Share markets in India are presently trading marginally higher.

The BSE Sensex is trading up by 202 points, up 0.4% at 52,051 levels.

Meanwhile, the NSE Nifty is trading up by 72 points.

Titan and ONGC are among the top gainers today. IndusInd Bank and Bajaj Auto are among the top losers today.

The BSE Mid Cap index is trading up by 1%.

The BSE Small Cap index is trading up by 1.3%.

On the sectoral front, all sectors are trading in green with stocks from the real estate sector, witnessing most of the buying interest.

US stock futures are trading lower today, indicating a negative opening for Wall Street.

Nasdaq Futures are trading down by 8 points (down 0.1%) while Dow Futures are trading down by 39 points (down 0.1%).

The rupee is trading at 73.09 against the US$.

Gold prices are trading down by 0.1% at Rs 49,106 per 10 grams.

In international markets, gold prices were flat, near a five-month high of US$ 1,907.7 per ounce, supported by a retreat in US bond yields.

Amid a flat global trend, gold prices in India edged lower today. On MCX, gold futures were down 0.1% to Rs 49,575 per 10 grams. In the previous session, gold had risen 0.3% after hitting a near five-month high of Rs 49,700.

Note that tracking an uptick in global rates, domestic gold prices in India have risen more than Rs 5,000 per 10 grams over the past two months. But they still remain about Rs 7,000 from last year's august highs of Rs 56,200.

Moving on to stock-specific news...

Among the buzzing stocks, today is Muthoot Finance.

Shares of Muthoot Finance jumped over 6% in intraday trade today after the company declared its March quarter results.

The company on Wednesday reported a 22% jump in standalone net profit at Rs 10 bn for the March 2021 quarter. It had posted a net profit of Rs 8.2 bn in the year-ago period.

For the full year, the company's net profit rose by 23% to Rs 37.2 bn as against Rs 30.2 bn in 2020.

Commenting on the company's performance, Managing Director George Alexander Muthoot said -

• We have seen good business growth during the last year, especially in the second and the third quarters. After the pandemic, there was a lot of demand for gold loans.
  
  Everybody wanted to restart their business and wanted quick funding, which is why the demand for gold loans grew.

The lender was able to grow its asset under management (AUM) in the gold loan segment by 27% in 2021 compared to a growth of 22% in the previous year.

The company's gross non-performing assets (NPAs) or Stage-3 assets on gross loan assets also improved to 0.88% as against 2.16% in the previous quarter.

With respect to the performance this quarter, Mr Muthoot said the first half of April was okay in terms of business but after that demand got hit in May as branches were closed. He expects demand to improve by the end of this month.

He also expects AUM to grow by 15% in 2022.

We will keep you posted on more updates from this space. Stay tuned.

At the time of writing, Muthoot Finance shares were trading up by 6.7% on the BSE.

Moving on to news from the software sector...

Wipro Sells Stake in Denim Group for US$ 22.4 m

IT company Wipro on 2 June said that it has sold its entire stake in the Denim Group for a consideration of US$ 22.4 million (Rs 1.6 bn).

In March 2018, Wipro acquired a 33.3% stake in Denim Group and Denim Group Management, LLC, an independent application security firm, for a consideration of US$ 8.8 m, Wipro said in a regulatory filing.

"As part of the recently announced acquisition of Denim Group by Coalfire, Wipro has sold its entire stake in Denim Group for a consideration of $ 22.4 m. Consequent to the sale, Wipro does not hold any stake in the company," the company said in a BSE filing.

This is the second company in which Wipro had sold its stake.

On 30 May, in a regulatory filing, the company said it is selling its stake in Ensono Holdings, a hybrid IT services provider for US$ 76.2 m. In March 2018, Wipro had invested US$ 55 m for a 10.2% stake in Ensono's combined entity, Ensono Holdings.

Wipro sold the stake as Private Equity player KKR acquired Ensono.

Meanwhile, Wipro also announced that it has acquired a minority stake of less than 20% on a fully diluted basis in US-based IT incident response services provider Squadcast for US$ 1.2 m. The transaction is expected to be completed during the quarter ending June 2021.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

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

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

Here's why...

As per Richa, the small cap 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 the 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 small caps 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.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.