Rising Rupee; Auto Sales Data; SBI; GAIL among Top Stocks to Sway Markets Today

On Monday, Indian share markets fell over 244 points amid sell off on the first day of the new year led by losses in banks, IT and automobile stocks.

TCS, HUL, IndusInd Bank and BPCL lost the most on both indices, while BHEL, Wipro, Tata Power and Indiabulls Housing were the top gainers.

Top Stocks in Focus

SBI share price will be in focus after the bank announced reducing its lending interest rate by 30 basis points (bps) to 8.65%.

IndusInd Bank raised US$ 500 million term loan from overseas lending bodies to expand its business. The fundraising, along with the funds raised during the ongoing financial year from multilateral institutions ADB and OPIC, will help the bank expand its lending to clients, the reports noted.

Maruti Suzuki share price will hog limelight after it reported a 10.3% rise in December sales. The automaker sold 130,066 units in December, compared to 119,286 in same period last year.

Meanwhile, Atul Auto reported sale of 2890 units, with a rise of 13.1% for the month of December 2017 as compared to 2556 units sold in December 2016. The company's total sales for April - December 2017 stood at 31,120 units, up by 2.3% as compared to 30,410 units in the same period last year.

GAIL share price will be in focus as it has commissioned India's second largest rooftop solar PV power plant at its Petrochemical Complex at Pata, Uttar Pradesh. With an expected PLF of around 15% annually over 7.9 million KWh of electricity is targeted to be generated for captive use of India's largest gas based petrochemicals plant.

The Sajjan Jindal-led company terminated a pact to acquire Jaiprakash Power Ventures Ltd.'s 500MW plan in central India after the indicative time for completing the transaction ended on 31 December.

Global Economy Week Ahead

The new year kicks off with data on the US labor market and minutes from the Federal Reserve, as well as an update on eurozone inflation.

On Wednesday, the Federal Reserve will release minutes from its 12-13 December policy meeting, when officials voted to raise short-term interest rates for the third time in 2017. The minutes also could shed light on how US central bank officials saw the Republican tax overhaul affecting the economy in 2018 and beyond.

While on Friday, Eurostat will release flash December inflation data for the Eurozone and the Labor Department will release its December report on the US labor market. The always closely watched jobs report will show year-end trends for hiring, unemployment and wage growth.

Upcoming IPOs

Bandhan Bank Ltd on Monday filed its draft initial public offering (IPO) prospectus. The bank said that it will be offering 119.3 million shares in its proposed initial share sale, through a mix of primary and secondary share sale.

The IPO consists of a fresh issue of up to 97.6 million shares and an offer for sale of up to 14.1 million shares by International Finance Corp. (IFC) and up to 7.6 million equity shares by IFC FIG Investment Co. IFC and IFC FIG collectively own 4.94% stake in the bank. The share sale will see a dilution of around 10% stake.

Some of the other firms which are gearing up with their IPOs in 2018 are Hindustan Aeronautics Ltd, Continental Warehousing Corporation, Bharat Serum and Vaccines Ltd, Acme Solar, NSE, ReNew Power, ICICI Securities among others.

Speaking of IPOs, the demand for IPO's had reached sky-high levels last year.

One shall note that, more than 70% of the IPOs listed in 2007 and 2008 are in the red, even today when the Sensex is at an all-time high.

A merit-based selection primarily including valuation, business, and management quality is the logical way to go about investing in IPOs. If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often than not.

To know more, download this FREE report now and discover How to Get Rich with IPOs. This guide will show you how to safely profit from the 2017 IPO rush.

Rupee Rallies To 5-Month High

The local currency advanced for a third day to the highest since August on the back of possible inflows into bonds.

The dollar-rupee pair dropped 0.3% to 63.67 Monday after touching 63.65 earlier, the weakest level since August 2017.

The RBI last month announced raising investment limits for foreign investors in central government bonds for Jan-March quarter by Rs 64 billion, and by Rs 58 billion in state government notes. Foreigners bought Rs 1.4 trillion worth of rupee bonds in 2017 and US$7.7 billion of stocks.

From Commodities Space

Gold prices ruled flat at Rs 30,400 per ten grams on the first trading day of the year 2018 due to scattered deals. However, silver rose Rs 120 to Rs 40,100 per kg on increased offtake by industrial units and coin makers.

Reportedly, the near absence of cues from global markets, which remained closed yesterday on account of New Year Holiday, also influenced the sentiment.

To keep a tab on the movements in crude oil and other commodities, you can read the stock market commentaryfrom the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.

From Cryptocurrencies Space

Bitcoin prices were hovering below the US$14,000 mark in a soft start to the New Year 2018. Bitcoin prices were at around US$13,700 - down around 1% - on cryptocurrency exchange Bitstamp.

Bitcoin had a great run in 2017, though it witnessed some volatility. Bitcoin prices jumped nearly 14 times from the start-of-the year price of around US$1,000.

This led authorities in many countries, including India, to warn the public to be wary of virtual currencies. Bitcoin hit a record high of around US$20,000 in mid-December, before witnessing one of its biggest selloffs since 2013.

Interestingly, there are over 800 cryptocurrencies in existence today, with new ones being added to the list every day.

While the world of digital currencies is intriguing, it can get very confusing for the layman. Our team member, Ankit Shah, Research Analyst, has decided to study cryptocurrencies and help our readers understand them.

Here's Ankit's take in a recent edition of Equitymaster Insider:

• I've been studying and tracking bitcoin for a while, and though I still understand very little about it, I believe that it is a revolutionary technology that could transform a range of businesses and money itself. It would be naive to dismiss it as a passing fad.
  
  I want my readers to be on top of the biggest megatrends in the global economy. So, you can expect to hear about bitcoin whenever there is an important update or insight.

Ankit has also released a premium guide for Equitymaster Insider subscribers, titled Bitcoin 101 which contains everything you need to know about bitcoins and other digital currencies.

If you haven't been receiving Ankit's insights, get on the Insider's list now.

This article was originally published in English at www.equitymaster.com

Read the complete Indian stock market update. For the terms of use, go here.

Sensex, Nifty Begin New Year on a Weak Note; Auto & Bank Stocks Fall

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.

The IPO activity in FY17 is mainly driven by Offer for Sale (OFS) rather than fresh issues.

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

Read the complete Indian stock market update. For the terms of use, go here.

Sensex Trades on a Volatile Note; IT Stocks Top Losers

After opening the day in green share markets in India  witnessed choppy trading activity and are presently trading below the dotted line. Sectoral indices are trading on a mixed note, with stocks in the realty sector and stocks in the power sector witnessing maximum buying interest. While stocks in the IT sector are leading the losses.

The BSE Sensex is trading down by 20 points (down 0.1%) and the NSE Nifty is trading down by 12 points (down 0.1%). Meanwhile, the BSE Mid Cap index is trading up by 0.8%, while the BSE Small Cap index is trading up by 1.2%. The rupee is trading at 63.66 to the US$.

In news from stocks in the oil and gas sector. Oil India Ltd. (OIL) share price is in focus today after the oil major announced two hydrocarbon discoveries during 2nd and 3rd quarter of 2017-18 through its exploratory efforts.

The discoveries were made in the Dumduma Petroleum Mining Lease (PML) in the Upper Assam basin. The first well discovery in South Chanmari-5 encountered multiple sands in Narpuh and Lakadong+Therria (LK+TH) formations of Eocene age. On testing, a 10m LK+TH sand at a depth of 4290m, produced gas at the rate of 50,000 scmd.

The second well discovery Hukanguri-2 encountered two zones, one each in Narpuh and LK+TH formation. On testing, a 18m Narpuh sand, produced oil at the rate of 55m3/d. Presently, the well is under extended production testing.

The oil discovery in Hukanguri-2 is the first commercial discovery in Narpuh formation. As per the company, this discovery will open up new avenues for exploration in Narpuh play in Upper Assam basin. Both these discoveriies will help in enhancing the oil & gas production with future appraisal & development activities.

At the time of writing, OIL share price was trading up by 0.8%.

Moving on to news from stocks in the pharma sector. Biocon share price is among the most active stocks today after Biocon and Biocon and Mylan's proposed biosimilar trastuzumab was approved by Brazilian regulatory agency ANVISA, through their partner Libbs Farmaceutica (Libbs).

Biosimilar trastuzumab, indicated for breast cancer treatment, has been co-developed by Biocon and Mylan. Biocon said currently biosimilar trastuzumab will be manufactured by it and supplied to Libbs for commercialisation in Brazil.

Earlier this month, the US health regulator approved biosimilar trastuzumab. The proposed biosimilar is also under review by regulatory authorities in Australia, Canada, Europe and several emerging markets.

Biocon share price was trading up by 0.6%.

The Indian pharmaceutical industry has come under a lot of regulatory pressure in the past few years.

The sector has faced great volatility over the years.

We had written about the current predicament of Indian pharma companies in one of the premium editions of the 5 Minute WrapUp:

• Over the past few years, risk in the US markets has increased. The US Food and Drug Administration has become stricter on products entering US borders. Surprise inspections have increased and companies are being issued warning letters. This has impacted the business and earnings of Indian pharma players, causing major volatility for the sector.

Is the Worst Over for all the Pharma Stocks?

The list of pharma sector woes is long. So, is there light at the end of the tunnel? Girish Shetty, Research Analyst thinks there is.

As per him, it doesn't make sense to paint all pharma stocks with the same brush. The leaders of the industry will certainly survive this phase. There are interesting, niche pharma stocks that are worth your attention.

Facing pricing pressures in the domestic and export markets, currency fluctuations, as well as manufacturing issues related to their plant, there is a transformation happening in the overall sector as to how business is done and will be done in the future.

This article was originally published in English at www.equitymaster.com

Read the complete Indian stock market update. For the terms of use, go here.