Sensex Ends 587 Points Lower; Realty and Metal Stocks Witness Huge Selling

Thu, 22 Aug Closing

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India share markets continued to witness selling pressure during closing hours and ended their day deep in the red.

At the closing bell, the BSE Sensex stood lower by 587 points (down 1.6%) and the NSE Nifty closed down by 182 points (down 1.7%).

The BSE Mid Cap index ended the day down 1.4%, while the BSE Small Cap index ended the day down 2.2%.

Note that the decline in small-cap segment has been sharper since the Union Budget, with the BSE Smallcap index hitting its lowest level since February 2017.

But Richa Agarwal says this fall currently offers the best bargains to the market.

In the below video, she talks about picking right stocks to benefit from the upcoming rebound.

Sectoral indices ended on a negative note with stocks in the realty sector and metal sector witnessing most of the selling pressure.

The rupee was trading at 71.87 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 0.84% and the Shanghai Composite was up by 0.11%. The Nikkei 225 was up 0.1%.

European markets were trading on a negative note. The FTSE 100 was down by 0.52%. The DAX was trading down by 0.10%, while the CAC 40 was down by 0.40%.

Speaking of stock markets in general, the market is typically focused on the most recent star performers.

You will often find the likes of HUL or HDFC Bank being the market darlings for never having a disappointing quarter.

But it is rare to find companies that thrive through most of their survival period.

Tanushree Banerjee shares few of her thoughts on this. Here's an excerpt of what she wrote in today's edition of The 5 Minute WrapUp...

• It is rare to find companies that survive for decades. It's even rarer to find ones that thrive through most of their survival period.
  
  So, if you do not wish to pay steep valuations for the market darlings, you need to look for the companies with history and consistency on their side.
  
  And they shouldn't be too conspicuous to the market either.
  
  I am talking of companies like Hawkins and City Union Bank. They have a track record of paying dividends for decades.
  
  The dividends such companies pay are especially helpful at a time when globally interest rates are headed lower.

And, as seen in the chart below, 'risk-free returns' from debt seem to have gone missing.

Inflation Adjusted Risk Free Returns Are Negligible Globally

Moving on to the news from the pharmaceutical sector, Lupin share price was in focus today as the company announced the launch of Fluoxetine tablets USP, 10 mg and 20 mg, having received an approval from the United States Food and Drug Administration (USFDA) earlier.

Fluoxetine tablets is the generic equivalent of Eli Lilly and company's Prozac tablets.

In the news from the realty sector, DLF share price was in focus today as the company got a notice from the Supreme Court for non-disclosure of key information in Qualified institutional placement (QIP).

Petitioner KK Sinha, on whose complain SEBI had earlier barred DLF promoters from markets and imposed a penalty, told SC that DLF failed to mention key cases regarding the violation of the Haryana Land Ceiling Act, 1972, where adverse orders were passed by the Punjab and Haryana High Court, and the matter is pending with the SC.

The report said the court had ordered directed investigation into DLF group companies and its admitted subsidiaries for violation of land ceiling laws, matters concerning benami purchases, licensing, stamp duty payment and transfer pricing issues.

The report said if there is an adverse decision by the apex court then it could impact DLF investors as petition prays that the company be asked to return more than Rs 50 billion that it raised via two qualified institutional placements (QIPs), one of which was in 2019.

How this all pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

In the news from the commodity space, crude oil was witnessing selling pressure today. Prices were weighed down by worries about the global economy and bigger-than-expected builds in oil product inventories in the United States, the world's biggest oil consumer.

In other news, data from the oil ministry's Petroleum Planning and Analysis Cell (PPAC) showed that India's July crude oil imports declined from a year earlier, while petrol imports climbed to their highest since at least April 2011.

Crude oil imports declined 1.2% from a year earlier to 19.34 million tonnes, but increased 14.6% from the previous month.

Petrol imports rose to 230,000 tonnes in July, the highest since PPAC data going back to 2011.

Government data published earlier this month showed sales of gasoline, or petrol, were 8.8% higher from a year earlier at 2.52 million tonnes.

Meanwhile, LNG imports fell to their lowest since February 2018 at 850,000 tonnes.

Note that India's imports of crude oil have stalled in recent months, with both coal and liquefied natural gas (LNG) also soft.

This fall could be attributed to Indian refiners adjusting to the loss of cargoes from Iran after the United States did not extend waivers to buyers of Iranian crude beyond the beginning of May.

To know more about crude oil and the recent developments in this space, you can read Vijay Bhambwani's recent article here: Message of the Markets - What is Crude Oil Indicating?

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!

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