Sensex ends 361 pts lower; Bajaj Finserv & Maruti Suzuki among top Nifty losers

Tracking a rout in the global markets, benchmark indices tumbled for the fourth straight day, dragged by realty, telecom and finance stocks.

At the closing bell, the BSE Sensex stood lower by 361 points (down 0.6%).

Meanwhile, the NSE Nifty closed lower by 86 points (down 0.5%).

Mahindra & Mahindra and Coal India were among the top gainers today.

Bajaj Finserv and Maruti Suzuki, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,528, down by 84 points, at the time of writing.

The BSE MidCap index ended down by 0.2%, while the BSE SmallCap index ended up by 0.5%.

Sectoral indices ended on a mixed note with stocks in the realty sector, finance sector and telecom sector witnessing most of the selling pressure.

Consumer durables stocks, on the other hand, witnessed buying interest.

Shares of Trent and Dixon Technologies hit their respective 52-week highs today.

Asian stock markets ended on a negative note today.

The Nikkei ended down by 2.3% in today’s session. Major markets – China and Hong Kong were shut for a holiday today.

US stock futures are trading on a negative note today with the Dow Futures trading down by 231 points.

The rupee is trading at 74.12 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.1% at ₹46,265 per 10 grams.

Tata Sons Wins Bid for Air India

Moving on to stock-specific news, Tata group stocks were among the top buzzing stocks today.

Tata Sons have emerged as the winning bidder for Air India, a debt-ridden airline that was nationalised in 1953.

The selection of Tata Sons to lead Air India may seem like history coming full-circle as it was the same group that built India’s first airlines in 1932 and called it the Tata Airlines.

Tata Airlines, which was a brainchild of Jehangir Ratanji Dadabhoy (JRD) Tata and a veteran World War I pilot Nevill Vintcent, was renamed Air India in 1946 after it became public.

With Tata Sons emerging as Air India next owners, this handover could come as a relief for Prime Minister Narendra Modi as the enterprise, for decades, was bleeding the government.

According to a Reuters report, the government was losing ₹200 m every day to run Air India. Air India, so far, has accumulated a debt of ₹7 bn or US$9.5 bn.

PM Modi intended to sell the government’s entire interest in Air India since voted to power. The loss-making airline has been kept afloat by a bailout since 2012.

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

Moving on to news from the auto sector…

VST Tillers Hits 10% Upper Circuit on Pact with US-Based Firm Zimeno

Shares of VST Tillers Tractors were locked in the 10% upper circuit at ₹2,964.8 on the BSE today after the company announced that it has entered into a master service agreement with Zimeno Inc, USA. to develop an integrated tractor powertrain for the electric tractor of Zimeno.

The stock was trading at its 52-week high level and surpassed its previous high of ₹2,898.9 touched on 7 September 2021. It had hit a record high of ₹3,085 on 24 April 2018.

Last month, VST Tillers had launched the VST range of tractors and power tillers in Southern Africa.

In a regulatory filing, the company said,

The company has entered into an agreement with export trading group (ETG), for distribution of its tractors, power tillers, power reapers and diesel engines in the Southern African markets, including South Africa, Namibia, Botswana, Zimbabwe, Swaziland, and Zambia.

VST Tillers is the largest Indian manufacturer of tillers, four-wheel drive compact tractors and among the leading producers of the other category tractors, engines, transmission, power reaper and precision components.

It has also entered into strategic alliances with Pubert from France for power weeders and zetor from the Czech Republic for tractors.

VST Tillers share price ended the day up by 10% on the BSE.

Speaking of the current stock market scenario, note that the BSE smallcap index has surged over 180% since the crash in March 2020.

Despite the index being up more than 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

The Smallcap to Sensex ratio, a metric referred to get a sense of relative valuations, currently stands at 0.48 times. To be sure, this is higher than a median of 0.43 times.

And yet, it's the lowest of all the peaks in the smallcaps so far. In the last cycle which peaked in January 2018, when the ratio touched 0.49, the peak was still 9 months away.

Here's what Richa wrote in one of the editions of Profit Hunter...

When it comes to buying smallcap stocks, especially at this point in the rebound rally, you will need a bottom up approach, and a long term horizon.

In fact, if you don't have the stomach to withstand a 20%-30% kind of corrections and volatility, this space may not be for you at all. And you should stop reading right here.

As per Richa, smallcaps are a great opportunity to make some big returns. But you need to stay disciplined when it comes to allocating money. And you need to be sharp when picking the right stocks.

This article is syndicated from Equitymaster.com