Wholesale Inflation in November, Rising Wilful Defaults at Banks, and Buzzing Stocks Today

Tue, 15 Dec Pre-Open

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Indian share markets ended marginally higher yesterday.

In the afternoon session yesterday, benchmark indices turned volatile and climbed off their fresh lifetime highs scaled in early trade. However, losses were recouped during closing hours amid huge buying seen in metal and capital goods stocks.

At the closing bell yesterday, the BSE Sensex stood higher by 154 points.

The NSE Nifty stood higher by 44 points.

ONGC and L&T were among the top gainers. M&M, on the other hand, was among the top losers.

The BSE Mid Cap index ended up by 0.8%. The BSE Small Cap index ended higher by 0.7%.

Sectoral indices ended on a positive note with stocks in the capital goods sector and oil & gas sector witnessing buying interest.

The BSE Capital Goods index hit a fresh 52-week high of 18,252, up 2%, on expectation of sustained growth momentum. Shares of Larsen & Toubro (L&T), Bharat Electronics, Graphite India, NBCC and Lakshmi Machine Works from the index were up in the range of 2-6%.

Gold prices were trading down by 1% at Rs 48,822 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 the precious yellow metal, in his latest video, India's #1 trader, Vijay Bhambwani shares his view on gold and silver for the coming year.

In the video, Vijay explains the reasons behind staying positive on these assets.

Tune in here to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be Cipla.

Pharmaceutical giant Cipla has settled a patent litigation for a generic of a blood cancer pill with innovator Celgene, a wholly-owned subsidiary of Bristol Myers Squibb.

Celgene, according to the settlement, has agreed to provide Cipla with a license to its patents required to manufacture and sell certain volume-limited amounts of Lenalidomide - a copycat version of Revlimid - in the U.S. beginning sometime after March 2022.

Power Grid share price will also be in focus today as the company said its board approved the payment of interim dividend of Rs 5 per equity share for the financial year 2020-21.

The company has fixed 19 December 2020 as the record date for determining the entitlement of the shareholder for the interim dividend.

The dividend will be paid on January 8, 2021.

Market participants will also track Burger King India share price as the stock of the company made a strong debut at the bourses yesterday.

The stock listed at Rs 115.35, a 92% premium against its issue price of Rs 60 on the BSE.

Note that Burger King India's initial public offer (IPO) received an overwhelming response from investors, with the public offer being subscribed 157 times. The issue generated bids for 11.7 billion shares, worth Rs 700 billion, as against only 75 million on offer.

That made Burger King India the fourth mainboard IPO this year, which saw bidding of 100 times and more. The other three were Mazagon Dock Shipbuilders (157.41 times), Happiest Minds (156.65 times) and Chemcon Speciality (149.3 times).

Wholesale Inflation Rises to Nine-Month High in November

In news from the economic space, India's wholesale inflation rose for the fourth consecutive month and firmed up to a nine-month high of 1.55% in November driven by manufactured items, data released by the commerce and industry ministry showed.

Wholesale price index (WPI) inflation was 1.48% in September.

The annual rate of inflation based on WPI Food Index, which comprises 'food articles' from primary articles group and 'food product' from manufactured products group, decreased to 4.27% in November from 5.78% in October.

The government retained the wholesale inflation for September at 1.32%.

Food inflation in November stood at 3.94%, against 6.37% in the previous month.

The rate of price rise in vegetables and potato remained high at 12.24% and 115.12% during the month.

How these numbers pan out in the coming months remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

India's Biggest Banks See Significant Jump in Wilful Defaults

In news from the banking sector, eight of India's biggest banks have seen a significant jump in wilful defaults in the six months to September, with such loans rising by over Rs 370 billion to Rs 1.5 trillion, shows data on suit-filed accounts from credit bureau TransUnion Cibil.

These banks - State Bank of India (SBI), Punjab National Bank, Bank of Baroda, Bank of India, Union Bank of India, ICICI Bank, HDFC Bank and Axis Bank account for 75% of all loans reported as wilful defaults as of 30 September.

In the same period last year, the increase was about Rs 100 billion.

Reports state that the merger of some state-run banks on 1 April naturally led to the anchor banks taking over wilful defaulters on their books.

But this is not the only space where wilful defaults have risen. SBI, not involved in any of the mergers, saw total wilful defaults rise by around Rs 140 billion in the six months to September to Rs 584.8 billion.

ICICI Bank's wilful defaults fell 0.2%, while HDFC Bank saw a 0.8% rise.

The aggregate increase has largely come from a few public sector banks.

Aiming to curb wilful defaults, the Centre had asked public sector banks in 2019 to examine all accounts exceeding Rs 500 million, if classified as non-performing and check for possible fraud.

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

Speaking of the banking sector, note that the sector was one of the worst affected sectors in the Indian stock market when Covid-19 struck.

Banking stocks were severely punished. No investor wanted to touch them even with a 10-ft pole.

However, sentiment have changed now as investors are chasing banking stocks like never before.

Banks were among major losers with a cut of 34% in the month of March. Cut to October, they are the biggest gainers for the month with more than 11% returns!

If you're interested in knowing what could be the reason behind such a change in sentiment, you can read about it in one of the editions of Profit Hunter: Banks are booming in a Covid World.

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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