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- Indian Stock Market News June 8, 2020
Sensex Trades 500 Points Higher; IndusInd Bank & Axis Bank Surge Over 8% Mon, 8 Jun 12:30 pm
Share markets in India are presently trading on a positive note.
Benchmark indices edged higher today, tracking strong global cues as investors turned optimistic over prospects of more government stimulus and eased lockdown restrictions across the world.
Global stock markets rallied on the back of a surprise recovery in US employment, which provided cause for optimism that global economies could quickly revive after many weeks of lockdowns aimed at controlling the coronavirus pandemic.
The BSE Sensex is trading up by 506 points, up 1.5%, at 34,750 levels.
Meanwhile, the NSE Nifty is trading up by 152 points.
Among individual stocks, shares of IndusInd Bank and Axis Bank surged over 8%.
The BSE Mid Cap index is trading up by 1.3%, while the BSE Small Cap index is trading up by 2.2%.
On the sectoral front, gains are largely seen in the oil & gas sector and metal sector.
The rupee is trading at 75.62 against the US$.
Gold prices are trading up by 0.6% at Rs 45,955 per 10 grams.
Speaking of stock markets, in his latest video, Rahul Shah, co-head of research at Equitymaster, talks about the stocks that can make you incredibly rich in 2020 and beyond.
He goes back to the year 2013 and come up with 3 groups of 3 companies each, with each group having businesses of a certain quality. He then shares the group that ends up giving much better returns and why so.
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In news from the telecom sector, Vodafone Idea share price is in focus today. Shares of the company are trading higher for the 10th straight day today.
The company's stock price surged 20% intraday today to Rs 12.60 on the NSE in early morning trade.
In the past 10 sessions, the stock price of the company has zoomed about 129% from level of Rs 5.50 hit on May 26.
As per reports, the sharp rally in the past couple of weeks has been fuelled by reports that global technology giant Google is in talks to buy a 5% stake in the company.
However, the company clarified on May 29 that it was constantly evaluating various opportunities but there was no proposal before the board of the firm as yet.
Shares of Vodafone Idea are presently trading up by 11.4%.
Moving on to news from the banking sector, the Finance Ministry on Sunday said that public sector banks (PSBs) have disbursed Rs 83.2 billion till June 5 under the Rs 3-trillion Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.
Meanwhile, PSBs have sanctioned loans worth Rs 177.1 billion under the 100% ECLGS starting June 1.
State Bank of India (SBI), the country's largest lender has sanctioned Rs 117 billion, while disbursement was nearly half at Rs 60.8 billion at the end of June 5.
It is followed by Punjab National Bank (PNB) with a sanction of Rs 13 billion, but disbursement was less than one-fifth at Rs 2.4 billion.
Last month, the cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25% through ECLGS for the MSME sector.
Under the scheme, 100% guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 416 billion was provided by the government spread over the current and the next three financial years.
Note that this scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat package announced by Finance Minister Nirmala Sitharaman last month.
In other news, as per a leading financial daily, the government is likely to designate the banking/financial sector strategic under the new privatisation policy, the contours of which are nearing finalisation.
A top government official said discussions had also been held on privatising some state-owned banks that are not on the consolidation list so far.
According to the new privatisation policy, announced by Finance Minister Nirmala Sitharaman as part of the Aatmanirbhar Bharat package, the government will come up with a list of strategic sectors.
In each strategic sector, no more than four state-owned companies will exist.
How the above developments pan out remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.
Speaking of PSBs, which banks look the best match post the latest matchmaking of PSU banks?
Needless to say, most investors would also be worried about the level of NPAs and current and savings accounts (CASA) of the merged entities.
Lower NPA ratio and sustenance of high CASA, in the future, could signal the banks' fitness levels to lend more.
But what could go unnoticed is the efficiency potential of the merged entities.
Post-merger, the employee per branch ratio of the consolidated PSU entities could be in the range of 7 to 9 per branch. This would be almost half that of their private sector counterparts like HDFC Bank and Kotak Bank.
India's Top 6 Public Sector Banks Are Getting Fitter
Leaner operations would mean use of technology to support growth.
So, we would not be surprised if the PSU entities leverage technology at a much bigger scale than their private sector peers, in a few years.
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
Indian Share Market Update: Top Gainers and Losers
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