Share Market News Today | Sensex, Nifty, Share Prices Highlights: Sensex and Nifty after having started today’s trading session with gains slipped into red and ended with losses. S&P BSE Sensex closed 97 points lower while the Nifty 50 was below the 11,450 mark. HCL Technologies, TCS, Infosys, Tech Mahindra were some of the best performing stocks. All Nifty sectoral indices were trading with gains. Nifty Media was up 2%. Midcap and Small cap indices ended with gains, outperforming the benchmarks by a good margin.
Markets will also be closely watching the developments surrounding SEBI’s circular, that asks Multi-cap funds to stay true to the label and invest 25% each in Smallcap, Midcap, and Large Cap stocks. This order by SEBI has invited mixed emotions with some claiming it to be a good move to boost the midcap and smallcap stocks while others claiming that it would hurt the multi-cap mutual funds. SEBI, on Sunday evening, issued another circular that said that fund houses have to follow the new circular by January 2021, or otherwise merge their multi-cap schemes with other schemes offered by them.
Sensex and Nifty started the week’s initial trading session with gains but failed to carry that momentum for the entire day, ending the session with losses. S&P BSE Sensex closed 97 points lower while the Nifty 50 was below the 11,450 mark. HCL Technologies, TCS, Infosys, Tech Mahindra were some of the best performing stocks. Some analysts believe that the sell-off could have been aided by the higher valuations, while some think that investors resorted to selling equities as penalty on non-collection of margins during trade would resume soon. Sensex dived nearly 470 points from the day's high.
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Sensex and Nifty dived from day's high post lunch to end the day in the red. Sensex closed 97 points lower while the Nifty 50 index end below the 11,450 mark. Banks and RIL slipped into the red.
Following SEBI’s ruling on multicap funds, the broader markets beat the equity benchmarks BSE Sensex and Nifty 50 today. S&P BSE SmallCap jumped as much as 4.29 per cent to 15,184.11, which is a fresh 52-week high level. In March this year, the SmallCap index plunged to an all-time low of 8622.25 on the back of global uncertainty in the wake of the coronavirus pandemic. Since then, the index has been surging and has rallied around 76 per cent so far.
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The National Stock Exchange so far was not levying a penalty on brokerage firms for non-collection of margins on buy or sell orders. However, the same will be resuming soon. Under this, if a brokerage firm does no collect the 20% margin from clients on all orders, it will be fined.
Divestment-headed Bharat Sanchar Nigam Ltd (BSNL) has started to outsource operations and maintenance work of its customer care amid cash crunch and a shortage of workforce. Cash-strapped BSNL recently saw as many as 78,570 of its employees opt for and retire under the voluntary retirement scheme (VRS), and is now facing acute shortage of staff in circles including Uttar Pradesh, Kerala, Gujarat and Tamil Nadu, The Indian Express cited sources as saying. Most of the BSNL’s customer care services executives had opted for the VRS scheme in October last year. The company is now facing a backlog of repair and maintenance complaints.
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Aashish P Sommaiyaa, the former CEO and MD of Motilal Oswal has joined White Oak Capital Management as their new CEO. "Under his leadership, we shall build a pioneering organisation centered around our performance-first investment culture," White Oak Capital Management said in a release.
Indian Indices Nifty and Sensex up by 95 points (0.80%) and 331 points (0.86%) respectively. Indian broader market opens higher on back of global clues and SEBI circular on multi-cap fund for minimum allocation of Large cap , Midcap and small cap. S&P BSE SmallCap (up 4.15%) and S&P BSE MidCap (up 2.05%) on the back of SEBI circular and continue its positive movement. All sectors are trading in green, led by S&P BSE Information Technology (up 4.49%), S&P BSE CONSUMER DURABLES (up 3.75%) and S&P BSE REALTY (up 4.14%) along with this defensive stock like HCL Technologies (up 10.46%) and Infosys Ltd (up 4.1%) getting in movementum. We expect positive sentiments for midcap small cap will continue and indices to trade in range. Global Market up higher - DOW Jones up by 116.38 points (up 0.42%) and NASDAQ up by 80 points (up 0.73%)," said Yash Gupta - Equity Research Associate, Angel Broking Ltd
"We now expect a larger permanent loss in output of 13% over the next three years. We expect growth of 6.0% in fiscal 2022 and 6.2% in fiscal 2023. Before the pandemic, we expected India's economy to expand 6.5% in the current fiscal year," said S&P Global
India’s wholesale price index rose by a modest 0.16% on-year in August. "The upside surprise in August was driven a broad-based increase in prices, as all major sub-components barring chemicals and textiles recorded sequential price gains," said economists at Barclays.
Broader markets including smallcap and midcap stocks outperformed BSE Sensex and NSE Nifty in today’s trade after SEBI’s ruling that multicap funds must invest at least 25 per cent of their corpuses each in large-caps, mid-caps and small-cap stocks. BSE SmallCap index rallied 4.03 per cent or 587 points to 15,145.42, while the BSE MidCaps managed to gain nearly 2 per cent or 286.91 points to 14,946.53.
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Information Technology giant HCL Technologies saw its share price gaining 12% on Monday morning as the stock hit a fresh 52-week high. The shares of HCL Technologies were seeing growing interest from investors after the company informed stock exchanges about its “meaningfully better” revenue and operating margin for the second quarter of this fiscal year. IT companies have so far fared better than others and is expected to continue on that path with growing demand for digital solutions. The stock price has gained over 97% since March this year when the equity markets witnessed a massive sell-off.
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Tata Consultancy Services (TCS) on Monday became the second Indian firm to attain a market valuation of over Rs 9 lakh crore after Reliance Industries Limited. The company's market valuation went past Rs 9 lakh crore in early trade helped by a rally in its share price.
Rising COVID-19 cases in India will keep private spending and investment lower for longer. S&P Global Ratings now expects the country's economy to contract by 9% in the current fiscal year, which ends March 31, 2021. Our previous forecast put the economic hit from COVID at -5%."One factor holding back private economic activity is the continued escalation of the COVID-19," said Vishrut Rana, Asia-Pacific Economist for S&P Global Ratings.
Infrastructure company Larsen & Toubro (L&T) on Monday said its construction arm has received multiple orders across business segments in the domestic market. The company did not provide the value of the contracts, but said the orders fall under the ‘significant’ category, which ranges between Rs 1,000 crore and Rs 2,500 crore according to the classification of contracts.
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It finally may be go-time for small cap and midcap stocks. The capital market regulator Securities and Exchange Board of India (SEBI) issued a circular last week which is expected to further help the small cap and midcap stocks rally, after having outperformed the benchmarks in the past few months. SEBI’s order wants multi cap mutual fund schemes to invest at least 25% each in small cap, midcap, and large cap stocks. Currently, the majority of the multi cap schemes concentrate on large cap stocks. The new circular, which fund houses have to abide by, might see schemes sell large cap stocks and invest in small cap and midcap stocks; SEBI has listed other options too for mutual funds though. Here are top picks by some of the leading brokerage firms.
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"Fresh Covid-19-related restrictions in some parts of the country slowed the pace of recovery in IIP, which contracted 10.4% yoy in Jul’20. Overall, we believe that production activity is at 87% of the adjusted pre-Covid level. Positive growth was seen in tobacco and pharma products, matching a significant rise in exports," said Emkay Global.
RIL share price hit a fresh record high of Rs 2,360 apiece on BSE, soaring 1.77 per cent in the morning deals. With today’s gain in the stock price, the total market capitalisation of the Reliance Industries Ltd stood at Rs 15.82 lakh crore. The stock surpassed its previous high of Rs 2,343.90, touched on September 10. According to media reports, American private equity company Carlyle may invest $1.5-2 billion to buy a stake in Reliance Retail Ventures Ltd (RRVL).
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Coronavirus Vaccine latest: The Coronavirus vaccine could be available in the US before the end of this year, claimed American pharmaceutical company Pfizer CEO Albert Bourla. Bourla, however, said the availability of the COVID19 vaccine before 2020 would depend upon the safety data and approval from the US regulator Food and Drug Administration (FDA). Pfizer and BioNTech have already announced that a ‘conclusive’ data regarding the safety and efficacy of their Coronavirus vaccine candidate BNT162 is likely to be available by October.
“HCL Tech has provided its mid quarter guidance wherein the company mentioned that they expect the Revenue and the Operating Margin for Q2FY2021 to be meaningfully better than the top end of the guidance that the company had provided in July 2020. The company in its release has highlighted that execution is strong during the quarter to date while deal momentum also remains strong led by Life Sciences & Healthcare, Telecom & Media and Financial Services verticals. The company expects revenue growth for the current quarter to exceed 3.5% quarter on quarter in constant currency, enabled by broad based momentum across all service lines, verticals and geographies while EBIT margin is expected to stay between 20.5% to 21.0% for the quarter. Deal pipeline also remains strong across service lines, verticals and geographies. HCL Tech remains one of our top picks in the IT space given cheap valuations and we maintain our buy rating on the stock," said Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd.
IT major HCL Technologies saw its share price jump almost 7% on Monday mornign to trade at Rs 770.7 per share. The company informed the bourses that the revenue growth for the current quarter is expected to exceed 3.5% quarter on quarter in constant currency, enabled by broad based momentum across all service lines, verticals and geographies.
Sensex and Nifty began Monday’s trading session with gains on the back of strong global cues. S&P BSE Sensex was trading over 250 points higher while the Nifty 50 was just shy of the 11,550 mark. HCL Technologies, HDFC Bank, HDFC, and Tata Steel were the top Sensex gainers. Equity markets saw midcap and smallcap indices outperform the benchmarks. Volatility, after gaining in the initial minutes, slipped marginally. India VIX was still trading above 20 levels. Asian markets were trading higher on Monday morning and the SGX Nifty was also trading with gains.
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Gold prices today edged higher in tandem with Comex gold ahead of a two-day meeting of the Federal Open Market Committee (FOMC). While global prices were flat in today’s trade as optimism around COVID-19 vaccine lifted appetite for riskier assets. On MCX, gold October futures were trading Rs 183 or 0.36 per cent higher at Rs 51,502 per 10 gram while silver December futures were ruling at Rs 68,236 per kg.
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RIL share price hit a fresh record high of Rs 2,360 apiece on BSE, soaring over one per cent in morning trade. The stock surpassed its previous high of Rs 2,343.90, touched on September 10.
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"We're anti-consensus on impact on small caps due to SEBI regulations on multicap schemes. ~55% of value of Multicap funds can possibly reclassify themselves as Large cap funds, Our math based on fund size, large cap exposure, percentage of total AUM," said Amar Ambani Senior President Yes Securities.
Sensex opened over 300 points higher on Monday led by HCL Technologies and the HDFC Twins. Nifty also gained on the opening bell, sitting just shy of the 11,550 mark.
"The 11525 objective discussed on Friday, should be in contention, early today. Infact, the week ahead presents much bigger upside prospects than last week. Base case scenario now sees a revisit of 11760-800 vicinity, with a fair possibility of 12000-12100. Downside marker remains at 11385," said Geojit Financial Services.
S&P BSE Sensex shot up over 200 points in the pre-opening session on Monday monring with HCL Technologies leading the gainers.
Another option that multi cap schemes have in front of them is to merge their schemes with other schemes that the fund house offers. Apart from this they could also let change the nature of their multi cap scheme entirely so that it stays true to the lable.
Multi Cap schemes can now either opt in to the new SEBI circular buy reclassifying their asset allocation to suit the new SEBI rule. This would force them to sell a large number of large cap stocks that they are holding and buy small and midcap stocks instead.
Some of the big names in Multi Cap funds are primarily focused on large cap stocks. Kotak Standard Multicap Fund has an AUM of Rs 29,714 crore and allocated 78% to largecap stocks. HDFC Equity Fund, with and AUM of Rs 19,798 crore has 86% allocation towards large cap stocks.
Multi cap funds have largely been holding large cap stocks for their better performance. As per the current classifications, the top 100 stocks in terms of market cap are categorized as large caps, 101-250 largest stocks in terms of market cap are categorized as mid caps and 251st stock onwards are classified as small caps. The revised list of this categoraization will be provided by SEBI in January 2021. "As per our calculations, adjusted for the cash holdings, the large cap stocks are expected to see an outflow of ~?35,998 crores while the mid cap and small cap stocks are expected to see an inflow of ~?13,145 crores and ~?27,933 crores respectively," said Edelweiss Investor Research in a note.
Investors will also focus on the broader markets after the market regulator Securities and Exchange Board of India (Sebi) on Friday, directed multi-cap funds to invest at least 25 per cent of their corpuses each in large-cap stocks, mid-caps and small-cap stocks. Besides, market participants will also react to IIP data released after market hours on Friday.
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The stock and commodity market regulator, on Sunday said that it will be examining proposals, if any, from the industry. However, in the same circular SEBI said that Mutli Cap scehems have to either comply by the rules or convert their Multi Cap scheme to another scheme category, for instance large cum midcap scheme.
"Multi Cap schemes had flexibility in terms of allocation to Large, Mid and Small Cap stocks. However, it has recently been observed that some Multi Cap Schemes have skewed portfolios, with over 80% of investment in large ca p stocks akin to Large Cap schemes, and some Multi Cap schemes have near zero or insignificant asset allocation to small cap companies," SEBI said in a circular issued over the weekend. Multicap funds have largely been investing in large cap stocks seeking better performance, which pushed the the capital market regulator.
Experts have opined in a mixed fashion about the new SEBI rule. Rajiv Thakkar of PPFAS said that in any multi cap strategy most portfolios would have larger tilts toward the bigger companies, adding that it is the nature of the market.
Multi Cap mutual funds have so far had the option invest in categories across segements. Smallcap stocks made merely 5-15% of these mutlicap funds so far. With the new SEBI circular, that fund houses have to abide by from February 2021, Mutli Cap schemes will have to invest in smallcap stocks a lot more than they like.
The Securities and Exchange Board of India (SEBI) on Friday, asked Mutli Cap Mutual Funds to stay true to the lable and invest 25% in equity and equity related instruments of large cap companies, similarly 25% in midcap companies and 25% in smallcap companies. SEBI has also increased the minimum investment limit in equity & equity related instruments to 75% of total assets.
Multi-Cap funds are one of the biggest in terms of the number of schemes and AuM within equity diversified funds. These funds were preferred by investors because it offered flexibility to fund managers to invest across large, mid, and small-cap based on the opportunity. The allocation in small-cap ranged between 5% - 15% for most of the multi-cap funds. With a minimum of 25% allocation in small-cap, investors may decide to switch their investments into other categories like Large & Mid Cap or Focused. There could also be a possibility of some fund houses shifting their multi-cap fund to other categories. We also need to look at the depth in small-cap companies for mandatory allocation of 25% across all multi-cap funds: Harshad Chetanwala, MyWealthGrowth, a Financial and Wealth Planning Company