Tue, 7 Dec Pre-Open
Indian share markets ended deep in the red yesterday.
Benchmark indices extended Friday’s fall as investors continued to adopt a cautious approach given the uncertainty around the Omicron virus and the upcoming RBI policy meeting on 8 December 2021.
At the closing bell yesterday, the BSE Sensex stood lower by 949 points (down 1.7%).
Meanwhile, the NSE Nifty closed lower by 284 points (down 1.7%).
UPL was among the top gainers.
IndusInd Bank and Tata Consumer Products, on the other hand, were among the top losers.
On the sectoral front, telecom stocks, IT stocks and FMCG stocks were among the hardest hit.
Shares of Zee Entertainment and Vodafone Idea hit their respective 52-week highs.
Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 47,933 per 10 grams at the time of closing stock market hours yesterday.
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Why Stock Markets Plunged Yesterday
Omicron spreads legs: Omicron remained a concern as the variant spread to about one-third of US states, though there were reports from South Africa that cases there had mild symptoms. The cases have also surged manifold in India.
Several cases of the Omicron variant have sprung up in India with Maharashtra, Rajasthan and Delhi reporting new cases on Sunday. Currently, India’s tally stands at 21.
Tapering to accelerate: Fed policymakers look likely to accelerate the wind-down of their asset purchases when they meet later this month as they respond to a tightening labour market and move to open the door to earlier rate hikes than they had projected.
FIIs slow down: Concerns over rising omicron cases and valuations seem to have weighed on foreign institutional investor (FIIs) inflow. FIIs net sold shares worth Rs 33.6 bn in the Indian equity market on Friday.
Weak global cues: China tech shares tumbled yesterday, with a key gauge closing at its lowest level since launch last year as concerns mount over how much more pain Beijing is willing to inflict on the sector.
The Hang Seng Tech Index closed down 3.3%, its biggest decline in nearly two months, to the lowest level since before its July 2020 inception.
The decline also tracks Friday’s 9.1% plunge in the Nasdaq Golden Dragon China Index, which was the biggest decline since 2008, on worries that Didi Global Inc.’s delisting would put pressure on other Chinese firms to follow suit.
Overall, Asian stock markets ended on a negative note yesterday.
Profit booking: Apart from the above, losses were also seen as share market succumbed to profit-booking.
We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!
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In the video, Vijay discusses what he thinks about investing in NBFC stocks and how you should approach them in the current market situation.
Top Stocks in Focus Today
Among the buzzing stocks today will be Tata Motors.
India’s leading carmaker Tata Motors said it will raise prices of commercial vehicles in the range of 2.5% from 1 January 2022.
The price hike will be across segments of medium and heavy commercial vehicles (M&HCV), intermediate and light commercial vehicles (I&LCV), small commercial vehicles (SCV) and buses, based on individual model and variant of the vehicle.
The increase in the prices of commodities such as steel, aluminium and other precious metals, in addition to higher costs of other raw materials has incited this price hike commercial vehicles, the company said.
While the company said it is absorbing a significant portion of the increased costs at various levels of manufacturing, the steep rise in overall input costs makes it imperative to pass on some residual proportion via a minimal price hike.
Earlier this month, Maruti Suzuki has also announced that it will increase prices in January 2022 due to increase in various input costs. The company said that the price hike shall vary for different models.
Tata Motors’ total sales increased by 25% in November as compared to the same month last year.
Godrej Properties share price will also be in focus today.
Realty firm Godrej Properties said it has entered into a joint venture (JV) with TDI group to build a luxury housing project in Central Delhi.
In a regulatory filing, Godrej Properties informed that the project would have a development potential of about 1.3 lakh square feet saleable area.
Godrej Properties said it has entered into a joint venture with TDI group to develop an ultra-luxury residential project in Connaught Place (CP), one of the most premium locations within the central business district of New Delhi.
Mohit Malhotra, managing director (MD) and chief executive officer (CEO) of Godrej Properties, said,
- As we continue to strengthen our presence in Delhi, we are happy to add this project in one of downtown Delhi’s most desirable locations.
This will be the company’s third project in Delhi, he added.
Godrej Properties is developing a housing project at Okhla, while it will soon launch a luxury housing project at Ashok Vihar in the national capital.
In the Delhi-NCR property market, the company is also developing multiple housing projects in Noida, Greater Noida and Gurugram.
Kamal Taneja, MD of TDI InfraCorp, said,
- We are proud to be associated with Godrej Properties to deliver this uber-luxury project and we look forward to this association.
Mumbai-based Godrej Properties is expanding its presence across four major cities – Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune and Bengaluru.
It is buying land parcels and entering into joint ventures with landowners to add projects for future development.
RBI Weighs Priority Sector Loans for Electric Vehicles
India’s central bank is considering a proposal from the Niti Aayog to categorise loans to purchase electric vehicle (EVs) under the priority sector lending (PSL) segment.
If the proposal is accepted, it will help the segment get credit at lower interest rates. Currently, these loans are given under the auto retail category, but lenders are wary about financing purchase of EVs as they are unsure about the risks in a segment which is still in a nascent stage.
Niti Aayog chief executive Amitabh Kant confirmed that the government’s policy think tank has given the proposal.
It considered the potential of EVs in reducing emission of greenhouse gases and helping India in its fight against climate change, Kant said.
He said that the inclusion of EVs under the PSL would not only reduce cost of finance but also provide finance to more people, thus increasing penetration of EVs in India.
Kant added that the process for inclusion of EVs under PSL requires extensive deliberations and consultations to have a targeted outcome of increased access and reduced cost of finance to this sector.
Reportedly, manufacturers of electric two- and three-wheelers have also made representations to the banking regulator for PSL status.
Under the PSL framework, 40% of lenders’ total credit must be compulsorily loaned to specific sectors. These sectors include agriculture, small businesses, export credit, education, housing, social infrastructure and renewable energy.
Inox Wind’s Subsidiary Inox Green to Raise Funds
Wind energy service provider Inox Wind informed that the company’s material subsidiary Inox Green Energy will raise funds by way of initial public offering (IPO) for up to Rs 5 bn.
In an exchange filing, the company said,
- We hereby inform you that the board of directors of the company’s material subsidiary, Inox Green Energy Services (Earlier known as Inox Wind Infrastructure Services) in their meeting held on 6 December 2021 has approved fund raising, subject to receipt of requisite approvals including approval of the shareholders, market conditions and other considerations.
Inox Wind further added that the fund raising will be by way of an IPO of its equity shares comprising of fresh issue of equity shares aggregating upto Rs 5 bn and/or an offer of sale (OFS) of equity shares by certain existing and eligible shareholders of the company.
The stock has given multibagger return of over 122% this year (year to date or YTD) so far, whereas, in a year’s period, the scrip has surged 179%.
Inox Wind is a fully integrated player in the wind energy market with state-of-the-art manufacturing plants near Ahmedabad for blades & tubular towers and at Una (Himachal Pradesh) for hubs & nacelles.
How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.
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