Todays Market from Equitymaster http://www.equitymaster.com/tm.asp The happenings in the stock markets, including a pre-open and closing commentary. Todays Market from Equitymaster http://www.equitymaster.com/icons/eqtm_small1.gif http://www.equitymaster.com/tm.asp http://blogs.law.harvard.edu/tech/rss Sensex Trades Higher; Infosys & M&M Top Gainers http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Sensex-Trades-Higher-Infosys--MM-Top-Gainers
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Indian share markets continue to trade higher during the morning trade. Gains are largely seen in stocks from consumer durables sector and information technology sector. Meanwhile, metal stocks and realty stocks are trading in the red.

The BSE Sensex is trading higher by 87 points and the NSE Nifty is trading higher by 38 points. The BSE Mid Cap index and the BSE Small Cap index both are trading up by 0.6%. The rupee is trading at 64.79 to the US$.

Notably, The S&P BSE Midcap and the S&P BSE Smallcap indices have hit their respective new high on the BSE today, following an extending rally in infrastructure, auto ancillary, education, textiles and public sector banks.

The Smallcap index hit a new high of 18,064 points, while the Midcap index touched a fresh high of 16,937 points on the BSE in intra-day trade. Both these indices surpassed their previous high of 18,032 points and 16,850 points, respectively, touched on 7 November 2017 in intra-day trade.

Are these a sign of changing times?

Traditionally, investors held onto their 'safe' stocks, i.e. the Tata's, Maruti's, TCS, Infosys... and held on to them for life. These large caps provided a certain sense of comfort, reliability even during tough times for the market.

The BSE Small Cap Index has returned 21.7% in FY18 compared to 12.5% by BSE 100 and 11.7% by the Sensex.

Small Caps - Outperformers in Current Financial Year

However, as per Tanushree Banerjee, Co-head of Research, it is important to understand the highly volatile nature of these stocks. Here's an excerpt of what she wrote in the recent edition of The 5 Minute WrapUp:

  • "While there, undoubtedly, lies hidden opportunities in the small cap space, it is important to focus on fundamentals of these stocks. Next, assess if they have the potential to move on to the 'Safe stock' category in the future."

At Equitymaster, our approach of selecting safe stocks can comfortably turn few of them into multibbaggers in few years. Click here to know everything that you need to know right now about safe stocks...

In the news from the global markets. The ECB minutes overnight showed the majority on the governing council believe it is appropriate to proceed very gradually with forward guidance in relation to Quantitative Easing (QE), but that opposition was rising to extending the program.

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One shall note that, the ECB last month announced it would halve its bond purchases to 30 billion euros (US$36 billion) a month from January as the eurozone recovery gathers pace.

That reflected the euro zone's best economic performance in a decade. But the ECB has also extended the scheme by nine months, since inflation is still barely rising.

The extension went down well with bond markets, where borrowing costs have been underpinned by ECB bond-buying.

Further, policymakers said the purchases would continue until at least September 2018, and beyond if necessary, reassuring markets that the ECB stood ready to ramp up efforts again if needed.

The debate highlights the split in the Governing Council and suggests that any further extension of the asset purchase scheme would run into opposition, even if inflation will miss the ECB's target of almost 2% for years to come.

Moving on to the news from pharma sector. As per an article in a leading financial daily, Cadila Healthcare's wholly owned subsidiary -- Zydus Pharmaceuticals (USA) has received the final approval from the United States Food & Drug Administration (USFDA) to market Minocycline Hydrochloride.

The tablets are launched in the strengths of 45 mg, 80 mg, 90 mg, 105 mg, and 135 mg. Zydus also received the tentative approval for Minocycline Hydrochloride Extended-Release Tablets, 55 mg, 65 mg, and 115 mg.

The Tablets are a tetracycline-class drug, indicated to treat only inflammatory lesions of non-nodular moderate to severe acne vulgaris in patients 12 years of age and older. It will be produced at the group's formulations manufacturing facility at Moraiya, Ahmedabad.

The group now has more than 170 approvals and has so far filed over 310 ANDAs since the commencement of the filing process in FY 2003-04.

Cadila Healthcare share price was trading up by 0.5% at the time of writing.



This article (Sensex Trades Higher; Infosys & M&M Top Gainers) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Fri, 24 Nov 2017 06:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Sensex-Trades-Higher-Infosys--MM-Top-Gainers
Sensex Opens in Green; IT & Capital Goods Sector Lead http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Sensex-Opens-in-Green-IT--Capital-Goods-Sector-Lead
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Asian stock markets are lower today as market participants viewed Chinese shares with caution after their big fall the previous day. The Shanghai Composite is off 0.32% while the Hang Seng is down 0.40%. The Nikkei 225 is trading down by 0.34%. On Thursday, the US markets were closed on account of Thanksgiving holiday.

Back home, India share markets have opened the day on a positive note. The BSE Sensex is trading higher by 84 points while the NSE Nifty is trading higher by 24 points. The BSE Mid Cap index and BSE Small Cap index opened the day up by 0.3% & 0.4% respectively.

Barring realty stocks and metal stocks, all sectoral indices have opened the day in green with capital goods sector and information technology sector witnessing maximum buying interest. The rupee is trading at 64.79 to the US$.

Telecom stocks opened the day on a mixed note with ADC India Communication & Tata Teleservices leading the gains. As per an article in a leading financial daily, Bharti Airtel is interested in buying select spectrum and some equipment of Reliance Communications (RCom) under a process being run by its lenders to sell assets of the telco piece by piece and recover some portions of the roughly Rs 450 billion that it owes them.

Reportedly, the sale process could thus see Airtel vying with Reliance Jio for the spectrum in the 850 MHz band considered highly efficient for 4G services - with the proceeds going to the lenders.

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The sale of RCom's assets, including spectrum, network equipment and fibre, has evoked interest of many of the companies in the sector, including from tower providers like Indus, Bharti Infratel and Canada's Brookfield for towers.

One shall note that, the whole telecom business has been an underwhelming story so far. While the telecom subscriber base has increased from 300 million in 2008 to 1.2 billion in 2017, investors have little to cheer.

The BSE Sensex has gone up 3.25 times in nine years, but the BSE Telecom Index has not moved an inch from its levels of 2008.

Telecom Sector: A decade of Underperformance

Telecom companies are straddled with high debt, intense competition, and lack of pricing power. High spectrum costs and regulatory issues have hampered the sector.

While consumers have benefited from low costs and new players fighting for their share, investors have suffered.

Going forward, whether the situation will change in the future will be the key thing to watch out for.

Bharti Airtel share price opened the day up by 0.5%.

Moving on to the news from pharma sector. As per an article in a leading financial daily, Biocon Ltd launched biosimilar bevacizumab.

The drug is used to treat several types of cancer, under the brand name Krabeva in India, at Rs 24,000 for 100 mg/4 ml vials and Rs 39,990 for 400 mg/16 ml vials. Krabeva is Biocon's second biosimilar for cancer treatment introduced in India.

Currently, bevacizumab is sold in India by innovator Roche under the name Avastin and biosimilar versions of the drug by Intas Pharmaceuticals Ltd, Hetero Healthcare Ltd, Cadila Healthcare Ltd and Lupin Ltd, the reports noted.

Reportedly, the market size for bevacizumab, including biosimilars, is estimated at Rs 1.8 billion. Further, Bevacizumab's October 2017 MAT value for the 100mg/4ml dosage sold through regular retail channels like pharmacies is around Rs 487 million.

One shall note that, Biosimilars and Biologics are burgeoning sectors in 2017 also major scientific and technological advances, coupled with socio-demographic changes and increasing demand for medicines will revive the pharma industry's fortunes in another 10 to 20 years.

But given the complexity of biologics, will Indian companies be able to break some ground in this space? (Subscription Required). Going forward, whether the monetization of biosimilars prove to be a big growth driver for the company will be the key thing to watch out for.

Biocon share price opened up by 0.8%.



This article (Sensex Opens in Green; IT & Capital Goods Sector Lead) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Fri, 24 Nov 2017 04:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Sensex-Opens-in-Green-IT--Capital-Goods-Sector-Lead
Insurance Stocks Tumble on Fears of Higher Tax; ECB Minutes in Focus; & Other Top Cues in Action Today http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Insurance-Stocks-Tumble-on-Fears-of-Higher-Tax-ECB-Minutes-in-Focus--Other-Top-Cues-in-Action-Today
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On Thursday, Indian share markets ended flat with the Nifty settling below 10,350 as the market consolidated in want of fresh triggers after the September quarter earnings season wound down. At the closing bell, the BSE Sensex closed higher by 27 points and the NSE Nifty finished higher by 6 points.

BHEL, Infosys and Sun Pharma were the top gainers on both indices, while Dr. Reddy's Lab, Bajaj Auto and Adani Ports were the top losers.

Top Cues in Action Today

Cadila Healthcare share price will be in focus today after its subsidiary Zydus Cadila received approval from the US health regulator to market Tadalafil tablets, used for the treatment of erectile dysfunction, in the American market.

Indian Bank share price will hog limelight today after it received approval to raise capital by way of issue of equity shares pursuant to a Qualified Institutional Placement (QIP) subject to the receipt of the approval from Government of India on 20 November 2017.

Monsanto India Ltd reported a loss of Rs 63.9 million in the quarter ended 30 September, compared to a profit of Rs 27.9 million in the same quarter last year. Revenue from operations stood at Rs 960 million, down from Rs 1020 million a year ago.

Tata Consultancy Services (TCS) has entered into partnership with Eastern Communications for OSS/BSS transformation. Eastern Communications chose TCS as strategic partner to replace its B2B segment offerings.

Welspun Corp. Ltd received a contract to provide 392K MTs pipes for a water project in MENA region.

Just Released: Multibagger Stocks Guide
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Global Stock Market Drivers

Overseas, Chinese shares tumbled with the blue-chip index suffering its worst fall in nearly 1-1/2 years as worries about a sell-off in the bond market bled into equities.

Asian stock markets ended mostly lower on Thursday with the overnight flat close on Wall Street and the likelihood of a rate hike in the US in the foreseeable future prompting investors to tread cautiously.

Meanwhile, European stocks took their cue from a slide in Chinese equities, heading lower in a trading day likely to be thin on volumes because of the US Thanksgiving holiday. The dollar steadied after tumbling on Wednesday in the wake of more dovish than expected Federal Reserve minutes.

Here are some key events scheduled for the remainder of the week:

  • Minutes from the ECB's October meeting due, which could show dissent in the discussion about tapering.
  • New Zealand October trade and South Korea November consumer confidence are due today.
  • South Africa's central bank will announce its key lending rate.

Bulk & Block Deals

On Thursday, IT stocks were among the major gainers, with Infosys Ltd rising as much as 2.9%. Over half a million Infosys shares changed hands in block deals on the NSE.

Our team of Equitymaster analysts have been working on a project to track the smartest minds in value investing. They have compiled a special report on them, called The Superinvestors of India.

Now, because of insights from these interactions, the team has glued their eyes on insider activity and bulk and block deals...

As per them...

Insurance Stocks Tumble

Insurance stocks took a beating on Thursday after the Finance Ministry formed a task force to study and submit a report on redrafting of the direct tax code within six months.

HDFC Standard Life Insurance share price dropped 5%, while ICICI Prudential Life Insurance share price slipped 3.6%, SBI Life Insurance share price 2.7% and ICICI Lombard General Insurance share price 1%.

Insurance actuaries are currently building in tax rate of 14.3%. The increase in tax rate will have one-time impact on EV (embedded value) and going forward lower NBAP margins. NBAP is new business achieved profit.

Our big-picture editor, Vivek Kaul, recently penned a pertinent report on entire insurance industry. We strongly recommend you go through the full report on what's really happening in the insurance industry in India...and how it affects you. If you have not accessed Vivek Kaul's Letter yet, sign up here.

By the way, we have also prepared a guide to help you understand the valuation of insurance businesses.

Oil Prices Ease

Oil prices eased on Thursday, with US crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a drawdown in fuel inventories continued to bolster markets despite worries over rising output.

US West Texas Intermediate (WTI) crude futures were at US$57.89 a barrel down 0.2%, from their last settlement, but still close to 2015-highs of US$58.15 a barrel reached on Wednesday. Brent crude futures LCOc1 were at US$63.14 per barrel, 0.3%, below their last close.

To keep a tab on the movements in crude oil and other commodities, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.



This article (Insurance Stocks Tumble on Fears of Higher Tax; ECB Minutes in Focus; & Other Top Cues in Action Today) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Fri, 24 Nov 2017 03:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=11/24/2017&title=Insurance-Stocks-Tumble-on-Fears-of-Higher-Tax-ECB-Minutes-in-Focus--Other-Top-Cues-in-Action-Today