Indian Indices Recover from Day's Low; Rupee Hits 75-Mark for the First Time

Thu, 19 Mar 12:30 pm

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Share markets in India are presently trading on a volatile note. While Indian share markets opened deep in the red today, benchmark indices clawed off the day's lows, lifted by public sector banks, but are still trading 3% lower.

Indices plunged to multi-year lows in opening trade today, with the BSE Sensex falling over 2,150 points. The broader NSE Nifty breached the 7,900-level for the first time since December 2016, plunging over 600 points.

Barring telecom sector, all sectoral indices are trading on a negative note with stocks in the auto sector, energy sector and realty sector witnessing most of the selling pressure.

The BSE Sensex is trading down by 929 points (down 3.1%), while the NSE Nifty is trading down by 281 points (down 3.3%).

The BSE Mid Cap index and the BSE Small Cap index are trading down by 3.2% and 4.6%, respectively.

Here's what Richa Agarwal, our smallcap analyst at Equitymaster, has to say about the ongoing market crash and what it means for stock market participants...

• ...at a time when you see the Sensex and large cap stocks taking big knocks, you will be completely surprised at another feature of the market.
  
  It has flown under the radar for most investors so far...
  
  Small cap stocks, which were already cheap and attractive, have now become downright ridiculously priced!
  
  Many of them offer massive gains to those who will buy at current prices.
  
  And I'm not even talking about the weak companies...
  
  I'm talking about strong companies with ultra-strong balance sheets. Businesses strong enough to weather the oncoming coronavirus storm - whatever it throws at them.
  
  Looks like the perfect time for the opportunistic investor to pick up some good bargains!

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

She has identified one such stock that has the potential to return crores in the long term. To know more, click here for all the details.

Also, 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 currencies space, the rupee is currently trading at 75.07 against the US$.

The rupee opened 73 paise down at 74.96 against the US$ today, amid sustained foreign fund outflows and heavy selling in domestic equities.

The domestic currency hit a fresh record low of 75.01 against the dollar, tracking slump in equities and currencies globally. Investors were concerned that support measures from governments and central banks may be insufficient to halt the economic damage caused by the coronavirus pandemic.

A sharp rise in coronavirus cases further dampened the sentiment.

On Wednesday, the domestic currency had settled 2 paise lower at 74.26 against the greenback.

Foreign portfolio investors (FPIs) have withdrawn nearly Rs 700 billion on a net basis from the Indian markets in March so far as the coronavirus pandemic triggered fears of a global recession.

Data available showed that, investors pulled out a net sum of over Rs 362 billion from equities and Rs 320 billion from the debt segment so far this month.

Amid the gloomy economy and coronavirus fears, what's next for the Indian stock markets?

You have the answer to this!

Participate in Equitymaster's "State of the Markets" poll and make your opinion count.

60 seconds is all that this anonymous poll will take.

Participate here: Equitymaster's "State of the Markets" Poll

Moving on to news from the banking sector, IndusInd Bank share price is in focus today.

As per a leading financial daily, IndusInd Bank's deposit base has eroded by nearly 2% as some state governments shifted deposits from the private lender.

Shares of IndusInd Bank crashed around 30% yesterday on the back of rumors surrounding its financial health.

The bank has, however, provided an assurance that it has strong financials and healthy governance.

The bank in a press release said that in wake of the significantly higher level of market rumours and speculation around IndusInd Bank stock, we would like to reiterate that the Bank is financially strong, well-capitalized, profitable, and a growing entity with strong governance.

The bank also sought to allay fears with regard to its asset quality and said that last quarter, the bank's gross NPA at 2.18% was the 2nd lowest in the industry amongst large private sector Banks. It further added that it expects current quarter Gross NPA to be pretty much in line with that of last quarter.

Despite the bank's assurance, investors are still jittery as the private lender's stock plunged more than 10% today.

In other news, Yes Bank share price is also in focus today as Madhu Kapur on Wednesday sold nearly 25 million shares at Rs 65 apiece.

Prior to the sale, Kapur, the wife of co-founder late Ashok Kapur, held 176 million shares in the bank.

Three-fourth of this holding has been locked in for three years as part of the restructuring plan for the bank.

Shares of Yes Bank fell over 25% to hit a low of Rs 45.15, on back of the above news.

As per the BSE filing, the shares have been pledged with HSBC Investdirect Financial Services India on March 6, 2020, just one day after the Reserve Bank of India (RBI) superseded its board and brought the bank under a moratorium, which was lifted yesterday evening.

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.

We will keep you updated on the latest developments from this space. Stay tuned.

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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