Share markets in India continued to witness selling pressure during closing hours and ended their trading session on a negative note. Sectoral indices ended on a negative note with stocks in the IT sector and energy sector witnessing most of the selling pressure.
At the closing bell, the BSE Sensex stood lower by 274 points (down 0.8%) and the NSE Nifty closed down by 56 points (down 0.5%). The BSE Mid Cap index ended the day up 0.6%, while the BSE Small Cap index ended the day up 0.1%.
The rupee was trading at 71.29 against the US$.
Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up by 0.5% and the Shanghai Composite was up by 0.2%. The Nikkei 225 was down 0.4%.
Note that while the markets are witnessing a correction lately, the SIP flows into Indian stock markets are on the rise. Have a look at the chart below. It plots the month SIP contributions over the 31-month period between April 2016 and October 2018.
SIPs Continue to Rise Despite Market Correction
During the above period, SIP contributions have grown from Rs 3,122 crore in April 2016 to Rs 7,985 crore in October 2018, growing at compounded annual rate of 46%.
Currently, there are about 2.49 crore SIP accounts through which investors regularly invest in various Indian mutual fund schemes. As per AMFI data, the mutual fund industry added an average of about 10.05 lakh SIP accounts each month during the financial year 2018-19, with an average SIP size of about Rs 3,200 per SIP account.
If the trend in SIP inflows remains steady, it will provide the much-needed buoyancy to the Indian markets which have been witnessing an exodus of foreign investors.
In the news from the aviation sector, Jet Airways share price was in focus today. The stock of the company witnessed buying interest today on the back of falling crude oil prices and also after the company said it is in talks to secure sustainable financing for its operations and growth.
Note that last month reports stated that Jet Airways is trimming its workforce and operations further as it struggles through its financial crisis.
As per a leading financial daily, at least 15 people at manager or general manager level in departments such as engineering, security and sales have been asked to leave in October. It is also reported that the airline has grounded eight of its planes at the Mumbai and Chennai airports.
The company had also deferred announcing the June quarter numbers to an unspecified late date.
Amid rising concerns over the airline's financial health and proposed salary reductions for employees, Jet Airways chairman said a new committee would be set up to improve public perception.
Later, the company reported a whopping Rs 13.2 billion of net losses for the June quarter due to higher fuel cost, falling rupee and low fares. The company said it will monetize loyalty programme JetPrivilege and wet-lease some of its small aircraft to mobilize urgent working capital.
This was the second straight quarter of losses for the Naresh Goyal-run airline, which had last month publicly admitted to cash-flow issues. The airline had booked net profit of Rs 535 million in the year-ago period, while in the March quarter it had reported net losses of Rs 10.4 billion.
The airline said its fuel cost soared 53% to Rs 23.3 billion in the quarter, while low fares had revenue inching up to Rs 60.7 billion from Rs 59.5 billion.
On a consolidated basis, the net loss stood at Rs 13.3 billion, against a net profit of Rs 580 million a year ago.
The second back-to-back quarterly loss forced Jet Airways, which delayed the result announcement on August 9 indefinitely, to announce a turnaround plan which includes a capital infusion by selling a stake in JetPrivilege, and a massive cost-cutting to save around Rs 20-billion over the next two years.
To know more about the company, you can access to Jet Airways' latest result analysis and Jet Airways' 2017-18 Annual Report Analysis on our website.
From the pharma space, Dr. Reddy's share price was also in focus today as a court ruling allowed the company to sell a generic of Indivior Plc's opioid treatment drug Suboxone in the US.
The US court appeals for the Federal Circuit which were set aside yesterday blocked Dr. Reddy's from selling the generic in the country. The market comprising drugs that treat opioid abuse in the US during the past 12 months is worth US$ 2.8 billion.
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