Service Sector Growth in November, RBI Action on HDFC Bank, and Top Buzzing Stocks Today

Fri, 4 Dec Pre-Open

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Indian share markets ended on a flat note yesterday.

At the closing bell yesterday, the BSE Sensex stood higher by 15 points.

Meanwhile, the NSE Nifty ended up by 20 points.

ONGC was among the top gainers. HDFC Bank, on the other hand, was among the top losers.

The BSE Mid Cap index ended up by 0.9%. The BSE Small Cap index ended higher by 0.7%.

Sectoral indices ended on a mixed note with stocks in the oil & gas sector and metal sector witnessing buying interest.

IT stocks, on the other hand, witnessed selling pressure.

Gold prices for the latest contract on MCX are trading up by 1.1% at Rs 49,189 per 10 grams at the time of closing stock market hours yesterday.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Speaking of stock markets, the past month was a staggering one. Benchmark indices saw huge buying interest and went on to touch record-high levels.

The BSE smallcap index was up 13% in November.

The BSE smallcap index has risen more than 10% in a month only 6 times in the last decade.

Foreign investors (FIIs) invested a net amount of around Rs 650 billion in November. This is the biggest purchase by FIIs by a big margin so far.

Will this rally in Indian share markets continue in December?

We reached out to Brijesh Bhatia, our new team member and Research Analyst of Fast Profits Reports, for his view on the Indian stock markets.

Here's what he had to say...

• The bulls celebrated Diwali with fireworks and started Samvat 2077 with a roar.
  
  The Nifty gained 11.4% in the month of November. 80% of the trading days ended on positive note. Midcap and Small Cap indices gained 15.5% and 13% respectively.
  
  We had 20 trading days in November 2020. 16 of them ended on positive note with 8 straight days of gains from 2nd to 11th November.
  
  The Nifty has now turned positive for CY2020 and has hit a new all-time high of 13,145.85.
  
  All sectorial indices ended on a positive note for the month.
  
  Metals (24.84%), Private Banks (24.25%), PSU Banks (23.63%), and Financial Services (22.84%) gained more than 20%.
  
  Sectors like IT (4.05%) and Pharma (5.30%) which has outperformed in the first leg of rally, were the underperformers.
  
  The stocks in Nifty 200 were on fire too. Out of 200 stocks, 179 ended on a positive note which means 90% stocks were in green zone.
  
  The broad-based buying indicates the momentum is still in the bull's favour. Entering the month of December, can this momentum prolong?
  
  Well, if we look at the seasonality chart for Nifty 50, December tends out to be the best month for bulls with an average return of 3.43% since 1996.
  
  Hope we have a Santa rally this Christmas too and end the pandemic year near all-time high levels!

You can read Brijesh's detailed profile here.

And in case you missed his first Equitymaster video, you can watch it now.

Top Stocks in Focus Today

SpiceJet will be among the buzzing stocks today.

SpiceJet announced that is gearing up to provide logistics support for Covid-19 vaccination with its dedicated freighter division SpiceXpress.

Note that the temperature sensitivity to maintain efficacy of the vaccine calls for reliable, fast and secure logistics partners who understand the importance of cold chains. SpiceXpress, the dedicated cargo arm of SpiceJet, has come forth to take up this responsibility of seamlessly transporting the vaccine through a specialized service called Spice Pharma Pro.

With a dedicated fleet of 17 cargo aircraft, SpiceXpress is capable of flying cargo to both domestic and a wide list of international destinations.

Larsen & Toubro share price will also be in focus as the company has signed a pact to sell its UK-based integrated marine automation solutions unit Servowatch Systems to Rolls-Royce.

The divestment is a part of L&T's strategy to exit non-core businesses and consolidate operations.

Market participants will also track Maruti Suzuki share price today as shares of the company hit an over 11-month high of Rs 7,777, up 7.5% on the BSE yesterday.

The stock of the passenger vehicles (PV) bellwether was trading higher for the fourth straight day, rising as much as 7% during the period, even as the company's volumes in November rose at a modest pace by 1.1% to 153,223 units, dragged by a 5% decline in the core mini and compact portfolio.

In an interview with Bloomberg Television on Wednesday, the company's Chairman R.C. Bhargava said Maruti is expecting retail sales in December to be "pretty good" as there are pending orders with its dealerships and the rate of enquiries has sustained even after the festive season.

India's Service Sector Grows for 2nd Straight Month in November

In news from the economic space, India's services sector expanded for the second month in a row in November though at a slower pace than the previous month and witnessed a rise in employment for the first time in nine months.

The IHS Markit India Services Business Activity Index was 53.7 in November, lower than 54.1 in October, and above the critical 50 mark that separates growth from contraction.

Services firms hired additional workers in November, ending an eight-month sequence of job shedding.

The upturn in total new work was driven by the domestic market, with new export orders decreasing sharply again in November. The latest fall in international sales, the ninth in consecutive months, was attributed to subdued global demand and travel restrictions.

Earlier this week on Tuesday, a survey showed PMI manufacturing falling to a three-month low of 56.3 in November from an over 12-year high of 58.9 in October.

Put together, Indian private sector activity rose for the third straight month in November, but the pace of growth softened from October's near nine-year high. The Composite PMI Output Index was down to 56.3 from 58 in October.

Note that India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped the gross domestic product (GDP) clock a lower contraction of 7.5%.

The GDP had contracted by a record 23.9% in the first quarter of 2020-21 fiscal (April 2020 to March 2021).

What effects the above developments have on Indian stock market remains to be seen. Stay tuned as we keep you updated on all the news from this space.

RBI Halts HDFC Bank's Digital Activities

The Reserve Bank of India (RBI) issued an order to HDFC Bank with regards to incidents of outage in its internet banking, mobile banking and payment utility services over the past two years.

In its order, the RBI has advised the bank to - firstly temporarily stop all launches of its digital business generating activities planned under Digital 2.0 and other proposed business generating IT applications, and secondly halt sourcing of new credit card customers.

The order also states that HDFC Bank's board must examine the lapses and fix accountability.

The Bank in its filing to the exchanges said it has taken "several measures to fortify its IT systems" over the last two years and will continue to work to "swiftly to close out the balance and would continue to engage with the Regulator in this regard."

HDFC Bank has had multiple failures in regard to digital services with customers complaining of inability to conduct credit and debit card transactions, internet banking, UPI, IMPS, and other modes of payment.

On November 21, customers complained of the payment stack being inoperative. Another similar incident took place on December 3, 2019, with customers complaining that they were unable to pay their loan EMIs or settle credit card bills on time.

Later, it was found out that the December outage took place because the lender underestimated growth in payment volumes and the November outage occurred due to a power failure in the bank's primary data centre.

Note that RBI's action comes after the central bank on November 23 sought an explanation from HDFC Bank after its digital services were disrupted from the evening of November 21 till November 22 morning - for over 12 hours.

We will keep you updated on all the news from this space. Stay tuned.

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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