Sensex Trades Lower Tracking Weak Global Cues; Automobile & Banking Stocks Under Pressure

Tue, 14 Dec 10:30 am

   Previous Close   

   Closing   

Asian share markets opened lower today, extending falls on Wall Street ahead of a US Federal Reserve decision and as markets weighed worries over the latest coronavirus variant.

The Hang Seng is down 1.3% while the Nikkei shed 0.8%. The Shanghai Composite is trading lower by 0.3%.

In US stock market, Wall Street indices ended lower on Monday, with shares of Carnival Corp and several airlines tumbling as investors worried about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week.

The Dow Jones tanked 0.9% while the Nasdaq plunged 1.4%.

Back home, Indian share markets are trading lower tracking weak global cues.

Anand Rathi Wealth, a leading wealth management and mutual fund distributor, made its Dalal Street debut today.

The BSE Sensex is trading down by 181 points. Meanwhile, the NSE Nifty is trading lower by 52 points.

Power Grid and NTPC are among the top gainers today. Kotak Mahindra Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index is down 0.3%. The BSE Small Cap index is trading higher by 0.3%.

Sectoral indices are trading mixed with stocks in the automobile sector, banking sector and realty sector witnessing most of the selling.

Power stocks and metal stocks, on the other hand, are trading in green.

Shares of Schaeffler India and APL Apollo Tubes hit their 52-week highs today.

The rupee is trading at 75.86 against the US$.

Gold prices are trading down by 0.1% at Rs 48,274 per 10 grams.

Meanwhile, silver prices are trading down by 0.2% at Rs 61,471 per kg.

Crude oil prices edged higher but price gains were capped due to investor worries about oil demand after renewed restrictions were imposed in Europe and Asia amid a rise in coronavirus cases.

Speaking of stock markets, India's #1 trader Vijay Bhambwani talks about the best way to make money in an inflationary economy, in his latest video for Fast Profits Daily.

Tune in to the below video to find out more:

In news from the FMCG sector, ITC share price is in focus today.

Shares of cigarette maker ITC have gained momentum ahead of its much awaited first-ever analyst and institutional investor meet.

ITC's stock has advanced nearly 10% in the last six sessions.

Note that this meeting comes in the backdrop of mixed stock performance and rising investor concern over the company's growth prospects.

The stock of ITC has been the talk of town on how it has underperformed despite strong cash flows, a good balance sheet and dividend track record.

As per media reports, ITC's management is likely to share plans around building the next drivers of growth in businesses like FMCG and hotels though any announcement about a demerger of the hotel or information technology business is unlikely.

No board meeting is lined up anytime soon to finalise on these since ITC top management feels the time is not yet ripe with the hotel business still operating at pre-Covid-19 levels and volatility of the stock market.

To know more, check out ITC's 2020-21 annual report analysis.

Moving on to news from the automobile sector, TVS Motor on Monday said it has made fresh investment in the electric bike maker Ultraviolette Automotive.

Zoho Corporation has joined along with TVS Motor in the latest round of Series C funding, to support Ultraviolette's vision of developing high performance mobility solutions for India and global markets, the company said in a regulatory filing.

Ultraviolette, which is setting-up its manufacturing and assembling facility in Electronics City, Bengaluru, will utilise this investment towards the production and commercial launch of its high-performance electric motorcycle, the F77, and will roll out the first batch of motorcycles in the first half of 2022.

TVS Motor MD Sudarshan Venu said,

EVs are a huge focus area for us and we have invested in this area for over a decade. TVS is committed to developing exciting and aspirational products and we have always believed that EV development has to be ground-up for us to make that quantum leap into the global EV revolution.

This investment from TVS Motor and Zoho Corp is a validation of the company's endeavour to redefine the future of mobility, Ultraviolette Automotive Founder and CEO Narayan Subramaniam stated.

Shares of TVS Motor are currently trading down by 1.1%.

In other news, companies providing charging stations are seeing an increase in demand from real estate developers and residents' welfare associations (RWAs) in several cities as more people are buying electric vehicles (EVs).

While companies are forming partnerships with builders for projects that are still in the planning stages, demand is also arising from housing societies and old colonies that are willing to invest in EV charging stations.

Real estate developer Kalpataru is offering EV charging enabled parking at its upcoming projects. It provided this facility in some of its projects in the past as well.

Chandresh Sethia, co-founder of EVRE, an EV charging and battery swapping solutions provider said they are witnessing increased demand from real estate developers and even RWAs across multiple cities, including Mumbai, Pune, Bangalore, Delhi-NCR (National Capital Region) and Hyderabad.

The startup has entered into separate pacts with large real estate firms, including Hiranandani Group, Mahindra Lifespace and Bangalore Apartments' Federation.

We will keep you updated from the latest developments from this space. Stay tuned.

Speaking of EVs, have a look at the chart below which shows the massive opportunity in the two-wheeler EVs.

Here's what lead Smallcap Analyst at Equitymaster, Richa Agarwal wrote about this in a recent edition of Profit Hunter:

• In the last five years, two-wheeler sales in India were around 2 crore units per year. Now the sector is cyclical and has been in the downturn for some time. So let's consider a moderate 5% growth for the next 10 years.
  
  By 2030, we are looking at 2-wheeler sales of 3 crore units. Even if one third of this is EV sales, that's 1 crore electric 2-wheelers per year.
  
  In the last 2 years, average electric 2-wheeler sales were 1.5 lakh units. From 1.5 lakh to 1 crore, that's a 66x opportunity in 2-wheeler EVs.
  
  This is an annual growth rate of 52% over next 10 years. It's an almost vertical growth opportunity.

As per Richa, this is like a gold rush. But like in any gold rush, the winners will just be a few.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.