Indian share markets witnessed negative trading activity throughout the day today and ended lower.

Benchmark indices witnessed a sharp selloff across all sectors in the afternoon session with Sensex declining more than 600 points in intraday deals, while Nifty fell below the 15,750 level.

Investors turned cautious followed by a private report stating that India's retail inflation likely to accelerate to a seven-month high in June on rising food and fuel prices, staying above the Reserve Bank of India's comfort zone for a second straight month.

Some anxiety also came as Fitch Ratings cut India's growth forecast to 10% for the current financial year, from 12.8% estimated earlier, due to slowing recovery post-second wave of covid-19.

Also, markets failed to recover in the closing session US futures were seen trading lower which further deteriorated the already weakened sentiments for the day.

At the closing bell, the BSE Sensex stood lower by 486 points (down 0.9%).

Meanwhile, the NSE Nifty closed lower by 152 points (down 1%).

Tech Mahindra and SBI Life Insurance were among the top gainers today.

Tata Motors and JSW Steel, on the other hand, were among the top losers today.

The SGX Nifty was trading at 15,726, down by 162 points, at the time of writing.

The BSE Mid Cap index and the BSE Small-Cap index ended down by 0.4% and 0.1%, respectively.

Sectoral indices ended on a negative note with stocks in the metal sector, banking sector, and finance sector witnessing most of the selling pressure.

Power stocks, on the other hand, witnessed buying interest.

Shares of Rites and Sonata Software hit their respective 52-week highs today.

Asian stock markets ended on a negative note today amid rise in covid cases and emergency measures taken in some countries to counter the pandemic.

The Hang Seng and the Shanghai Composite ended the day down by 2.9% and 0.8%, respectively.

The Nikkei ended down by 0.9% in today's session.

US stock futures are trading on a negative note today with the Dow Futures trading down by 466 points.

The rupee is trading at 74.70 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.4% at Rs 48,115 per 10 grams.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani, shares why he believes green metals are the future, in his latest video for Fast Profits Daily.

In news from the textiles sector, KPR Mill was among the top buzzing stocks today.

Shares of KPR Mill rallied 10% to hit a new high of Rs 1,868.4 per share on the BSE in intra-day trade today after the company said it will consider stock split in the forthcoming board meeting on 27 July 2021.

The stock of the textiles company surpassed its previous high of Rs 1,780 touched on 6 July 2021. In the last three months, the scrip has zoomed 74% as compared to a 7% rise in the BSE Sensex.

'A meeting of the board of directors of the company is scheduled to be held on 27 July 2021, to consider the proposal for sub-division of the face value of the equity shares of the company, subject to the approval of shareholders,' KPR Mill said in an exchange filing.

The board will also consider the un-audited financial results for the quarter ended 30 June 2021.

The company will sub-divide the face value of equity shares from Rs 5 each to a lower denomination to make the stock more affordable for the small retail investors and increase liquidity.

Stock split refers to splitting the face value of the shares of companies. When a company declares a stock split, the number of shares of that company increases, but the market cap remains the same.

KPR Mill is one of the largest vertically integrated apparel manufacturing companies in India producing yarn, cotton knitted fabric, readymade garments, and wind power.

KPR Mill share price ended the day up by 5.1% on the BSE.

Moving on to news from the finance sector...

PNB Tells PNB Housing Finance to Reconsider Fundraising Plan

PNB Housing Finance shares hit the upper circuit of 5% today after Punjab National Bank asked its housing finance arm to restructure Rs 40 bn capital infusion deal with Carlyle.

On Wednesday, the company said its promoter Punjab National Bank (PNB) has asked it to consider restructuring the proposed Rs 40 bn capital infusion deal led by the US-based Carlyle group.

The housing financier also said it will await the securities appellate tribunal's (SAT) order on the issue before taking a final decision.

The company said it received a letter from PNB on July 4 and subsequent to that the board of the company met on 5 and 6 July 2021.

The letter from the bank said,

• The board of directors of the company should take cognizance of the directive issued by the market regulator vide their letter dated 18 June 2021 and reconsider restructuring the contours of the deal/transaction of the capital raising in line with such the market regulator directive.

The watchdog had asked the company for revaluation of the issue price for the Rs 40 bn preference shares and warrants to be issued to the proposed investors at Rs 390 a piece.

The SAT will hear the case related to the PNB Housing Finance-Carlyle deal next Monday. The order in the matter was expected on July 5, however, it was adjourned for July 12.

PNB Housing Finance share price ended the day up by 5% on the BSE.

Speaking of the current stock market scenario, note that the BSE Smallcap index touched lifetime high recently.

Despite the index being up more than 157% since the March 2020 lows, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

As per Richa, the smallcap to Sensex ratio is a good metric to gauge while coming to some conclusions about relative valuations.

So, what is this indicator suggesting now?

As you can see from the chart below, the ratio currently stands at 0.46 times, as compared to long-term average of 0.43 times.

Here's what she wrote about it in a recent edition of Profit Hunter:

• In the last one year, the smallcaps have done well to cover the gaps with the large peers.
  
  But it could be premature to call this a peak.
  
  In the previous two rounds, the average ratio has been 0.57, suggesting more upside from these levels.