Biggest Intra-Day Recovery for Indian Indices, SBI Cards IPO Debut, and Top Cues in Focus Today

Mon, 16 Mar Pre-Open

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It was indeed a volatile trading day for share markets in India on Friday.

Indian stock markets paused trading for 45 minutes during the early session after both the benchmark indices Sensex and Nifty hit their lower circuit limits within 15 minutes of the opening session. This was seen the first time in 12 years that trading in Indian markets had to be halted.

The carnage didn't continue, however, as Indian indices recovered after major free-fall as trading resumed after 45-minute halt.

From there on, it was an upward rally as markets went on to witness buying interest and saw their biggest intraday recovery ever.

At the closing bell on Friday, the BSE Sensex stood higher by 1,325 points (up 4%) and the NSE Nifty closed higher by 433 points (up 4.5%).

The BSE Mid Cap index ended up by 2.1% and the BSE Small Cap index ended the day up by 1.3%.

All sectoral indices were trading in the green with telecom sector, metal sector and oil & gas sector witnessing most of the buying interest.

How We are Looking at the Ongoing Stock Market Situation...

Our bluechip stock analyst at Equitymaster, Tanushree Banerjee, believes that the ongoing market crash could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.

Here's what she has to say more on this...

• Companies across the globe, will seek to diversify geographic risks after this crisis.
  
  India could see a big spurt in new factory capacities and fresh fund inflows. This trend, can widen the moats of the strongest bluechips.
  
  I believe, it can also help multiply their profits 4 to 8 times over the next decade.
  
  The time is ripe for StockSelect subscribers to begin buying some of the safest bluechips, right now.
  
  There is safety in valuations as the market offers them at deeper and deeper bargains.

Just in case you need more proof, the profits of bluechips (BSE 200 companies) are currently at a decade low as can be seen in the chart below.

A Rebound in Profits Overdue?

Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with. She has already recommended 4 safe bluechips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Tread the Coronavirus Crisis Safely (requires subscription)

And if you are not a StockSelect subscriber, here's where you sign up.

In the video below, Tanushree has also explained how buying the above stocks at bargain prices is a once in a decade opportunity.

Note that yesterday was the biggest ever fall for the Sensex in absolute terms in last two decades...

But it wasn't only Sensex.

The BSE Smallcap index also plunged sharply and witnessed the second biggest fall in history.

Our smallcap analyst at Equitymaster, Richa Agarwal, believes this is a time to not panic and remain invested in the good quality smallcap stocks, irrespective of the volatility.

At the same time, she recommends that it is critical that one sticks to a solid risk management framework (asset allocation) and ensures enough liquidity in case the crisis prolongs.

She believes the best approach is to consider investing in stocks that are fundamentally strong and promise steady income along with strong upside in the long term.

Richa's latest webinar - Smallcap Rebound Opportunity in the Times of Coronavirus shares a list of open positions where the rebound potential is strong... And until the rebound, one can enjoy regular income from the dividend stocks with yields up to 9%.

SBI Cards IPO To List Today

In news from the IPO space, SBI Cards and Payment Services, the country's second largest credit card issuer after HDFC Bank, is going to list its equity shares on bourses today after stellar subscription seen by its IPO.

It is the first listing in the current calendar year.

The recent steep fall in the secondary market has tampered expectations of strong listing gains for the stock of SBI Cards and Payments.

As per an article in The Economic Times, SBI Cards and Payments is most likely to disappoint investors as the grey market premium has dropped to zero level, signaling a tepid listing ahead.

Here's an excerpt from the article:

• The major reason for the drop in premium is the prevailing fear in the secondary market over coronavirus pandemic and its possible impact on consumer spending. This, in turn, will hit the topline of the companies.
  
  If SBI Card lists at the premium that the unofficial market is demanding, it could pose a real challenge for IPO investors, who betted under the high networth individuals (HNI) quota with money borrowed at high interest rates. Those investors were expecting the listing to be at a 30-50% premium.

In the unofficial market for unlisted stocks, shares of the company traded in the Rs 755-775 range on Thursday compared with the IPO price of Rs 750-755.

The IPO was subscribed over 26 times. The quota reserved for non-institutional investors, which include HNIs was subscribed over 45 times.

The company had set aside 1,83,34,795 shares for this category of investors, expecting to raise Rs 13.8 billion.

We will keep you updated how this IPO sails through.

To know more the SBI Cards' IPO, the credit card industry, you can read one of Ankit's latest notes here: SBI Cards IPO: Apply or Avoid? (requires subscription).

Rising Bank Credit and Deposits

According to the latest Reserve Bank data, banks credit grew at 6.1% to Rs 101 trillion while deposits expanded by 9% to Rs 133.3 trillion in the fortnight to February 28.

In the year-ago fortnight ended March 2019, banks' advances were at Rs 95.2 trillion while deposits stood at Rs 122.3 trillion.

In the previous fortnight which ended on 14 February 2020, bank credit had grown by 6.4% to Rs 100.4 trillion, while deposits rose by 9.2% to Rs 132.4 trillion.

In January 2020, bank credit growth declined to 8.5% as against a growth of 13.5% year-ago, led by a sharp slowdown in loans to the services sector.

How this trend pans out in coming months remains to be seen. Meanwhile, we will keep you updated on all the news from this space.

From the Commodity Market...

Gold was witnessing volatility on Friday. The yellow metal witnessed selling as a selloff in global equities also hurt the precious metal.

In global markets, gold was heading for its biggest weekly loss since 2011, despite climbing to the highest in more than seven years earlier last week. This was seen as market participants went on to sell the metal to meet liquidity needs.

In global markets, spot gold fell 1.3% to US$ 1,555.42 an ounce on Friday, after a 3.6% drop in the previous session. So far, this week, gold prices are down about 7% this week after touching a seven-year high of above US$ 1,700 on Monday last week.

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?

Apart from gold, crude oil also witnessed selling pressure on Friday.

This added to the losses seen this week after the US banned travel from Europe following a declaration that the coronavirus outbreak is now a pandemic.

Note that, crude oil prices had crashed more than 30% on Monday last week. In fact, this was the worst price dip since the 1991 Gulf War as Brent prices plunged to US$ 31 per barrel.

In a recent article, we have written the entire timeline showing economics of falling crude oil prices. You can check the same here: All About the 30% Crash in Crude Oil - 10 Points

Going ahead, market participants are expecting crude oil prices to remain low until OPEC+ resets oil production again.

Vijay Bhambwani, editor of Weekly Cash Alerts at Equitymaster, states that at this point in time, short selling natural gas & crude oil at significantly higher levels for the coming summer are high conviction trades. To know more about his view and positions, you can check out his recent article here: Energy Markets Get Muddy (requires subscription).

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

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INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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