Sensex, Nifty marginally lower in volatile trade; IndusInd Bank, HUL top losers

Market


However, markets have recovered some losses. The Hang Seng is up 0.1% while the Shanghai Composite is down 0.1%. The Nikkei rose 0.8%.

In US stock markets, Wall Street indices finished higher in choppy trading on Wednesday ahead of the US Thanksgiving holiday as US Treasury yields hovered near the year’s highs.

The Dow Jones Industrial Average ended flat while the Nasdaq gained 0.4%.

Back home, Indian share markets opened on a flat note, following the trend on SGX Nifty.

Benchmark indices have extended losses and are currently trading marginally lower.

The BSE Sensex is trading down by 146 points. Meanwhile, the NSE Nifty is trading lower by 47 points.

Reliance Industries and Kotak Mahindra Bank are among the top gainers today.

IndusInd Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index and the BSE Small Cap index are trading up by 0.3% and 0.1%, respectively.

Sectoral indices are trading mixed with stocks in the energy sector and realty sector witnessing buying interest.

Metal stocks and power stocks, on the other hand, are trading in red.

Shares of Trident and SIS hit their 52-week highs today.

The rupee is trading at 74.52 against the US$.

Gold prices are trading up by 0.2% at 47,539 per 10 grams.

Meanwhile, silver prices are trading up by 0.4% at 62,878 per kg.

Gold edged up as the dollar eased slightly, but comments from US Federal Reserve policymakers suggesting the central bank could accelerate stimulus tapering weighed on the metal.

Crude oil prices edged lower with investors waiting to see how major producers respond to the emergency crude release by major consuming countries designed to cool the market, even as data pointed to healthy US fuel demand.

Speaking of the current stock market scenario, despite the BSE Small cap index surging over 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes small cap stocks are set for a massive up move in 2021 and beyond.

Here’s why…

The Smallcap to Sensex ratio has risen from 0.32 times to 0.48 times. This compares to long term median of 0.43 times. It has moderated from 0.51 in August 2021 post the recent rise in Sensex.

More importantly, it is way lower than the previous peak ratios: 0.76 in September 2005, 0.68 in January 2008, 0.55 in September 2010, and 0.58 in January 2018.

Smallcap to Sensex ratio.

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Smallcap to Sensex ratio.

This relative valuation indicator suggests there is still a lot of juice in the rally.

In news from the IPO space, the unlisted shares of National Stock Exchange (NSE) have risen nearly 7% in the last few days.

This comes despite marquee institutional investors trimming stake in the exchange operator due to uncertainty over its proposed initial public offering (IPO).

It was reported last week that Citigroup sold an estimated 2.2 m shares of NSE at about 3,275 apiece on behalf of its institutional clients.

Edelweiss and JM Financial also reportedly sold NSE shares on Tuesday at 3,200 apiece.

As per reports, NSE’s share price in the unlisted space has seen a dramatic rise in the last one year. While trades in this market were happening at 1,000 apiece in March 2020, by January 2021 the price rose to 1,900. Now, some transactions happened at 3,500 this month.

Investors are also lapping up the NSE shares as they believe that the shares could fetch a minimum premium of 50% when listed. The stock exchange, which is eyeing a valuation of 2 lakh crore, could sell shares at as much as 4,100 each, according to market experts.

Note that while institutions are seen exiting at a handsome profit after staying invested for seven-eight years, wealthy individuals are buying in anticipation of listing gains.

Note that if the market regulator given the green signal to NSE’s IPO, it could become the country’s biggest IPO.

We will keep you updated on the latest developments from this space. Stay tuned.

Moving on to stock specific news…

Dixon Technologies is among the top buzzing stocks today.

Taiwanese IT hardware firm Acer has roped in Dixon Technologies for making its laptops in India. The facility will have a capacity to manufacture up to 5 lakh Acer laptops annually.

The manufacturing unit was inaugurated by Ministry of Electronics and Information Technology joint secretary Saurabh Gaur in the presence of Dixon Technologies’ Chairman and Acer India’s President & Managing Director.

In a joint statement, both the companies said,

This will give a strong impetus to India’s manufacturing competitiveness and leverage the Production-Linked Incentive (PLI) by the Government of India. The factory will have capacity to produce upto 5,00,000 laptops annually.

Dixon Technologies is one the contract manufacturers that has qualified for the PLI scheme for IT hardware.

With this partnership, Dixon has forayed into manufacturing laptops in India.

Dixon Technologies share price is trading up by 0.8%.

(This article is syndicated from Equitymaster.com)

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