Indian share markets witnessed selling pressure in the final hour of trade and finished on a weak note. At the closing bell, the BSE Sensex closed lower by 244 points and the NSE Nifty finished lower by 95 points. The S&P BSE Mid Cap finished up by 0.1% while S&P BSE Small Cap finished up by 0.3%. Losses were largely seen in banking sector, auto sector and software sector.
Rupee was trading at Rs 63.67 against the US$ in the afternoon session. Oil prices were trading at US$ 60.12 at the time of writing.
Moving on to news from automobile sector. Maruti Suzuki India reported a 10.3% increase in total sales at 130,066 units in December 2017 compared to 117,908 units in the same month of 2016.
Domestic sales stood at 119,286 units, up 12.1% from 106,414 units in December 2016. Exports were down 6.2% to 10,780 units as compared with 11,494 units in the same month last year.
Maruti Suzuki share price finished the day down 0.7% on the BSE.
Moving on to news from IPO segment. As per an article in The Livemint, Bandhan Bank Ltd, one of the two entities to receive a universal banking licence in 2015 and the only microfinance institution to do so, on Monday filed its draft initial public offering (IPO) prospectus.
The bank said that it will be offering 119.28 million shares in its proposed initial share sale, through a mix of primary and secondary share sale. The IPO will comprise a fresh issue of up to 97.7 million shares, and an offer for sale of up to 14.1 million shares by IFC and 7.6 million shares by IFC FIG.
Bandhan's IPO is expected to be one of the largest IPOs this year and is expected to hit the market around March or April.
If you've been tracking the demand for IPOs, you would certainly think that 2017 was the year of IPOs. For one, IPO subscriptions were at sky high levels. But if the performance of recently listed IPOs are anything to go by, they have flattered to deceive.
Of the five recent high profile IPOs which listed on the stock market, four have given negative returns as of yesterday's closing price.
Poor IPO Returns Post Listing
The IPO euphoria is something similar to what was seen in 2007-08. More than 70% of the IPOs listed in 2007 and 2008 were in the red, even today when the Sensex is at an all-time high.
But it doesn't make sense to completely ignore this space. The IPO space has also given us names like Maruti, TCS, and Jubilant Foodworks Ltd (with returns over 4,000%, 1,000% and 500% respectively) that have created immense wealth for shareholders.
For the retail investor, it is very important to ignore the noise and focus on the fundamental and valuations on the table. And more often than not, this approach works much better than following the herd.
In news from the oil & gas sector, credit ratings agency, ICRA in its latest report has said that higher crude prices could force the Government of India to reduce the excise duty on auto fuels, in order to soften the impact on consumers.
The ratings agency further noted that there will also be pressure on the government to increase subsidy allocation for the petroleum products, with increase in under-recoveries in ensuing years. ICRA also expects negative impact of crude oil spike on macro economy and oil marketing firm's profitability.
It said that rising crude prices would put pressure on the oil companies to increase their working capital and short-term debt levels and this will impact their profitability. It further noted that the oil marketing companies could face pressure on their marketing margins, due to rising prices of petroleum products and escalating competition from the private fuel retailers.
Besides, ICRA said that rising crude oil prices would also test the Government's resolve to keep prices of auto-fuels at market-determined levels, which would have material implications for private marketers.
On the prices front, the rating agency said that petroleum product prices are rising following spike in crude oil and this would have marginal impact on petroleum products demand growth.
Oil & Gas stocks finished the day on a negative note with ONGC share price and Hindustan Oil Exploration share price leading the losses.
Meanwhile, Steel Authority of India (SAIL) is mulling to bid for the stressed assets of Essar Steel and Bhushan Steel that are facing insolvency proceedings.
In this regard, a team of SAIL has visited the units of Essar Steel and Bhushan Steel almost 20 days back to assess how are units and to evaluate whether to bid for the units or not.
Essar Steel was among the initial 12 companies identified by the Reserve Bank of India (RBI) for insolvency proceedings.
SAIL share price finished the day up by 0.6% on the BSE.
In another development, as per a leading financial daily, JSW Energy has terminated the proposed acquisition of the 500MW (2x250 MW) thermal power plant located at Bina, District Sagar in the state of Madhya Pradesh (Bina project) from Jaiprakash Power Ventures.
JSW Energy share price fell 1.4% in today's trade.
And here's a note from Profit Hunter
The Indian indices witnessed selling pressure in the last half an hour of today's trading session. The Nifty 50 Indexfell nearly 100 point while S&P BSE Sensex plunged 250 points. Despite this, Wipro was up 1% and witnessed buying interest.
The stock bottomed out in November 2016 at 204 and traded in a smooth uptrend. This up move halted near 280 level in June 2017 where the stock corrected for a while. But the stock resumed up after hitting a low of 252 in the same month and rallied to 300 level. The stock then traded in a narrow range of 280 - 300 for nearly five months.
Recently, the stock broke above the upper end of the range and today it hit a high of 320. The recent up move was supported by above average volumes.
So will the stock continue its uptrend or if the weakness in the broader market indices weigh on it? Let's wait and watch...
Wipro Resumed its Uptrend
This article was originally published in English at www.equitymaster.com
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