Sensex, Nifty Trade Flat as Metal Stocks Witness Selling; Vodafone Idea Dips 15%

Market


The Nikkei plunged 0.8% while the Shanghai Composite is flat. The Hang Seng is trading higher by 0.3%.

In US stock markets, Wall Street indices ended down but well off their lows of the day, with the Nasdaq staging a comeback late in the session as some investors appeared to be hunting for bargains even as they worried about rising interest rates.

The Dow Jones Industrial Average fell 0.5% while the Nasdaq Composite ended 0.1% higher.

Back home, Indian share markets are trading on a flat note.

Market participants will track shares of Delta Corp, National Standard, Radhe Developers and Earum Pharmaceuticals as these companies will announce their December quarter results today.

The BSE Sensex is trading up by 34 points. Meanwhile, the NSE Nifty is trading higher by 6 points.

HCL Tech and NTPC are among the top gainers today. Tata Steel, on the other hand, is among the top losers today.

Both, the BSE Mid Cap index and the BSE Small Cap index are trading on a flat note.

Sectoral indices are trading mixed with stocks in the IT sector and healthcare sector witnessing buying interest.

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

Shares of Greaves Cotton and Suzlon Energy hit their 52-week highs today.

Shares of Vodafone Idea crashed 15% after the company said that the government will own almost 36% in the wireless phone operator after its board approved conversion of dues into equity.

The rupee is trading at 73.91 against the US$.

Gold prices are trading up by 0.2% at 47,528 per 10 grams.

Meanwhile, silver prices are trading up by 0.2% at 60,775 per kg.

Crude oil prices rose today after two days of losses, with some risk appetite returning as the market awaited clues from the US Federal Reserve chairman on potential rate rises and as some oil producers continued to struggle to beef up output.

In news from the pharma space, Aurobindo Pharma has initiated talks with private equity funds to sell a stake of around 30-35% in its injectable business for 45-52.5 bn as the Hyderabad-based drug maker plans value unlocking in its core businesses.

TPG Capital Management, Advent International, Bain Capital and Blackstone have been sounded off for a potential transaction, valuing the business at 150 bn. The Carlyle Group and PAG are the two other firms which have been reached out for a potential deal.

As part of expanding the injectable business, Aurobindo is setting up a dedicated injectable facility in Vizag for the European Union and other global markets, the company said in its latest annual presentation.

Aurobindo has built a strong presence in injectables across delivery systems such as liquid and lyophilised vials, bags, ampoules, and prefilled syringes. It has completed the construction of an injectable facility in the US.

How the stake sale pans out remains to be seen.

In news from the PSU space, RailTel Corporation of India is among the top buzzing stocks today. RailTel Corporation of India has declared an interim dividend at the rate of 17.5% of paid-up share capital for the financial year 2021-22.

The total payout of the dividend is around 560 m, the central government public sector unit (PSU) under the Ministry of Railways said.

The decision on interim dividend was taken at a meeting of board of directors on Monday.

The board also approved 21 January 2022, as record date for the payment of the interim dividend for 2021-22.

The company’s CMD Puneet Chawla said that RailTel continues to be a profitable company since financial year 2006-07. Despite the challenge posed by the Covid pandemic, RailTel managed to make rapid growth and recorded its highest ever consolidated income in fiscal 2021 of 14.1 bn, a growth of 21%.

He added that RailTel currently has a healthy order book of 53 bn.

The company is constantly expanding its existing business and constantly exploring new areas and activities to widen its profile.

RailTel Corp share price is currently trading on a flat note.

Speaking of PSUs, have a look at the chart below which shows the performance of BSE PSU index compared to BSE Sensex over the past few years.

Source: ACE Equity

View Full Image

Source: ACE Equity

As can be seen from the chart above, over the last decade, 100 invested in BSE PSU index would have eroded to 80, compared to almost 3x gains for the Sensex.

Here’s what Richa Agarwal, lead Smallcap Analyst at Equitymaster, wrote about PSU stocks in one of the edition of Profit Hunter:

However, it will be folly to paint all PSUs with the same brush. There are some exceptions in this space, which put their private peers to shame. In an editorial, I shared an opportunity in a PSU stock that is riding and enabling an irreversible megatrend – digitisation.

Moving on to news from the realty sector, global investment firm Blackstone has sold its entire 9.16% stake in Mindspace Business Parks REIT (real estate investment trusts) for 17.4 bn through an open market transaction.

The units were purchased by Platinum Illumination Trust in a bulk deal on stock exchanges.

As per BSE’s bulk deal data, Platinum Illumination A 2018 Trust purchased over 54.3 m units at an average price of 320.

Yesterday, shares of Mindspace Business Parks REIT ended 1.4% lower at 324.46.

Mindspace Business Parks REIT, sponsored by K Raheja Corp group, was listed on the Indian bourses in August 2020.

The REIT owns quality office portfolios located in four key office markets of India, namely Mumbai Region, Pune, Hyderabad, and Chennai.

REIT, a popular instrument globally, was introduced in India a few years ago for attracting investment in the real estate sector by monetising rent-yielding assets.

It helps unlock the massive value of real estate assets and enable retail participation.

Mindspace Business Parks REIT is currently trading down by 0.9%. 

This article is syndicated from Equitymaster.com

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