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 Smallcaps end deep in the red http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Smallcaps-end-deep-in-the-red
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The Indian equity markets continued to trade weak in the latter half of the day, remaining at lower levels touched during the post afternoon session. While the BSE Sensex today closed lower by by 175 points, the NSE-Nifty closed lower by 47 points. Midcaps and Smallcaps fared worse. While the BSE Mid Cap index closed lower by 1.3%, the BSE Small Cap index closed the day lower by almost 2%. Realty and metal stocks were the biggest losers today.

As regards global markets, Asian indices closed on a mixed note today, with the Japanese and Chinese markets topping the list of gainers. The Singapore market was amongst the losers. The rupee was trading at Rs 60.14 to the dollar at the time of writing.

Media stocks closed the day with more on the losing side than gaining, with NDTV and Deccan Chronicle seeing the most losses. Zee Entertainment has announced its results for the first quarter of the financial year 2014-15 (1QFY15). Zee's sales grew by 11.6% YoY in 1QFY15. The growth in sales was driven by a 17.4% YoY growth in revenues from advertising; while subscription revenues grew by an anemic 4.4% YoY. The company failed to curtail its overall operating costs, causing a fall in EBITDA margins from 30% in 1QFY14 to 28.5% in the quarter gone by. This restricted operating profit growth to just 6.1%; which is significantly lower than the sales growth. Other income for 1QFY15 also fell by 46% YoY. Further, depreciation costs also saw a sharp rise of 126% YoY. These factors put together led to profit after tax falling by 6.3% YoY as compared to the last year's corresponding quarter. The stock of Zee Ent. closed the day lower by 3.5%.

Steel stocks ended the day on a weak note today. Except for Tata Sponge, which bucked the broader sectoral trend, almost all steel stocks registered losses in the region of 3-5% today. Tata Steel raised US$1.5 bn (Rs 90 bn) via dollar denominated bonds recently. The money is being raised to refinance high cost Rupee loans. It may be noted that the company has to repay Rs 330 bn worth of Rupee loans in the next 18 months. And in order to fund the same it is raising low cost money from foreign markets. Apart from US$1.5 bn which it raised recently, the company also plans to raise another US$ 5.6 bn (Rs 336 bn) in multiple currencies over the coming months. If the fund raising exercise culminates Tata Steel will be able to replace its high cost Rupee loans with low cost dollar debt. It may be noted that acquisition of Corus in 2007 coupled with the expansion plans which the company undertook since then saw its debt pile up by about 3 times. Since then it has been reeling under high debt and interest cost pressures. Replacing rupee loans will at least help the company on the debt servicing front.

This article (Smallcaps end deep in the red) 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, 25 Jul 2014 10:30:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Smallcaps-end-deep-in-the-red
Mid, smallcap stocks biggest losers http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Mid-smallcap-stocks-biggest-losers
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Indian stock markets continued its southward journey below the dotted line during the previous two hours of trade led by heavy selling activity across sectors. Selling pressure is led by stocks from realty and power sectors, whereas healthcare and FMCG stocks are trading firm.

The BSE-Sensex is trading down 207 points and the NSE-Nifty is trading down 67 points. The BSE Mid Cap index is trading down 1.8% and the BSE Small Cap index is trading down 2.4% today. The rupee is trading at 60.14 to the US dollar.

Food & tobacco stocks are trading on a mixed note today. While GSK Consumers is leading the pack of a few gainers, Tata Global Beverages and Ruchi Soya are trading weak. As per a leading business daily, FMCG major ITC plans to lay greater emphasis in supplying its FMCG products directly to retailers in a move to revitalize its distribution strategy. As such, the company targets to reach out to 1 lakh villages that accounts for 80% of India's rural consumer goods consumption. This will enable ITC to directly reach out to retailers bypassing wholesalers and stockists. The company's rural push matches the scale of market leader HUL, which launched an initiative of Perfect Village last year and covered 8,500 villages. It may be noted that ITC has been focusing on the consumer good segment in line with the company chairman's vision to turm the company in to the nation's largest FMCG company. As such, its FMCG business broke even during FY14. ITC is trading higher by 0.2%

Majority of the domestic pharma stocks are trading in the green led by Sun Pharma and J B Chemicals whereas Panacea Biotech and Piramal Enterprises are among major losers. As per a leading financial daily, Ranbaxy Laboratories has signed a licensing agreement with Cipher Pharmaceuticals for exclusive marketing, selling and distributing the latter's isotretinoin capsules in Brazil. Ranbaxy is already distributing Cipher's isotretinoin product in United States under the brand Absorica. Isotretinoin is used in the treatment of severe recalcitrant nodular acne. Ranbaxy will be responsible for obtaining regulatory approval for the product in Brazil which will be promoted through a brand dermatology division. As per the terms of the agreement, Cipher will receive an upfront payment as well as pre-commercial milestone payments. Ranbaxy stock is currently trading up by 2.4%.

This article (Mid, smallcap stocks biggest losers) 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, 25 Jul 2014 08:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Mid-smallcap-stocks-biggest-losers
Indian markets continue to slide http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Indian-markets-continue-to-slide
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Backed by heavy selling activity across the indices, the Indian stock markets have remained have remained below the dotted line during the morning trading session. Barring stocks from FMCG and healthcare sectors, all the sectoral indices are witnessing selling pressures. Stocks from IT and Metal sectors are the leading losers.

The BSE-Sensex is trading down 106 points. The NSE-Nifty is trading down 33 points. The BSE Mid Cap index is trading down 0.62% and the BSE Small Cap index is trading down 1.05%. The rupee is trading at 60.02 to the US dollar.

Modi government seems to be facing tough time day by day. As per the financial daily, India's Human Development Index (HDI) has remained in the doldrums for yet another year. The United Nations Development Program (UNDP) has released its 2014 HDI report. India's rank has remained static at 135 compared to last year. Other BRICS nations rank above India. The report has reiterated just how badly India has fared on its development goals even as it has increased per capita incomes four times since the 1980s in PPP terms. During the same time India's HDI ranking has improved only 1.6 times. This reflects the growing disparity between the well off and the poor in India. Even in terms of pace of improvement, India ranks lower than many developing nations.

Indian pharma stocks are trading mixed today. Wockhardt Ltd and Glenmark pharma are among the stock leading the gainers while Biocon Ltd and Aurobindo are among the stocks leading the losers. Glenmark pharma has declared its June quarter financial year 2015 results (1QFY15). The company reported topline growth of 20% YoY for 1QFY15. The company also received licensing income of Rs 300 m during the quarter. Excluding this income, the sales growth was approx 17.6% YoY. The top line growth was largely led by growth in India, Europe and RoW markets. The US geography witnessed modest growth of 9% YoY, during the quarter. EBITDA increased by 38.16% YoY and the net profits were up by 43.65% YoY. Glenmark is trading up by 5%.

This article (Indian markets continue to slide) 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, 25 Jul 2014 06:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Indian-markets-continue-to-slide
Indian share markets open weak http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Indian-share-markets-open-weak
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Asian stock markets have opened the day on a mixed note with stock markets in Japan (up 0.6%) and China (up 0.5%) leading the gains. However, markets in Taiwan (down 0.8%) and Malaysia (down 0.4%) are trading weak. The Indian share markets have also opened the day on a negative note. The sectoral indices have opened on a mixed note with technology and capital goods stocks leading the losses. However, realty and healthcare stocks are trading firm.

The Sensex today is down by around 27 points (0.1%), while the NSE-Nifty is down by about 8 points (0.1%). However, mid and small cap stocks have opened in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.2% and 0.1% respectively. The rupee is currently trading at Rs 60.00 to the US dollar.

Cement stocks have opened the day on a mixed note with UltraTech Cement and ACC leading the losses. However, Prism Cement and Heidelberg Cement are trading firm. Holcim Group companies ACC and Ambuja Cements have announced their financial results for the second quarter of the calendar year 2014 (2QCY14).

ACC reported net sales of Rs 30,090 m, higher by 7.8% YoY. Operating profit decreased by 7.7% YoY to Rs 4,000 m. At the bottomline level, net profit declined by 7% YoY to Rs 2,410 m. Net profit margin contracted from 9.3% in 2QCY13 to 8% in 2QCY14.

Ambuja Cements reported net sales of Rs 27,064 m, higher by 15.5% YoY. Operating profit increased by 17.1% YoY to Rs 5,741 m. At the bottomline level, net profit increased by 26.1% YoY to Rs 4,087 m. Net profit margin expanded from 13.8% in 2QCY13 to 15.1% in 2QCY14.

Auto stocks have opened the day on a mixed note with TVS Motor Company and Tata Motors leading the losses. However, Tube Investments and Mahindra & Mahindra (M&M) are trading firm. Two-wheeler maker TVS Motor Company has announced its financial results for the first quarter of financial year 2014-15 (1QFY15). During the quarter, the company's net sales increased by 30.1% YoY to Rs 22,632.1 m. Operating profit increased by 23.1% YoY to Rs 1,217.6 m. Other income shot up from Rs 81.3 m in 1QFY14 to 182.7 m in 1QFY15. At the bottomline level, net profit increased by 39.4% YoY to Rs 723.2 m. Net profit margin expanded from 3% in 1QFY14 to 3.2% in 1QFY15.

This article (Indian share markets open weak) 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, 25 Jul 2014 04:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Indian-share-markets-open-weak
Is the stock market at its top? http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Is-the-stock-market-at-its-top
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The BSE Sensex just hit an all time high of 26,292 points yesterday.

So is it at the top? Will it fall from here, or go even higher?

Many in the market will love to keep you guessing. Business channels, stock brokers, the talking heads on television, etc, will all try and convince you that this is the most important question to ask right now. After all, how much money your investments in the market make depend on the answer to this question, right?

Wrong.

Why wrong? Because in the short term, markets are completely random. They are driven by a multitude of variables. Many of these may very well be completely irrelevant to the actual fortunes of the businesses you own. Yet they will affect the stock prices of these businesses.

This makes the outcome of where stock prices are headed in the short term just impossible to predict.

Thus do not ask whether this market is at its top or not. The search for the answer to such a question is bound to be extremely perilous for your money. Just like asking the question of whether the market was at its bottom or not during August of last year.

Most investors at that point were confident that the market is headed still lower, and ended up missing many excellent opportunities to make some very shrewd investments.

Thus if your investing decisions are highly reliant on correctly recognizing when the market or a particular stock has topped or bottomed out, you are ought to land up with disappointing investing results.

So what should you be looking at then?

Just two things really: price and value. That's what successful investors look at. They just ask two questions. What is my company worth? And how much can I buy/sell it for today?

So if you decide to sell any of your stocks today, do it because they have touched their fair value, or have become overvalued. Not because of some vague premonition that they have reached their top and cannot go any higher. They may very well go higher after you sell. And that will not in any way mean that your decision to sell was a wrong one to make.

What has been your approach to the Sensex being at an all time high? Do share your views on the Equitymaster club.

This article (Is the stock market at its top?) 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, 25 Jul 2014 03:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/25/2014&title=Is-the-stock-market-at-its-top