Sensex Ends FY19 with 17% Gains; Metal and Healthcare Stocks Witness Buying

Fri, 29 Mar Closing

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Indian share markets continued their momentum throughout the day and ended marginally higher. Gains were largely seen in the metal sector, healthcare sector and automobile sector.

At the closing bell, the BSE Sensex stood higher by 127 points (up 0.3%) and the NSE Nifty closed higher by 54 points (up 0.5%). The BSE Mid Cap index ended the day up 1% and the BSE Small Cap index, ended the day up by 0.7%.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 1% and the Shanghai Composite was up by 3.2%. The Nikkei 225 was up 0.8%.

European markets were trading on a positive note. The FTSE 100 was up by 0.6%. The DAX was up by 0.4% while the CAC 40 was up by 0.5%.

The rupee was trading at 69.17 to the US$ at the time of writing.

In the news from the IPO space, state-owned e-commerce firm MSTC's shares made debut at a discount to the issue price today.

The stock of the company opened at Rs 115 on the NSE, 4% lower than the issue price of Rs 120. On the BSE, it started the trade at Rs 111, a discount of 7.5%.

Incorporated in 1964, Kolkata based MSTC Limited is a PSU involved in the business trading of bulk-raw material and e-commerce service provider to government and government controlled entities.

It was a canalizing agency for import of ferrous scrap until 1992 and established itself one of the leading e-commerce service providers in the country after de-canalization.

The company has also entered into the recycling business through a 50:50 joint venture with Mahindra Intertrade Limited (MIL) for setting up a shredding plant and collection centers across the country.

The three main business verticals of MSTC are (i) E-commerce, (ii) Trading, and (iii) Recycling.

Speaking of IPOs, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

In the news from the commodities space, crude oil was witnessing buying interest today. Gains were seen on the back of ongoing supply cuts led by producer club Organization of the Petroleum Exporting Countries (OPEC) and US sanctions against Iran and Venezuela.

The gains came as a welcome breather after the selling pressure seen for crude oil yesterday after data showed a surprising increase in US stocks.

Note that the US-China trade deal, the OPEC cuts, and the US sanctions on Iran and Venezuela are continuing to dominate crude oil headlines.

Crude oil prices were near 2019 highs last week, supported by supply cuts led by producer club OPEC. Reportedly, US sanctions against oil producers Iran and Venezuela are boosting prices.

Last week, the OPEC scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until at least June, when the next meeting is scheduled.

The OPEC and non-affiliated allies like Russia - known as the OPEC+ alliance - have been withholding around 1.2 million barrels per day (bpd) in crude supply from the start of the year to tighten markets and prop up prices.

US crude oil output has soared by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making America the world's biggest producer ahead of Russia and Saudi Arabia.

On the demand-side, there is concern that an economic slowdown as well as improving energy efficiency and the emergence of alternative transport fuels will erode oil consumption.

Moving on to the news from the banking space, Punjab National Bank share price was in focus today after it was reported that the lender has entered into agreements for sale of 1,08,91,733 equity shares held in PNB Housing Finance (PNBHF) to General Atlantic Group at a per share price of Rs 850 aggregating to Rs 9.3 billion.

The lender will also sell 1,08,91,733 equity shares held in PNBHF to VardePartners at a per share price of Rs 850 aggregating to Rs 9.3 billion.

Meanwhile, PNB would continue to hold strategic stake of 19.78% of the paid-up capital of PNBHF.

Speaking of public sector banks and PSU companies in general, it's election time and PSU stocks are back in vogue.

The last election saw a short-term outperformance of the PSU Index compared to the Sensex.

Will history repeat itself? Have a look at the chart below to see how PSUs have performed the overall markets in the long run:

PSU Stocks - Perpetual Value Traps?

Here's what Tanushree Banerjee, Co-head of research at Equitymaster, wrote about it in one of the recent edition of The 5 Minute WrapUp...

• What we have seen from history, is that PSUs have underperformed the overall markets in the long run.
  
  Non-performing assets (NPA) in the banking space and rising crude oil prices impacting oil marketing companies have all taken a toll in recent years.
  
  On top of that, when the government is in desperate need of money, they turn to PSUs. This usually leaves minority shareholders shortchanged.
  
  Not all companies in the sector can be ignored. But most of them turn out to be value traps.

She believes, a better alternative is to look at quality companies which are not restricted by regulatory hurdles.

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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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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