Sensex Opens Flat; Tata Steel & JSW Steel Top Gainers

Fri, 25 Jun 09:30 am | Yash Vora, TM Team

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Asian stock markets are trading on a positive note today after US shares hit a record on a bipartisan US$ 579 bn US infrastructure deal that stoked economic optimism.

The Hang Seng and the Shanghai Composite are up by 0.6% and 0.3%, respectively. The Nikkei is trading up by 0.7%

In US stock markets, Wall Street indices finished at fresh record high, fueled by supportive US jobless claims data and a breakthrough in infrastructure spending talks in Washington.

President Joe Biden on Thursday embraced a bipartisan Senate deal to spend hundreds of billions of dollars on infrastructure projects, building roads, bridges and highways in an expanded effort to stimulate the American economy.

The Nasdaq Composite added 0.7%, while the Dow Jones Industrial Average rallied 1%.

Back home, Indian share markets have opened on a flat note, following the trend on SGX Nifty.

Market participants will track shares of Finolex Industries, Indraprastha Gas, and RailTel Corporation of India, as these companies are scheduled to release quarterly earnings today.

The BSE Sensex is trading up by 91 points. Meanwhile, the NSE Nifty is trading higher by 30 points.

Tata Steel is among the top gainers today. Reliance Industries, on the other hand, is among the top losers today.

The BSE Mid Cap index and the BSE Small Cap index have opened higher by 0.5% and 0.4%, respectively.

Sectoral indices are trading mixed with stocks in the metal sector and capital goods sector witnessing buying interest.

Energy stocks, on the other hand, are trading in red.

Shares of Bajaj Finserv and Tech Mahindra hit their 52-week highs today.

The rupee is trading at 74.16 against the US$.

Gold prices are trading up by 0.1% at Rs 46,906 per 10 grams.

Meanwhile, silver prices are trading up by 0.3% at Rs 67,910 per kg.

Speaking of the current stock market scenario, note that the BSE Smallcap index has rebounded sharply from the March 2020 lows.

Despite the index being up 1.5 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

As can be seen from the chart above, the rebound in the smallcap index at 157% is way below past rebounds which have ranged from 210% to 293%.

Here's what Richa wrote in a recent edition of

• There's consolidation happening in the smallcap space. The survivors and resilient players are not just see fundamental upside but are also likely to get rerated.
  
  But there is more to stock markets than smallcaps.
  
  And it will be good to see how different stock classes are stacked against each other.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

In news from the finance sector, LIC Housing Finance is among the top buzzing stocks today.

Life Insurance Corp (LIC) will infuse equity capital worth about Rs 23.3 bn in its subsidiary LIC Housing Finance by picking up an additional stake in the company.

LIC Housing Finance will issue shares at Rs 514.25 apiece to its promoter LIC on a preferential basis.

Last week, the company's board in its meeting, had approved preferential shares up to 4,54,00,000 through a private placement to LIC.

The issue price of the equity share of the face value of Rs 2 each shall be Rs 514.25 apiece, which is the price calculated as per market regulator's regulations, 2018, LIC Housing said in a regulatory filing.

LIC's shareholding in the housing financier post the allotment of shares will go up to 45.24% from over 40.31% currently.

The company will seek shareholders' nod for the preference issue to LIC in its extraordinary general meeting next month on 19 July.

LIC Housing Finance share price has opened the day up by 2.8%.

Speaking of stock markets, in his latest video, Rahul Shah compares the stocks of CARE Ratings and CRISIL and which has given better returns over the last 12-15 months.

Tune in to the below video to find out more:

Moving on, ,the Reserve Bank of India (RBI) yesterday tied down a non-banking financial company's (NBFC's) ability to pay dividends to certain factors, including how much bad debt it has in its books and whether it has declared it correctly.

The dividend ratio is now capped at 50 to 60% depending upon the nature of the business.

The RBI said that any extraordinary income in the year has to be excluded from profits to arrive at the dividend ratio.

Before declaring dividend, the company's board has to ensure that the regulator has not found any under reporting of non-performing assets (NPAs).

Also, the NPAs satisfied by the RBI and auditors, have to be below 6% for three consecutive years.

Adding more measures, the NBFC should have the minimum capital adequacy ratio, which would be at least 15%, in those three years.

This won't be applicable for NBFCs that do not take public deposits and also do not have a customer interface.

The central bank said the new norms would infuse greater transparency and uniformity in practice.

Note that the above measures for dividend payout came within a few weeks of the central bank's norms on auditor appointments. NBFCs are against the auditor appointment move, but the central bank has remained adamant.

However, experts say that there may not be much resistance on the dividend payment front, as there is no reason not to link dividends with future goals and having a clean account.

We will keep you updated on the latest developments from this space. Stay tuned.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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