Sensex Opens Lower Tracking Weak Global Cues; ICICI Bank & Axis Bank Top Losers

Mon, 21 Dec 09:30 am | Yash Vora, TM Team

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Asian share markets slipped in early trade today as investors gave a cautious welcome to the US stimulus bill news, meanwhile Brexit talks dragged on with no agreement in sight.

The Nikkei is trading lower by 0.6% and the Hang Seng is trading down by 0.2%.

US stock markets edged lower on Friday but notched weekly gains, as investors tracked developments on a coronavirus aid package.

At close on Friday, the Dow Jones Industrial Average stood lower by 0.4% while the Nasdaq ended on a flat note.

The Dow gained 0.4% last week while the Nasdaq added 3.1% during the same period.

Back home, Indian share markets have opened on a negative note, following the trend on SGX Nifty and as several European countries closed their borders to the United Kingdom as the country entered a tougher lockdown to fight a new strain of coronavirus.

The BSE Sensex is trading down by 188 points. Meanwhile, the NSE Nifty is trading lower by 63 points.

L&T is among the top gainers today. ICICI Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened down by 0.5%. The BSE Small Cap index is trading down by 0.4%.

Barring energy stocks, all sectoral indices are trading on a negative note with stocks in the metal sector and banking sector witnessing most of the selling pressure.

Shares of Shipping Corporation and Laurus Labs hit their 52-week highs today.

The rupee is trading at 73.57 against the US$.

Gold prices are trading up by 0.8% at Rs 50,680 per 10 grams.

In one of his videos, India's #1 trader, Vijay Bhambwani shares his view on gold and silver for the coming year.

In the video, Vijay explains the reasons behind staying positive on these assets.

Tune in here to find out more:

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

Speaking of stock markets, note that since the lows in March 2020, the smallcap index has gained 98%.

While caution is indeed warranted, Richa Agrawal, Research Analyst at Equitymaster, thinks there is still a lot more steam left to this smallcap rally.

Here's what she wrote in a recent edition of Profit Hunter...

• For one, the gap between Sensex and smallcap index is still huge.
  
  In January 2018, the smallcap to Sensex ratio was 0.57 times, versus a long term average of 0.44 times.
  
  At present, this ratio stands at 0.37 times, well below the long-term average.
  
  The possibility of a convergence between growth and value is a lot higher in the smallcap space, than in the large caps.
  
  And then here are some other interesting facts.
  
  Historically, the smallcap index, after a sharp correction, has risen up to 300%.
  
  So far, the smallcap index is up 98% since March. If you have not joined this rally yet, it might still not be too late.

The above observations have served Richa's smallcap service Hidden Treasure well. Her first batch of essential stock recommendations have offered robust returns so far, as can be seen in the chart below:

While the margin of safety in valuations has come down in these stocks, Richa has recently added another stock to this list.

This company is the world's largest player in a niche segment and its product falls in the essential category. This global leader enjoys unique competitive advantages that are hard to replicate by its peers.

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In latest developments from the IPO space, Antony Waste Handling Cell's Rs 3 billion initial public offer (IPO) opened for subscription today.

The IPO will be open for three days i.e. December 21-December 23.

The company has fixed price band for its public issue at Rs 313-315 per share.

SHOCKING: The Secret Profit-Potential of Investing in "Safe Wealth Creators"

Ahead of the IPO, the company garnered Rs 899.9 million from 10 anchor investors at an upper end of price band. Massachusetts Institute of Technology was the top anchor investor, accounting for 44.44% of the total anchor allotments.

Note that Antony Waste Handling is launching its IPO for the second time this year, after having to withdraw its maiden attempt in April due to tepid investor response amid the Covid-19 outbreak.

In other news, Hyderabad-based precision engineering solutions company MTAR Technologies has filed draft red herring prospectus with the capital market regulator for its IPO.

The IPO consists of a fresh issuance of 4 million shares and an offer for sale of 82,24,270 equity shares by promoter and existing shareholders.

MTAR is likely to raise approximately Rs 6-6.5 billion through its IPO, according to market sources.

How the above IPOs sail through remains to be seen.

Moving on to stock specific news...

DHFL is among the top buzzing stocks today.

The race to acquire bankrupt Dewan Housing Finance Corporation (DHFL) has intensified with top bidders Oaktree Capital Management and Piramal Group offering to sweeten their bids as the sale process entered final negotiations.

The bidders agreed to improve their proposals after the committee of creditors (CoC) to DHFL found the offers of Oaktree and Piramal in the fourth round of bidding equally competitive.

In the latest meeting with the lenders on 18 December, Piramal group proposed to invest an additional Rs 40-50 billion in DHFL if it wins the bid.

Piramal had bid Rs 322.5 billion in the fourth round, slightly lower than Oaktree's bid of Rs 327 billion.

Oaktree has also agreed to ease one of the key conditions in its bid. It has offered to specify the period of the holdback of Rs 15 billion for meeting potential contingencies arising from DHFL's life insurance business.

The lenders will put the two offers to vote on Wednesday to select the new owner of DHFL, which will also be forwarded to NCLT for approval.

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

Apart from DHFL, market participants are also tracking AU Small Finance Bank share price.

Redwood Investments, an entity owned by Warburg Pincus, sold more than 10 million shares of AU Small Finance Bank worth over Rs 12.5 billion through an open market transaction on Friday.

As per the bulk deal data available on the BSE, Redwood Investments offloaded 13.7 million shares of AU Small Finance Bank at an average price of Rs 910.55 apiece.

In a separate transaction, Westbridge AIF I purchased 5.95 million shares of AU Small Finance Bank at an average price of Rs 911.37 per share.

Note that earlier this year in July, Warburg Pincus sold 6.92 million shares, or a 2.26% stake, in the bank at an average price of Rs 746.40, aggregating to Rs 5.2 billion.

In August 2018, Warburg Pincus had sold 24 million shares, or 8.27% stake in the bank at an average price of Rs 638.

AU Small Finance Bank share price has opened the day up by 0.2%.

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!

Indian Share Market Update: Top Gainers and Losers

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