After opening the day on a positive note, stock markets in India have continued their momentum and are trading in the green. Sectoral indices are trading on a positive note with stocks in the metal sector and banking sector witnessing maximum buying interest.
The BSE Sensex is trading up 208 points (up 0.6%) and the NSE Nifty is trading up 58 points (up 0.5%). The BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.6%.
The rupee is trading at 67.52 to the US$.
Market participants are closely tracking the vote count for Karnataka elections.
At the time of writing, data showed Bharatiya Janata Party (BJP) emerging as the single largest party in Karnataka. The BJP has crossed the majority mark and is leading in over 111 seats. This is against 67 seats for Congress.
BJP leading six out of the eight bellwether seats. A seat or a constituency that votes for the political party which eventually forms the government is called a bellwether seat. Bellwether seats usually act as a marker for the final results.
There are high stakes involved as the outcome of this election would also determine the direction of the country's reforms and policies in the runup to the 2019 elections.
In the news from the macroeconomic space, data released by the government on Monday showed retail inflation accelerating to 4.58% in April from 4.28% in March. Wholesale price inflation also climbed to a four-month high of 3.18% in April compared with a 2.47% rise seen in March.
As per a leading financial daily, in a major rejig of the Modi government cabinet, the Union Railway Minister Piyush Goyal will now be given the additional charge of the Finance Ministry till Arun Jaitley recovers from a kidney transplant surgery.
Apart from that, Smriti Irani, who had the extra charge of Information & Broadcasting Ministry, has been moved out and will now look after textiles ministry only.
Further, sports Minister Rajyavardhan Singh Rathore has been given independent charge as Minister of State in the I&B Ministry.
Union minister of state S S Ahluwalia, was relieved of his charges of Ministry of Drinking Water & Sanitation and was assigned the Ministry of Electronics & Information Technology, replacing Alphons Kannanthanam who continues as Minister of State for Tourism.
In the news from the IPO space, Punjab National Bank (PNB) has brought back its plans to list PNB Metlife Insurance Company.
The above IPO could help the Nirav Modi scam-hit state-run bank raise capital by diluting its stake in the insurer.
As per the news, the company is said to soon file the IPO papers with the regulator.
Speaking of IPOs, the demand for IPO's has reached sky-high levels lately. This is evident from the chart below.
IPO Subscription Reach Sky-High Levels
However, one shall note that more than 70% of the IPOs listed in 2007 and 2008 are in the red, even today when the Sensex is at an all-time high.
A merit-based selection primarily including valuation, business, and management quality is the logical way to go about investing in IPOs. If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often than not.
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