Wealth Creators 2008-2018 - II: The Sectors
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In the first part of the Wealth Creators series, published last week, we discussed the top-10 value creators of the past decade. If you missed it, click here to read it. 
 
Amid the market chaos at the start of our study, viz., the historic market lows following the 2008 stock market crash, many stocks were beaten down. Among these, the stocks that rose the highest over the next 10...
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Nifty, Sensex May Head Lower – Weekly Closing Report

We had mentioned in last week’s closing report that Nifty, Sensex might head higher. The major indices of the Indian stock markets were range-bound during the week and closed with minor weekly gains on Friday over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:

 

 
The major indices of the Indian stock markets were range-bound on Monday and closed with gains over Friday’s close. On the NSE, there were 483 advances, 1,298 declines and 308 unchanged.
 
Sensex and Nifty traded on negative note during the afternoon session of the trade over concerns of fiscal slippage and owing to volatility in specific stocks. FMCG (fast moving consumer goods), healthcare and auto stocks witnessed selling pressure, while the key banking and finance stocks reversed early losses and traded in the green. 
 
The stock price of Reliance Communications (RCOM) declined up to 48% after it filed for bankruptcy. Market fears a fiscal slippage because of various announcements in the interim budget, like the higher borrowing programs by the government. The government's estimate of GST collection in FY19 is on the higher side. The nominal GDP growth rate of 11.5% is also difficult to achieve, according to market analysts. In addition the bond market is not happy with the Interim Budget hence having a negative impact on the investors.
 
The major indices of the Indian stock markets were range-bound on Tuesday and closed with minor gains over Monday’s close. On the NSE, there were 548 advances, 1,213 declines and 297 unchanged.
 
Ahead of a three-day RBI monetary policy review meet, set to start later in the day, Sensex and Nifty logged mild gains on Tuesday. Capital goods, FMCG (fast moving consumer goods) and metal stocks declined while energy, IT (information technology) and banking stocks surged. At 2.54 p.m., the S&P BSE Sensex traded 78.22 points or 0.21% up from its previous close of 36,582.74 after touching a high of 36,727.83 and a low of 36,495.83. The broader Nifty traded at 10,935.35, up 23.10 points or 0.21%. Stock-wise, IndusInd Bank, Bajaj-Auto, HeroMotor Corp, Mahindra and Mahindra and Maruti Suzuki gained in the range of 1% to 3%. In contrast, Tata Motors, Tata Motors (DVR), Tata Steel, Coal India and ONGC declined in the range of 1% to 3%.
 
Moody's downgraded the senior unsecured rating for Airtel and backed senior unsecured notes issued by subsidiary Bharti Airtel Int'l (the Netherlands) to 'Ba1', or junk rating, from 'Baa3'. The American rating agency also withdrew the company's 'Baa3' issuer rating and said the outlook was negative.
 
Budget airlines SpiceJet said it will launch a daily non-stop flight service between Hyderabad and Saudi Arabia's Jeddah from March 25. According to the airline, Jeddah will be its ninth international destination and third destination in the Middle East. The airline said that it will service the route using its new 189 seater Boeing 737 MAX aircraft. "The new service will enable SpiceJet to provide over 2500 seats per week on the sector," the airline said in a statement. "To mark this important launch, SpiceJet has announced a special fare of Rs13,499 (all-inclusive) for Hyderabad-Jeddah and Rs10,799 (all inclusive) for Jeddah-Hyderabad."
 
Exide Industries posted a net profit of Rs155.04 crore in the third quarter of the current fiscal, up marginally as against Rs154.27 crore in the same period last year. Its net turnover for the quarter under review was at Rs2,496.84 crore, up by 9.59% from Rs2,278.29 crore in the corresponding quarter of the previous fiscal. The battery maker's Managing Director and CEO G. Chatterjee said that volumes in automotive, motorcycles, UPS and solar batteries in the third quarter have grown quite well. The company is focusing on cost control and technology upgradation as strategies to improve the bottom-line.
 
Amid mixed global markets and healthy quarterly results of index heavyweights, key equity indices by over 1%, during the late afternoon session of the trade on Wednesday. In addition, the equity indices also gained as both the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) were net buyers on Tuesday. FIIs bought stocks worth Rs420.65 crore while the DIIs bought stocks to the tune of Rs194.31 crore.
 
Investors will also be keeping an eye on the Reserve Bank of India's (RBI) bi-monthly monetary policy outcome scheduled on Thursday. Expectations of rate cut along with some healthy quarterly results, lifted the key equity indices on Wednesday. Tata Steel spurted by 4.08% while Bajaj Finance gained 3.54%.
Credit rating company Fitch Ratings has placed India's Tata Motors credit rating on negative watch. The rating agency pointed at increasing risks for Tata Motors’ British luxury car unit - Jaguar Land Rover (JLR) - over a potentially chaotic Brexit. “Trade barriers and logistic issues from a disorderly Brexit could have an impact on JLR’s competitive positioning and lead to significantly lower sales and profitability,” the credit rating agency said.
 
As a part of their asset monetisation plan to repay debt, promoters of Zee Entertainment Enterprises Ltd (ZEEL) are open to sell over 50% of their holdings in the firm and are in talks with more than two investors for the same, a senior company official said.
 
The Indian equity market bounced back into the green, after falling more than 140 points during the late-afternoon trade session on Thursday. The abrupt downfall in the market's trajectory came after both the indices -- S&P BSE Sensex and NSE Nifty50 -- rose on the back of a surprise move by the Reserve Bank of India (RBI) to go for a rate cut. At around 2 p.m., the BSE Sensex traded at 37,100.88 points, higher by 125.65 points or 0.34% from the previous close of 36,975.23 points. It touched an intra-day high of 37,172.18 and a low of 36,915.13. The NSE Nifty50 on the National Stock Exchange traded higher by 36.95 points or 0.33% at 11,101.55, from the previous close of 11,062.45 points. Interest sensitive auto and realty stocks gained around 1%, while the key banking stocks gained 0.50% as a policy rate cut would lead to lower interest rates for loan seekers. 
 
In the final monetary policy review of the current fiscal, the Reserve Bank of India (RBI) on Thursday lowered its key lending rate for commercial banks to 6.25%.The decision was guided on the basis of an assessment of the evolving macroeconomic situation wherein headline inflation is projected to soften further and the economy's growth impulses had moderated, the RBI said. The central bank was more accommodating, changing its monetary policy stance from "calibrated tightening" to "neutral".  
 
Private airline Jet Airways introduced a staggered framework to reward its domestic guests with substantially lower penalties in exchange for advanced intimation for changes in their bookings including cancellations, changes. The new policy would be implemented from February 7. "As part of the new policy, charges for various changes including those for flight, date, sector, booking class, cabin and others and refund penalties for ticket cancellations at least seven days prior to the date of travel would attract lower penalties compared to those who undertake booking changes within seven days," Jet Airways, said in a statement. "The dynamic penalties will reward guests who plan in advance with substantial savings," it added.
 
The benchmark Sensex made losses on Friday owing to a steep decline in auto stocks led by Tata Motors and broadly negative global cues. Apart from realty, teck and telecom stocks all the sectors on the BSE came under heavy selling. Auto stocks declined by 2.75%. Globally, investors reacted negatively after US President Donald Trump said he would not meet his Chinese counterpart Xi Jinping ahead of a trade deal deadline on March 2, when American tariffs on Chinese products were slated to increase. Stock-wise, Kotak Mahindra Bank, Bajaj Finance, HDFC Bank, HCL Tech and Bharti Airtel were the top gainers on Sensex. In contrast, Tata Motors slipped 17.69% while the Tata Motors (DVR) declined over 13%, after the company reported a massive loss in its third quarter results declared on Thursday. Among the other laggards were Vedanta, Larsen and Toubro, Tata Steel and ONGC.
 
Automobile major Tata Motors Group reported a massive net loss of Rs26,961 crore for the quarter ended December 31, 2018. The automobile group had posted a net profit of Rs1,214.60 crore for the corresponding period of the previous year. According to the group, its net profit was impacted by an exceptional item of "Asset Impairment" in JLR (Jaguar Land Rover) worth Rs27,838 crore (3.1 billion pounds). On JLR, it said: "Performance impacted by challenging market conditions particularly in China and inventory corrections. Continue to invest in exciting products and leading edge technologies."  

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Nifty, Sensex May Turn Weak – Thursday closing report

We had mentioned in Wednesday’s closing report that Nifty, Sensex continued to look strong. The major indices of the Indian stock markets were range-bound on Thursday and ended flat. On the NSE, there were 1,001 advances, 730 declines and 329 unchanged. The trends of the major indices in the course of Thursday’s trading are given in the table below:

 

 
The Indian equity market bounced back into the green, after falling more than 140 points during the late-afternoon trade session on Thursday. The abrupt downfall in the market's trajectory came after both the indices -- S&P BSE Sensex and NSE Nifty50 -- rose on the back of a surprise move by the Reserve Bank of India (RBI) to go for a rate cut. At around 2 p.m., the BSE Sensex traded at 37,100.88 points, higher by 125.65 points or 0.34% from the previous close of 36,975.23 points. It touched an intra-day high of 37,172.18 and a low of 36,915.13. The NSE Nifty50 on the National Stock Exchange traded higher by 36.95 points or 0.33% at 11,101.55, from the previous close of 11,062.45 points. Interest sensitive auto and realty stocks gained around 1%, while the key banking stocks gained 0.50% as a policy rate cut would lead to lower interest rates for loan seekers. 
 
In the final monetary policy review of the current fiscal, the Reserve Bank of India (RBI) on Thursday lowered its key lending rate for commercial banks to 6.25%.The decision was guided on the basis of an assessment of the evolving macroeconomic situation wherein headline inflation is projected to soften further and the economy's growth impulses had moderated, the RBI said. The central bank was more accommodating, changing its monetary policy stance from "calibrated tightening" to "neutral".  
 
Along with the lower repo rate, or the RBI's short term lending rate for commercial banks, the central bank's reverse repo rate has been adjusted to 6%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.5%. "Headline inflation is projected to remain soft in the near term reflecting the current low level of inflation and the benign food inflation outlook.  "Beyond the near term, some uncertainties warrant careful monitoring," RBI Governor Shaktikanta Das, who presided over his first monetary policy committee (MPC) meeting said while making the policy review announcement.  "The MPC noted that the output gap has opened up modestly as actual output has inched lower than potential. Investment activity is recovering...but the need is to strengthen private investment activity and buttress private consumption," he said following the meeting that started on Tuesday.  It is vital for the RBI to "act in a timely manner" to support growth, given that inflation continues to remain benign, and in view of the fact that investment demand has decelerated, Das added.  The RBI also revised downwards its consumer price index (CPI), or retail inflation, projection to 2.8% for the ongoing quarter, to 3.2%-3.4% in the first half of the next fiscal and 3.9% in the third quarter of 2019-20, "with risks broadly balanced around the central trajectory". The central bank projected GDP growth to be in the range of 7.2%-7.4% in the first half of the next fiscal beginning April, and at 7.5% in the third quarter "with risks evenly balanced."
 
Two Reliance Jio's group companies shall soon shift their registered headquarters from Maharashtra to Gujarat pursuant to the outcome of an Extraordinary General Meeting (EGM) held here on Tuesday. Reliance Jio Digital Services Ltd. and the Reliance Jio Messaging Services Ltd. - currently based at Maker Chamber IV, Nariman Point in Mumbai, will go to a new location in Gujarat, the sources explained. An EGM on February 5 passed a Special Resolution to the effect for the two companies, by which they will now apply to the Central government under Section 13 of the Companies Act, 2013.  Reliance Industries shares closed at Rs1,288.00, down 1.70% on the NSE.
 
Telecom major Vodafone Idea on Wednesday reported a consolidated net loss of Rs5,004.6 crore for the quarter ended December 31, 2018. This was the first full quarter results for Vodafone Idea after the merger of Vodafone India and Idea Cellular completed in August. The company had reported a net loss of Rs4,973.8 crore during the July-September quarter. 
 
Private airline Jet Airways on Wednesday introduced a staggered framework to reward its domestic guests with substantially lower penalties in exchange for advanced intimation for changes in their bookings including cancellations, changes. The new policy would be implemented from February 7. "As part of the new policy, charges for various changes including those for flight, date, sector, booking class, cabin and others and refund penalties for ticket cancellations at least seven days prior to the date of travel would attract lower penalties compared to those who undertake booking changes within seven days," Jet Airways, said in a statement. "The dynamic penalties will reward guests who plan in advance with substantial savings," it added. Jet Airways India shares closed at Rs237.00, up 0.06% on the NSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 

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