Share markets in India are presently trading on a positive note. Sectoral indices are trading mixed with stocks in the realty sector, metal sector and automobiles sector witnessing buying interest while telecom stocks and oil & gas stocks are witnessing selling pressure.
The rupee is trading at Rs 69.22 against the US$.
Speaking of the general mood in Indian stock markets these days, a lot of market participants are playing the prediction game ahead of the elections.
A common theme is to sit on cash to escape the volatility ahead of the upcoming elections. In case there is an unexpected event, you can then get in post the correction.
But does timing the market work?
Not really, if you see the market performance in the year of the past three national elections (2004,2009 and 2014).
Downside of Timing The Stock Market
Looking at the returns in the above chart, staying out of the market to escape volatility would have been a costly affair every time.
The market gave above average returns in all three of those years.
This does not mean one can expect the same in the future.
But there’s one thing for sure. Predicting short-term directions of the market is a futile and many a times a costly affair.
That’s why we believe in picking safe stocks when they are actually ‘safe’ i.e. during such times of high pessimism and uncertainty.
Moving on, market participants are tracking Tata metalik share price, TV18 Broadcast share price, and Hathway Cable share price as these companies are set to announce their Q4FY19 results later today.
In the news from the pharma sector, Wockhardt share price is in focus today after the company said that the USFDA’s inspection of its Bioequivalence centre in Aurangabad yielded no observations.
As per an article in The Economic Times, in a regulatory filing, the company said no observations were made after the US drug regulator inspected its Bioequivalence centre during which Bioequivalence studies of Tamsulosin 0.4mg capsules and Metoprolol Tartrate 200mg ER tablets were audited.
Here’s an excerpt from the article:
- At the end of inspection, there was nil observation (i.e. zero 483 observation), signifying that best practices were followed, in compliance to applicable regulations. This outcome would lead approvals of ANDAs in pipeline for which Bioequivalence studies are being or will be done in the said centre.
In other news, Suven Life Science has received approval from a US bankruptcy court to buy assets of Rising Pharmaceuticals through its joint venture partner Shore Suven Pharma Inc.
The company has completed a ‘stalking horse agreement’ as mandated by a bankruptcy court to buy the assets of Rising Pharmaceuticals. A stalking horse agreement refers to an initial bid for a bankrupt company’s assets and sets the lower limit in a bankruptcy auction.
Suven Life Science share price is presently trading up by 0.5%.
Moving on to the news from the aviation space, after announcing six new domestic flights last week, SpiceJet share price announced the launch of a slew of new international flights from Mumbai to Colombo, Dhaka, Riyadh, Hong Kong, Jeddah, and Kathmandu.
The airline which had earlier said it will take on lease 16 new aircraft, will deploy Boeing 737 NG aircraft in the new routes.
Shares of the company are trading 6% higher on back of the above news.
Earlier, reports stated that SpiceJet and IndiGo will add close to 50 aircraft over the next few months to fill up the capacity shortage caused by the crisis in Jet Airways as well as the grounding of Boeing 737 Max planes.
The last two months have seen a sharp reduction in capacity in the domestic market. Jet Airways, which operated 103 planes in October last year is operating just seven planes now. GoAir is operating 10 fewer planes than last month. SpiceJet’s capacity, too, has reduced following the grounding of its 12 Boeing 737 Max aircraft on safety concerns.
In other news, SpiceJet is also hiring engineers and pilots at much lower pay than their current salaries at the financially troubled Jet Airways.
According to reports, pilots from Jet Airways are being asked to take salary cuts of 25-30% while engineers have been advised to settle at 50% of their current pay package.
An executive said that the budget carrier was offering salaries based on their own structure and not the one paid by Jet Airways. A senior commander with Jet Airways said that pilots with 4-5 years of experience are going to other airlines as they are feeling the pinch of salary delays.
Struggling with a mounting debt of more than Rs 85 billion, Jet cancelled all international operations along with several domestic flights last week.
Jet was expecting emergency funding of at least Rs 15 billion to be released by the lenders to meet its operational requirements after Goyal pledged his shares.
How this pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.
This article (Sensex Trades Over 100 Points Higher; Tata Motors & TCS Top Gainers) is authored by Equitymaster.