Indian share markets witnessed positive trading activity throughout the day today and ended on a strong note.
Benchmark indices ended higher for the fourth consecutive day, helped by gains seen in finance and IT stocks.
At the closing bell, the BSE Sensex stood higher by 399 points (up 1.1%).
The NSE Nifty closed higher by 121 points (up 1.1%).
The SGX Nifty was trading at 11,010, up by 81 points, at the time of writing.
The BSE Mid Cap index ended up by 0.9%. The BSE Small Cap index ended up by 1%.
On the sectoral front, gains were largely seen in the IT sector and finance sector.
Healthcare stocks, on the other hand, witnessed selling pressure.
Asian markets ended on a mixed note today as investors await China's benchmark lending rate.
As of the most recent closing prices, the Hang Seng ended down by 0.1% and the Shanghai Composite stood higher by 3.1%. The Nikkei ended up by 0.1%.
European markets opened lower as investors were cautious ahead of the outcome from EU leaders meet in Brussels to figure out a deal on proposed 750 billion euros.
The rupee was trading at 74.91 against the US$.
Gold prices are trading down by 0.1% at Rs 48,941.
Speaking of Indian stock markets, multiple investing philosophies are pointing that small caps are likely to perform well, going ahead.
Moving on, in news from the IT sector, Infosys was among the top buzzing stocks today. The company announced a strategic relationship with LANXESS, a leading specialty chemicals company based in Germany.
In its exchange filing, the company said that the IT giant will help LANXESS in its IT infrastructure digitization strategy.
Last week, Infosys had announced a large deal with Vanguard. The multi-year contract between Infosys and Vanguard is worth US$ 1.5 billion.
The contract with the US investment firm is also expected to span over 10 years and the deal value could further rise to more than US$ 2 billion during the period.
This is the largest deal that Infosys has ever signed. In 2018, Infosys had entered into an agreement with Verizon whose worth got extended to US$ 1 billion in 2019.
Speaking of IT stocks, note that IT majors such as Tata Consultancy Services (TCS), Infosys, and Wipro have turned out to be the favorite defensive bets for equity investors worried about the economic uncertainty after the Covid-19 lockdown.
The combined weight of IT companies in the benchmark Nifty 50 index is now at a five-year high of 15% as these companies continue to outperform the broader market.
In comparison, they accounted for 12.3% of the index at the end of 2019 and 12.8% in December 2018.
The combined market capitalization of five IT companies, which are part of the index, is up 6.5% since the beginning of 2020.
We will keep you updated on the latest developments from this space. Stay tuned.
Moving on to news from the banking sector, ICICI Bank expects its revenues to be impacted in 2020-21 due to the Covid-19 crisis and said it will look to maintain adequate liquidity and focus on robust credit monitoring.
The private lender, in its annual report 2019-20 said the economic conditions remain challenging going forward due to the uncertainties posed by the global health crisis and the stand-still in the economic activity.
"In view of the COVID-19 pandemic, there will be an impact on revenues and an increase in rating downgrades in the portfolio and NPA formation at a systemic level and for the bank," ICICI Bank said.
As part of its capital raising plans for the current fiscal year, the second-largest private sector lender earlier this month informed about the board's decision to raise up to Rs 150 billion in core capital through various routes.
Before this in June, it sold a 3.96% stake in its general insurance subsidiary ICICI Lombard General Insurance for Rs 22.5 billion and 1.5% stake in life insurance subsidiary for around Rs 8.4 billion with an aim to strengthen the balance sheet.
In 2018-19, the bank had sold 2% of its shareholding in ICICI Prudential Life Insurance Company.
ICICI Bank share price ended the day up by 2.4%.
In other news, Yes Bank share price witnessed selling pressure today.
Shares of the private sector lender have consistently been falling since the pricing announcement of the further public issue worth Rs 150 billion.
Since June 10, when the bank priced its FPO at a steep discount from the market price at that time, the stock has lost around 40% of its value.
The private lender managed to close its follow-on public offer (FPO) with a 95% subscription, driven by institutional investors, even as HNIs and retail investors showed tepid interest in the bank's offering.
The bank received subscriptions for shares worth Rs 142.7 billion in the FPO, at the lower end of the price band of Rs 12-13 per share.
Some of the institutional investors that participated in the deal include State Bank of India, Life Insurance Corp of India, IIFL, Edelweiss, Bajaj Allianz, HDFC Life, Punjab National Bank, HDFC MF, Union Bank and Bajaj Holdings.
Speaking of the banking sector, note that 2019 was brutal for some banking stocks.
The market has severely punished them. This is due to issues such as worsening asset-quality, corporate governance, and inadequate capital.
Stocks such as Yes Bank and Lakshmi Vilas Bank have witnessed huge selling pressure.
Falling Knives in the Banking Sector
Falling stock prices could be enticing. After all, we love deep discounts and good bargains.
But if you're thinking of buying these stocks it's important to remember this point - If a stock is in a falling spree, there's probably a good reason behind it.
And realising this in a falling market is the first step towards correcting one's investing process.
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