Sensex Ends 110 Points Lower; Smallcap & Midcap Stocks Outperform

Fri, 27 Nov Closing | Yash Vora, TM Team

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Indian share markets witnessed volatile trading activity throughout the day today and ended marginally lower, ahead of Q2 GDP data.

Benchmark indices traded on a volatile note, swinging between gains and losses, following muted trends in Asian peers.

Sentiment was weighed on renewed doubts about a highly-anticipated coronavirus vaccine.

British drug maker AstraZeneca's coronavirus drug was touted as a "vaccine for the world" due to its inexpensive cost, but the efficacy of the vaccine is now facing more intense scrutiny, which experts say could delay its approval.

At the closing bell, the BSE Sensex stood lower by 110 points. The NSE Nifty ended down by 18 points.

Asian Paints was among the top gainers today. Power Grid, on the other hand, was among the top losers today.

SGX Nifty was trading at 13,069, up by 82 points, at the time of writing.

The BSE Mid Cap index ended up by 1.9%. The BSE Small Cap index zoomed 2.4%.

Sectoral indices ended on a mixed note with stocks in the realty sector and consumer durables sector witnessing buying interest. Energy and IT stocks, on the other hand, witnessed selling pressure.

New: 5 Pandemic-Proof Smallcaps You Should Know About...

Market participants were also tracking automobile stocks today ahead of the November month sales numbers, which release next week.

Shares of Cummins India, Tata Motors and TVS Motor Company gained over 5% while Ashok Leyland, Motherson Sumi Systems, Bajaj Auto, Balkrishna Industries, Exide Industries and Amara Raja Batteries from the BSE auto index gained in the range of 3-5%.

Asian stock markets ended on a positive note. Japan's Nikkei stock average ended at its highest since April 1991 as it rallied for the fourth session in a row, buoyed by hopes of economic recovery and strong corporate earnings, after progress in Covid-19 vaccine development.

The rally was driven by progress in vaccine-related developments, with many investors expecting their delivery next year.

Easing US political uncertainty after President-elect Joe Biden's transition to the White House and signs of pick-up in the Chinese economy also lifted sentiment.

As of the most recent closing prices, the Shanghai Composite ended up by 1.1% and the Hang Seng ended up by 0.3%.

US stock futures are trading in green. Nasdaq Futures are trading up by 46 points (up 0.4%), while Dow Futures are trading up by 69 points (up 0.2%).

The rupee is trading at 74.01 against the US$.

Speaking of stock markets, in his latest video, Co-head of Research at Equitymaster, Rahul Shah, discusses the hype around Adani Green Energy and analyses whether it is justified.

Shares of Adani Green have seen a meteoric rise and are up almost 10x in the last one year. The company is now the 17th or the 18th largest company in India by market value.

Rahul discusses whether the company will continue to rise or is it all a big, speculative bubble that can burst any time.

Tune in to the video to find out more:

In news from the commodity space, domestic gold and silver prices traded on a flat note today amid weak global trend.

Gold prices for the latest contract on MCX are trading up by 0.2% at Rs 48,618 per 10 grams.

In the previous session, gold prices had slipped 0.1% while silver had ended flat.

So far this week, gold rates in India have dropped nearly Rs 1,700 per 10 gram, in line with a similar fall in global rates.

In global markets, gold prices edged 0.3% lower to US$ 1,810.44 an ounce.

For the week, gold remains down over 3% as progress in Covid-19 vaccine development and US President-elect Joe Biden's transition to the White House bolstered risk sentiment.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

The recent price volatility in the bullion market has rattled many traders. Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

In his latest video, India's #1 trader, Vijay Bhambwani, talks about the investment case for gold, now that gold prices have started to fall.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

In latest developments from the IPO space, the initial public offering of quick service restaurant chain Burger King India will open on December 2.

The price band for the IPO has been set at Rs 59-60 per share.

The company is aiming to raise Rs 8.1 billion through the issue which comprises a fresh issue of shares worth Rs 4.5 billion, and an offer for sale of up to 60 million shares by promoter entity QSR Asia Pte worth Rs 3.6 billion.

Burger King intends to utilize the fresh proceeds to finance the roll-out of new company-owned Burger King Restaurants and to meet the general corporate purposes.

Burger King was the fastest growing international QSR chain in India during the first five years of their operations, based on the number of restaurants. Their master franchisee arrangement provides them with the ability to use Burger King's globally recognized brand name to grow their business in India.

As per the company's red herring prospectus, the Burger King brand is the second largest fast food burger brand globally as measured by the total number of restaurants, with a global network of over 18,000 restaurants in more than 100 countries and US territories, as of June 30, 2019.

So far this year, 12 companies have raised nearly Rs 250 billion through IPOs compared with Rs 123.6 billion raised by 16 companies in 2019.

Some of the companies that had deferred their IPO plans, now want to tap the market again on robust investor appetite.

How the above IPO sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

Moving on to stock specific news...

Shares of gas transmission companies witnessed buying interest today after oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) notified regulations for unified gas transmission tariff structure.

Oil regulator PNGRB has simplified the country's gas pipeline tariff structure to make fuel more affordable for distant users and to attract investment for building gas infrastructure.

As per reports, the PNGRB has notified regulations for a 'unified' tariff structure for over a dozen pipelines that form the National Gas Grid which will lead to a 20-30% rise in transportation charges paid by users near the source but a reduction for consumers in the hinterland.

Currently, the tariff is levied in proportion to the distance transported - the longer the distance, the higher is the charge. This resulted in consumers away from the coast paying higher charges as compared to those near it.

PNGRB has now notified a two-zone tariff structure - Zone-1 will be 300-km from the source of gas (gas field or LNG import terminal) and Zone-II will be beyond that.

PNGRB said the tariff for the first tariff zone will be 40% of the tariff for the second zone.

Stocks such as Gujarat Gas, Indraprastha Gas, Mahanagar Gas, Adani Gas and Gujarat State Petronet surged in the range of 9-20% on the back of above news.

Moving on to news from the IT sector, Vakrangee was among the top buzzing stocks today.

Shares of the company moved higher by 14% intraday today, surging 28% in the past two trading days, after its board approved the withdrew amalgamation scheme for two wholly-owned subsidiaries due to "substantial changes in the business environment".

In March 2020, the company had filed Scheme Application with National Company Law Tribunal, Mumbai (NCLT) which is presently pending with NCLT to seek appropriate directions.

"Since then, there have been substantial changes in business environment in the last few months and the management of the Company is of the opinion that, considering the present scenario, it would not be prudent to proceed with proposed amalgamation of Vakrangee Logistics Private Limited and Vakrangee Finserve Limited with Vakrangee Limited," Vakrangee said in a regulatory filing.

Vakrangee share price ended the day up by 10.4%.

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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