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Market Updates

Market Ahead, August 9: All you need to know before the Opening Bell



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In today’s session, investors may react to reports that the government may exempt foreign portfolio investors from additional surcharge. Overseas investors have pulled out nearly Rs 22,000 crore from domestic equities since the surcharge decision was introduced in the Union Budget on July 5.

Moreover, Finance minister Nirmala Sitharaman will today meet market participants including senior officials of foreign portfolio investors and mutual funds to ascertain views on current issues relating to financial markets.

Investors will continue to react to June quarter earnings, first the ones declared yesterday after market hours and the 249 others scheduled to be announced today that includes Spicejet, Britannia Industries, MRF, BHEL, and Cadila Healthcare, among others.

Analysts expect SpiceJet to post robust growth in net profit and earnings before interest, tax, depreciation, amortization and restructuring and rent cost (EBITDAR) margin in its Q1FY20 results. You can read our full preview on what analysts expect from SpiceJet’s result on our website.

Apart from this, investors will also track global cues, any progress in monsoon, foreign fund flow, rupee’s trajectory, and oil price movement. They will also look out for the industrial production data for June which is set to be declared later today.

The Sensex rose 1.74 per cent to end at 37,327, while the Nifty50 index gained 1.63 per cent to settle at 11,032 on Thursday.

Now, let’s take a look at the global markets.

The US equities continued to rebound on Thursday. The S&P 500 registered its largest one-day percentage gain in about two months, with the Dow and the Nasdaq also climbing more than 1 per cent each.

Asian shares caught the tail of a Wall Street rally on Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent but was on track to lose 2.3 per cent for the week. Japan’s Nikkei average advanced 0.6 per cent, while Australian stocks stood flat and South Korean stocks gained 1 per cent.

Nifty futures on Singapore Exchange (SGX) were trading 19 points or 0.17 per cent higher at 11,090 levels, indicating a positive start for the Indian market.

And, before we wrap up, here’re the top headlines for the day –

>> The Coffee Day Enterprises board has appointed EY for forensic audit

DHFL has informed the stock exchanges that it may not be able to repay due in the near future

The Ministry of Corporate Affairs has said it would only look at whether the allegations of governance lapses were a management dispute or volation of companies law

The board of Reliance Capital has denied all allegations raised by the erstwhile auditor PricewaterhouseCoopers (PwC) in its letter to the Ministry of Corporate Affairs.

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Market Updates

Govt files IPO document for IRCTC with Sebi, plans to offload 12% stake



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The Indian Railway Catering and Tourism Corporation (IRCTC), the railways’ tourism and catering arm, could get listed as early as this financial year. The centre on Thursday filed IRCTC’s draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi).

Market sources say the government plans to offload around 12 per cent stake through the IPO. The share sale could fetch between Rs 500 crore and Rs 600 crore and help the government with its disinvestment target.

IDBI Capital, SBI Capital Markets and Yes Securities will handle the share sale.

According to the DRHP filed by it, IRCTC is the only entity authorised by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India. The Central Public Sector Enterprise has also diversified into other business segments like e-catering, executive lounges and budget hotels.

IRCTC operates one of the most transacted websites,, in the Asia-Pacific (APAC) region with transaction volume averaging at 25 million per month and 7.2 million logins a day. Over 1.4 million passengers travel on a daily basis of which 71.42 per cent book their tickets online. Between FY14-19 online bookings have grown at an annual rate of 12.5 per cent.

At a premium of only 49 paise, IRCTC offers an optional travel insurance between Rs 0.75 million – Rs 1 million to its passengers. As of June 30, 2019, over 900 million passengers have opted for this travel insurance.

Though the listing of IRCTC was planned earlier, it was postponed due to the waiver of service charge on e-ticketing by the government, after demonetisation, that wiped out Rs 500 crore in annual revenue for IRCTC. Later, the finance ministry had partially reimbursed this.

The company, however, improved its finances later through utilising the website for advertising, data monetisation, e-auctioning and retail management. It also saw an increase in revenue from its catering business and sale of Rail Neer (the bottled water brand of IRCTC) in last two years.

IRCTC’s proposed IPO will follow that of railway PSU Rail Vikas Nigam (RVNL). The centre had raised Rs 480 crore by selling 12 per cent in RVNL in April. In September 2018, the government had launched the IPO of another railway PSU IRCON International, through which the centre had raised Rs 470 crore by selling 10.5 per cent.

Shares of RVNL currently are trading 20 per cent above their issue price, while Ircon shares are 25 per cent below their IPO price.

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Market Updates

324 stocks hit lower circuit on BSE; Reliance Capital tumbles 24% intra-day



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Over 300 stocks were frozen in their respective lower circuit band on the BSE on Thursday amid a sharp sell-off in equities with the benchmark indices falling over 1.50 per cent on Thursday.

As many as 324 stocks or 12 per cent of the total 2,597 traded stocks on the BSE were locked in the lower circuit and saw only sellers on these counters today. Of these, around 104 stocks belonged to the ‘X’ group, 81 stocks were from XT group, followed by B group (67), T group (44) and Z group (16), the exchange data shows.

Eight stocks – Thomas Cook India, Sterlite Technologies, CG Power and Industrial Solutions, Eveready Industries, Jet Airways India, Bliss GVS Pharma, Reliance Communications and Indiabulls Integrated Services – from the S&P BSE 500 index hit their respective lower circuits during the day.

“The delay in addressing concerns of foreign investors regarding taxation and slowdown in the economy is seeing foreign selling continue with over US$2.5 billion being the collateral damage since the budget,” IIFL Securities said in a client note.

Thomas Cook India (Rs 129), Sterlite Technologies (104) and Housing Development and Infrastructure (Rs 7) were frozen at 20 per cent lower circuit limit on the BSE.

Reliance Capital tanked 24 per cent to Rs 30 in the intra-day trade. It finally settled 20 per cent lower at Rs 32 on the BSE. Stocks trading on future & option (F&O) segment, don’t have any circuit limits.

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Market Updates

Market Ahead, August 22: All you need to know before the Opening Bell



Markets, Investors, Indices, Stocks

Investors are expected to react to market regulator Sebi’s board decision to ease requirements for foreign portfolio investors (FPIs).

The regulator said FPIs would no longer be required to meet the ‘broad-basing’ criteria, under which at least 20 investors were required to establish a fund. It also said, it would rationalise the framework for issuance of participatory notes (P-notes), an instrument once very popular with overseas investors.

That apart, market participants will take cues from the minutes of the RBI’s August monetary policy committee (MPC) meet released yesterday that showed that all three internal members had voted unanimously for a cut of 35 basis points to support economic growth.

Besides, global cues, rupee trajectory, foreign fund flow, stock-specific action, and oil price movement would be on investors’ radar.

Now, let’s see what global markets indicate for Sensex and Nifty.

Asian shares edged higher on Thursday, taking cues from gains in the US stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1%, Japan’s Nikkei added 0.4% and Australian shares 0.3%.

At 8:00 am, SGX Nifty, the Singaporean Exchange for Nifty Futures, was down 22 points, indicating a flat to negative start for domestic indices.

On Wednesday, the Sensex settled 0.72 per cent lower at 37,060 level, and the Nifty50 closed at the 10,919-mark, down 0.89 per cent.

The Rupee closed at 71.55, up 16 paise against the US dollar.

And, before we wrap, here’s a look at the top headlines that are likely to move markets–

>> The government, on Wednesday said, it has set no deadline to ban the production of petrol, diesel vehicles or for automobile manufacturers to switch to EVs

>> Government, on Saturday, is expected to hold meeting with economists to discuss economic slowdown.

At last, stock recommendation for the day by Tradebulls Securities–

The brokerage recommends selling Tata Steel at current levels. The stock is expected to drift lower till Rs 321 price confluence zone. Hence, the stock can be sold with stop above previous sessions high of Rs 358.

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