bank's stock hit an all-time low of Rs 199 on Monday. It had fallen below its IPO price of Rs 225 per share.

RBL Bank share price ended the day up by 9%.

In other news, Yes Bank share price surged as much as 39% today after administrator Prashant Kumar on Monday said he is hopeful of the moratorium on the private sector lender being lifted by Saturday.

Note that, stock of Yes Bank has seen a sharp uptick from Friday's low of Rs 5.65, after the government-owned State Bank of India (SBI) said it will pick a 49% stake in the troubled private lender as part of a revival scheme framed by the Reserve Bank of India (RBI).

In a press release, SBI had said that Yes Bank has 2,550 million shares of Rs 2 per share. SBI will be issued 2,450 million shares at a price of Rs 10 per share for Rs 24.5 billion.

SBI also added that it shall not reduce its holding below 26% before completion of three years from the date of infusion of the capital.

Yes Bank has been put under a moratorium by the Reserve Bank till April 3, and customers are not allowed to withdraw more than Rs 50,000 from their accounts.

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. Read the article here: How the YES Bank Collapse Unfolded - 10 Points.

Moving on to news from the energy sector, shares of oil marketing companies (OMCs), including Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) slipped up to 4% today after crude oil prices rose for the second straight day.

Earlier this week on Monday, both, HPCL and BPCL had gained 13% each in the intra-day session after crude oil prices had slumped to 20-year low following an all-out oil war led by Saudi Arabia.

Oil prices, however, gave up gains after Saudi Aramco said it had been directed by the energy ministry to raise its production capacity by a million barrels per day.

Saudi Aramco Chief Executive Amin Nasser said the state-run oil giant had been asked by the Ministry of Energy to boost its production capacity to 13 million barrels per day (bpd) from 12 million bpd now.

Oil prices had climbed earlier in the day, recouping nearly half of Monday's 25% losses, on hopes spending cuts by North American producers to cope with multi-year low crude prices would lead to a drop in output.

Worries about the economic fallout from the coronavirus outbreak and its impact on energy demand continued to pressure oil prices.

Policymakers and central banks have been taking measures to bolster their economies against disruption caused by the virus outbreak, the latest being the Bank of England that unexpectedly cut interest rates by half a percent.

Speaking of gloomy economy, coronavirus fears, falling markets and crude oil prices, Ajit Dayal has written an insightful piece, sharing his views in the latest edition of The Honest Truth.

Here's a snippet from the article:

• Is the meltdown over?
  
  While the unravelling of the debt excess in the US and the developed world may have some more to play out, the question on an investor's mind in India is: Is the mayhem over and what should I do next?
  
  On the face of it, there is some interesting Upside Potential, or potential profit, if you were to buy the specific stocks now and assume, they get back to their past peak levels over, say, the next 2 to 3 years.
  
  With the help of either some jaadu mantar or some good policy.
  
  But there are some "bets" I would be very cautious about: Yes Bank, Reliance and the INR, for instance.

You can read his entire article here: The Market Gets a Viral Attack.

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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