Sectoral indices ended on a positive note with stocks in the oil & gas sector, energy sector and telecom sector witnessing most of the buying interest. Realty and healthcare stocks, on the other hand, witnessed selling pressure
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Indian share markets witnessed volatile trading activity today and ended on a strong note.
Benchmark indices climbed higher after a muted start amid weakness across global markets.
Sectoral indices ended on a positive note with stocks in the oil & gas sector, energy sector and telecom sector witnessing most of the buying interest.
Realty and healthcare stocks, on the other hand, witnessed selling pressure.
Shares of HPCL and Tata Chemicals hit their respective 52-week highs today.
Asian stock markets ended on a mixed note today.
The Hang Seng ended up by 0.3%, while the Nikkei ended down by 2.2% in today’s session.
US stock futures are trading on a positive note today with the Dow Futures trading up by 128 points.
The rupee is trading at 74.44 against the US$.
Gold prices for the latest contract on MCX are trading down by 0.5% at ₹46,653 per 10 grams.
In news from the finance sector, SREI Infra Finance was among the top buzzing stocks today.
Shares of SREI Infrastructure Finance were locked in a 5% lower circuit today after the Reserve Bank of India (RBI) superseded the board of directors of the company.
The scrip was frozen at ₹8.2 apiece on the BSE, down 5% while on the National Stock Exchange (NSE), it was locked at ₹8.2, down 4.7%.
On Monday, RBI said that it has superseded the boards of Kolkata-based non-banking financial companies (NBFCs) SREI Infrastructure Finance and SREI Equipment Finance.
In a statement, the central bank said,
In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the board of directors of SREI Infrastructure Finance (SIFL) and SREI Equipment Finance (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations
It further informed that Rajneesh Sharma, former chief general manager, Bank of Baroda has been appointed as the administrator of the two companies under Section 45-IE (2) of the RBI act.
Additionally, the central bank constituted a three-member advisory committee to assist the administrator. This comprises of R Subramaniakumar, former MD and CEO of Indian Overseas Bank, T T Srinivasaraghavan, former MD of Sundaram Finance and Farokh N Subedar, former CEO and company secretary of Tata Sons.
SREI Infra Finance share price ended the day down by 5% on the BSE.
Moving on to news from the telecom sector…
DoT May Reconsider Levying One-Time Spectrum Charge
Shares of Vodafone Idea rose as much as 7% today as concerns over the company’s survival faded.
In what might be a relief to telecom operators, the Department of Telecommunication (DoT) has submitted an affidavit to the supreme court of India saying it wants to reconsider levying the one-time spectrum charge on telecom operators, citing stress and the possibility of a duopoly.
Despite government measures, most telecom service providers are suffering losses and a one-time spectrum charge would lead to a financial burden of ₹400 bn, the DoT told the apex court.
The decision will have to be taken after scrutiny, though. The telecom department has sought three weeks for review.
Meanwhile, Bharti Airtel shares also inched higher in trade today, reacting to the development.
Another media report said that the Centre is exploring how to abolish the existing spectrum usage charge as part of the next set of reforms, having scrapped the fees for airwaves to be brought in future auctions. This is also likely to have boosted investor sentiment.
Bharti Airtel and Vodafone Idea share price ended the day up by 2.6% and 1.2%, respectively.
Speaking of the stock markets, a right investing process can help you win in the long term. It might offer some unexpected and undesirable results in the short term but lets you fare well when you average the outcomes.
According to Richa Agarwal, Senior Research Analyst at Equitymaster, any investment process should not be judged based on individual outcomes. Instead, it should have stood the test of the time.
Her smallcap service Hidden Treasure has had its fair share of failures. But sticking to a disciplined process meant that Hidden Treasure's internal rate of return (IRR) increased to 24.38% since inception. This compares favourably to the IRRs of 9.6% for the Sensex, and 8.8% for the smallcap index in the same period (February 2008 - June 2020) as can be seen in the chart below.
The service's performance did suffer in the short term after the 2018 crash in smallcaps. However, the long term track record and the post Covid rebound underscores the strength of stock picking process.