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Asian share markets fell in early trade today hit by worries about the Omicron coronavirus variant and a hawkish tilt at the US Federal Reserve.

Markets however pared most of these losses on bargain-hunting in quality stocks.

The Nikkei is down 0.5% while the Shanghai Composite is up 0.1%. The Hang Sang gained 0.3%.

In US stock markets, Wall Street indices fell more than 1% on Wednesday after a morning rally faded as investor angst about the latest coronavirus variant soared with the first US case confirmation. The market also digested Fed comments on inflation.

The Dow Jones Industrial Average tanked 1.3% while the Nasdaq Composite declined 1.8%.

Back home, Indian share markets opened on a positive note, defying the trend on SGX Nifty. Benchmark indices started higher amid mixed global cues.

The BSE Sensex is trading up by 362 points. Meanwhile, the NSE Nifty is trading higher by 104 points.

Power Grid and M&M are among the top gainers today. Axis Bank, on the other hand, is among the top losers today.

The BSE Mid Cap index and the BSE Small Cap index are trading higher by 0.3% and 0.6%, respectively.

Barring realty and banking stocks, all sectoral indices are trading in green with stocks in the FMCG sector and energy sector witnessing most of the buying.

Shares of BEML and Torrent Power hit their 52-week highs today.

The rupee is trading at 75.01 against the US$.

Gold prices are trading up by 0.4% at 47,783 per 10 grams.

Meanwhile, silver prices are trading down by 1.1% at 60,772 per kg.

Crude oil prices rose today, reversing previous day's losses, on expectations OPEC+ may pause supply additions amid growing concern the spread of the Omicron coronavirus variant could weigh on the global economy and fuel demand.

Speaking of the current stock market scenario, despite the BSE Small cap index being up more than 3x since March 2020 lows, 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.

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

In news from the automobile sector, Tata Motors said its total sales increased by 25% to 62,192 units in November as compared to the same month last year.

The company had dispatched 49,650 units in November 2020.

The auto major posted a 21% increase in its domestic wholesales at 58,073 as compared with 47,859 units in the year-ago period.

Its passenger vehicle sales in the domestic market stood at 29,778 units in November, as compared to 21,641 units in the same month last year.

Meanwhile, commercial vehicle sales in the domestic market stood at 32,245 units, up 15% from 27,982 units in November 2020.

In other news, Maruti Suzuki India reported 9% decline in total sales at 1,39,184 units in November with electronic components shortage impacting production.

India’s largest carmaker had sold a total of 1,53,223 units in the same month last year.

Total domestic sales were down 18% at 1,17,791 units last month as compared to 1,44,219 units in November 2020.

In a regulatory filing, the company said,

The shortage of electronic components had a minor impact on the production of vehicles during the month. The shortage primarily affected the production of vehicles sold in the domestic market. The company took all possible measures to minimise the impact.

Maruti’s total exports last month were higher at 21,393 units as compared to 9,004 units in November 2020.

Shares of Maruti Suzuki are currently trading up by 0.7%.

Moving on to news from the IPO space, Tega Industries’ initial public offering (IPO) was subscribed 4.67 times on the first day of its issue. The IPO of the Kolkata-based leading manufacturer opened yesterday and will close on 3 December.

The portion reserved for retail individual investors was subscribed by 7.51 times, the highest among the three groups of investors.

Meanwhile, the portion set aside for qualified institutional buyers (QIB) was subscribed 0.07 times. The portion reserved for non-institutional investors was subscribed 4.17 times.

The company plans to raise  6.2 bn at the upper price band. The IPO is entirely an offer for sale (OFS) of 1,36,69,478 equity shares by selling to shareholders and promoters. 

Tega Industries has fixed the price band at Rs 443-453 per equity share for the IPO.

The company offers a wide product portfolio of specialized abrasion and wear-resistant rubber, polyurethane, steel, and ceramic-based lining components used by customers across different stages of mining, mineral processing, and material handling.

In other news, the IPO of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company continued to see tepid response from investors on the second day of the bidding yesterday.

The issue saw 20% subscription as of 5:00 pm, data on NSE showed.

The IPO comprises fresh issue of equity shares worth 20 bn and an OFS of up to 58,324,225 equity shares by promoters and existing shareholders.

The issue, with a price band of 870-900 a share, closes today.

Ahead of the IPO, the company decided to allocate a total of 3,57,45,901 equity shares to 62 anchor investors at 900 apiece, aggregating to 32.2 bn.

How both these IPOs sail through remains to be seen.

This article is syndicated from Equitymaster.com

 

 

 

 

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