Indian Indices Trade on a Volatile Note; Metal and Energy Stocks Witness Buying

Tue, 17 Mar 12:30 pm

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Share markets in India are presently trading marginally higher.

While Indian share markets opened on a negative note today, losses were recovered thereafter as indices rose sharply over 500 points. The gains were again wiped out amid panic selling as coronavirus fears mounted and presently the benchmark indices are trading near the dotted line.

Sectoral indices are trading on a positive note with stocks in the metal sector, energy sector and auto sector witnessing most of the buying interest.

The BSE Sensex is trading up by 105 points (up 0.4%), while the NSE Nifty is trading up by 35 points (up 0.3%).

The BSE Mid Cap index and the BSE Small Cap index are trading up by 0.7% and 0.1%, respectively.

The rupee is trading at Rs 74.01 against the US$.

Speaking of the 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 of what he wrote:

• 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.

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.

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.

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.

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%.

In news from the commodity space, gold is witnessing selling pressure today.

The yellow metal extended its fall as prices fell nearly 1.5% on Tuesday. Losses were seen as market participants continued to sell asset amid heightened panic over the coronavirus pandemic.

In the global markets, spot gold slipped towards US$ 1,511.30 per ounce, having slumped as much as 5.1% on Monday to its lowest since November.

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

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?

Moving on to news from the banking sector, Yes Bank share price is in focus today as the stock of the lender climbed more than 60% in today's trade after rating agency Moody's upgraded the private lender's outlook to positive (from negative) while also upgrading its rating by a notch.

Moody's said that the upgrade of YES Bank's long-term issuer rating to Caa1 from Caa3, placing it at the same level as its long-term deposit ratings, takes into account the bailout of the bank's depositors and senior creditors under the YES Bank Reconstruction Scheme.

Note that seven banks led by State Bank of India (SBI) have invested Rs 100 billion, boosting its core capital. The troubled bank will restart full-fledged banking services from tomorrow 6 pm onwards.

Yesterday, in the RBI press conference, the RBI Governor Shaktikanta Das said if needed, the central bank would give additional liquidity support to the crippled lender.

The central bank had superseded Yes Bank board on March 5 and placed it under an administrator.

Das said the moratorium on Yes Bank will be lifted on March 18 at 6 pm and new board will assume position on March 26 and administrator will vacate office.

He assured depositors their money is completely safe and there is no need for worry saying that in the history of Indian banking, depositors of SCBs have never lost money.

It was announced that depositors can withdraw their money after 6pm on March 18.

Das also added that interactions with the banks investing in Yes Bank gives the RBI committee confidence that the revival plan will work out.

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. You can read the entire article here: How the YES Bank Collapse Unfolded - 10 Points.

Speaking of the banking sector, the low access to credit for micro small and medium enterprises (MSMEs) tells us there is a huge opportunity for lenders.

This is evident from the chart below:

India's Huge Lending Opportunity

Of the 60 million MSMEs in India, only 11% had access to credit from organised lenders. Most of them are self-financed or get credit from unorganised sources.

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

• Self-financing limits the growth of these MSMEs. On the other hand, high interest rates from unorganised sources makes it difficult for them to earn profits.
  
  The Modi government is looking at various ways to correct this problem. Mudra loans, online loans facilities are being made available to MSMEs.
  
  Slowly but surely, lenders are sensing the huge opportunity that lies ahead for this sector.
  
  Banks and other financial firms with prudent lending practices and strong distribution networks will benefit from this megatrend.

Tanushree is counting on 7 top stocks from the Indian stock market that will benefit from this megatrend.

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.

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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