Share markets in India continued their momentum during closing hours and ended the day on a positive note. Sectoral indices were trading on a positive note with stocks in the IT sector and finance sector leading the gains.
At the closing bell, the BSE Sensex stood higher by 551 points (up 1.6%) and the NSE Nifty closed up by 188 points (up 1.8%). The BSE Mid Cap index ended the day up 1.6%, while the BSE Small Cap index ended the day up by 1.4%.
The rupee was trading at Rs 73.93 against the US$.
Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 1.6% and the Shanghai Composite was up by 1.3%. The Nikkei 225 was up by 2.1%. European markets were also trading on a positive note. The FTSE 100 was up by 1.3%. The DAX was up by 1%, and the CAC 40 was up by 1.8%.
Small cap stocks are witnessing buying interest today with the BSE Smallcap Index trading up by 1.4% at the time of writing. Stocks such as Munjal Auto, DB Realty, and Dhanlaxmi Bank are the top gainers in the index.
It's also interesting to see how the BSE Smallcap index has performed during the years. Have a look at the chart below:
The Smallcap Index Is Up Merely 1% from Its 2008 Top
On 7 January 2008, at the height of the previous bull run, the Smallcap index hit a high of 13,975. In the market crash that followed, the index hit a low of 2,867 on 9 March 2009. In other words, the Smallcap index tanked a whopping 79%!
Ankit Shah shares an interesting observation around this data. Here's him in a recent edition of The 5 Minute WrapUp...
- From its 2009 low, the BSE SmallCap index has risen 391%, compounding at an annual rate of 18%.
But here's the most telling observation...
From its January 2008 peak to now, the BSE SmallCap index has gained just 0.8%.
If you factor in inflation, the returns are actually negative.
In other words, investors who bought smallcap stocks at market peaks and didn't go bargain hunting in the subsequent crashes didn't make any money.
In the news from the global financial markets, the Bank of Japan (BOJ) kept its monetary policy steady and trimmed its inflation forecast.
As per the news, BOJ Governor Haruhiko Kuroda said the central bank will be mindful of how its policies affect financial institutions, as they could start to curb lending if their profits shrink too much. He, however, stressed that the central bank had no plans to raise interest rates to give financial institutions a breather. He said the priority was to keep rates very low and help inflation accelerate to BOJ's 2% target.
The BOJ maintained short-term interest rates at minus 0.1% and long-term rates around 0% by a 7-2 vote.
In the quarterly report, the central bank cut its core consumer inflation forecast for the current fiscal year ending March 2019 to 0.9% from 1.1% three months ago. It also slightly trimmed its price forecasts for the following two years and now projects inflation to hit 1.5% in the year ending in March 2021.
Moving on to the news from the mining space, Coal India share price was witnessing selling pressure today. Losses were seen after reports stated that the government is looking to divest its stake in the state-run PSU.
As per the news, the government has decided to divest a 9% stake in Coal India through a two-day offer for sale starting Wednesday. The offer is expected to fetch the government about Rs 140 billion at the floor price, including a greenshoe option. To know what's moving the Indian stock markets, you can check out the most recent share market updates here.
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