Sensex Opens Firm; Telecom and Energy Stocks Lead

Fri, 27 Dec 09:30 am

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Asian stock markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.7% while the Hang Seng is up 1.3%. The Nikkei 225 is trading flat. The Nasdaq crossed the 9,000-point mark for the first time on Thursday as all three major Wall Street indices posted record closing highs, boosted by optimism over US-China trade relations and gains in shares of Amazon.com after a report signaled robust online holiday sales.

Back home, India share markets opened on a higher note. The BSE Sensex is trading up by 140 points while the NSE Nifty is trading up by 48 points. Both, the BSE Mid Cap index and BSE Small Cap index opened the day up 0.3%.

Barring realty stocks, all sectoral indices have opened the day in green with telecom stocks and oil & gas stocks witnessing buying interest.

Speaking of stock markets, as the new year 2020 is about to kickstart, Girish Shetty shares a simple guide on how to improve your stock picking process.

This quick guide will surely help you make better decisions.

Tune in now!

The rupee is currently trading at 71.25 against the US$.

The rupee pared its early gains and settled lower by 4 paise at 71.31 against the US currency on December 26 amid heavy selling in domestic equities and steady rise in crude oil prices.

Month-end dollar demand and weakness in domestic equities weighed on the domestic currency, the reports noted.

At the interbank foreign exchange market, the rupee had opened higher at 71.26 against the US dollar.

During the day, the domestic unit fluctuated between a high of 71.22 and a low of 71.35.

Speaking of currencies, Vijay Bhambwani, editor of Weekly Cash Alerts, tells you the main reasons why not to trade commodities and currencies the same way you would trade equities. Here's an excerpt of what he wrote...

• Currencies are traded in pairs and the most liquid is the USDINR. Currencies are traded in four decimal points just as bonds are. The international derivative trader's association has indicated that forex may be traded in 6 decimals in the coming few years.
  
  It takes months sometimes for the currency pair to pass the next round figure, say from 70 to 71.
  
  Can you really trade commodities and currencies alike or for that matter, equities and currencies alike? Definitely not!

To know more, you can read Vijay's entire article here: Is Trading in Equities, Commodities, and Currencies the Same?

Moving on the news from IPO space. Reflecting the woes of the broader Indian economy, fundraising through initial public offerings fell by 60% in 2019 over the previous year.

According to data collated by Prime Database, 16 IPOs in 2019 raised Rs 123.6 billion as compared to 24 IPOs in 2018 that raised Rs 309.6 billion.

That the economy is in bad shape, India's GDP growth rate fell to over-six-year low of 4.5% in July-September 2019 is clear from the fact that 47 companies that received approvals to raise Rs 510 billion via IPOs allowed them to lapse.

But driven by offer-for-sale and qualified institutional placements, the street saw 28% growth in overall fundraising at Rs 811.7 billion in 2019.

The year 2017 saw 36 IPOs mopping up Rs 671.5 billion, while 2016 saw 26 issues collecting Rs 264.9 billion and Rs 136.1 billion being raised in 2015 through 15 issues and 2014 being the worst at Rs 12 billion from five IPOs. At Rs 28.5 billion, the largest IPO in 2019 was that of Sterling and Wilson Solar Ltd.

Seven IPOs were subscribed more than 10 times, IRCTC Ltd. (109), Ujjivan Small Finance Bank Ltd. (100), CSB Bank Ltd. (48), Affle (India) Ltd. (48) times, Polycab India Ltd. (36), Neogen Chemicals Ltd. (29) and Indiamart Intermesh Ltd. (20).

On the listing side, however, 2019 proved to be good for IPOs.

In a recent edition of The 5 Minute WrapUp, Ankit Shah shared 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?

It would be interesting to see how this trend pans out in 2020.

As per the reports, The IPO pipeline for 2020, however, looks strong. 21 firms have received the market regulator's approval to raise as much as Rs 187 billion via initial share sales. Another 13 are awaiting approval to raise a further Rs 180 billion.

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

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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