Indian Stock Markets Open Lower; Metal Stocks Under Pressure

Wed, 4 Dec 09:30 am

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Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.3% while the Hang Seng is down 1.3%. The Nikkei 225 is trading down by 1.3%. A comment by President Donald Trump that a deal to end the US-China trade war might not come until after the November 2020 election weighed on global stock markets on Tuesday, sending investors to the safety of bonds.

Back home, India share markets opened lower. The BSE Sensex is trading down by 92 points while the NSE Nifty is trading down by 24 points. The BSE Mid Cap index and BSE Small Cap index opened down by 0.4% and 0.2% respectively.

Except IT stocks, all sectoral indices have opened the day in red with capital goods and metal stocks witnessing maximum selling pressure.

The rupee is currently trading at 71.77 against the US$.

In the news from the IPO space. CSB Bank is set to make a debut on bourses today after a massive subscription of 87 times.

The Rs 4.1-billion public issue saw strong subscription from all kinds of investors. The portion set aside for non-institutional investors was subscribed 164.7 times, qualified institutional buyers 62.2 times and retail investors at 44.5 times.

Overall, the issue had received bids worth Rs 195.9 billion.

As a result, market participants expect CSB Bank to list with a hefty premium.

The public issue, which was opened for subscription during November 22-26, comprised of fresh issue of Rs 240 million and offer for sale of 19.7 million shares by selling shareholders including HDFC Life, ICICI Prudential Life, ICICI Lombard, Federal Bank etc.

Speaking of IPOs, 2019 has seen some of the most mindbogglingly profitable IPOs.

The top six IPOs of the year have given high double-digit and triple-digit returns so far - IRCTC (180%), IndiaMART InterMESH (121%), Affle India (105%), Neogen Chemicals (73%) and Polycab India (72%).

In a recent edition of The 5 Minute WrapUp, Ankit Shah shares how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of the year and checked the retail investor enthusiasm for them.

Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments. This can be seen in the chart below:

Are Retail Investors Back in the IPO Game?

Here's what Ankit wrote about it...

• Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!
  
  Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.

Does this hint that retail investors are coming back to the markets? Could we witness of flurry of IPOs in the coming months?

Ankit is keeping a close watch and going to pick all the profitable IPOs for his readers at Insider.

Also, since we are talking about IPOs, this one IPO has been the hot topic in the world over. I am talking about the Saudi Aramco IPO.

There's a lot going on this front.

Saudi Aramco's much heralded and oft-delayed initial public offering is going ahead, albeit in a scaled down version of the original plan by Saudi Crown Prince Mohammed bin Salman.

There'll be no grand opening on the London or New York stock exchanges. The sale is restricted to the Saudi bourse and won't even by marketed to most international money managers.

Investors will be able to purchase just 1.5% of the world's most profitable company, about half what was previously considered. Even so, the share sale in early December will come close to, or even surpass, the record for the biggest IPO in history.

So, what does all that mean for crude oil investors and traders? And why is important?

At a time when Saudis are not sharing many details with their wall street investment bankers, Vijay Bhambwani in his latest video, raises a few questions that the mainstream media is not covering, and not even crude oil traders are asking...

Tune in to find out...

Moving on to the news from pharma sector. As per an article in a leading financial daily, Biocon, with its partner Mylan, launched the much-awaited oncology biosimilar of Trastuzumab in the US.

It marks the second biosimilar launch in the US after the company's launch of oncology drug Pegfilgrastim earlier.

Reportedly, the Trastuzumab launch is likely to give good mileage to Biocon being the first biosimilar launch of Roche's Herceptin, which is a US$2.9 billion brand.

Further, Biocon-Mylan will be launching both the strengths (420 mg and 150 mg) of biosimilar Trastuzumab.

Biocon 's prospects continue to be driven by the launch of biosimilars, which is also a key reason for its stock price gaining more than 30% since September lows.

The company has been targeting emerging markets which are witnessing strong sales and has also commercialized both insulin and Trastuzumab biosimilars in Australia.

Speaking of the biosimilars, note that, biosimilars and biologics are burgeoning sectors. Also, major scientific and technological advances, coupled with socio-demographic changes and increasing demand for medicines will revive the pharma industry's fortunes in another 10 to 20 years.

But given the complexity of biologics, will Indian companies be able to break some ground in this space?

Going forward, whether the monetization of biosimilars prove to be a big growth driver for the company will be the key thing to watch out for.

Biocon share price opened the day down by 0.8%.

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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