Sensex opens flat; HCL Tech, Infosys, Cipla among the big losers

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The Hang Seng is up 1.3% while the Nikkei is trading down 0.4%.

In US equity markets, Wall Street indices ended on a mixed note, with markets assessing the risk that the congressional standoff could lead to a US government shutdown.

The Dow Jones Industrial Average ended on a flat note while the Nasdaq fell 0.5%.

Back home, Indian stock markets opened on a flat note, following the trend on SGX Nifty.

The ESB Sensex trades 78 points. Meanwhile, the NSE Nifty is trading down 13 points.

SBI and UltraTech Cement are among the top winners today. HCL Tech, on the other hand, is among the big losers today.

The BSE Mid Cap Index and BSE Small Cap Index both opened on a flat note.

Sector indices trade in a mix with stocks from the FMCG sector and the oil and gas sector showing long interest.

Computer stocks and real estate stocks, on the other hand, are trading in the red.

Tejas Networks and Allcargo Logistics shares today hit their 52-week highs.

The rupee is trading at 73.83 against the US dollar.

The price of crude oil eased today after a five-day rally as investors took profits fearing higher prices would weaken demand for fuel.

Gold prices are trading down 0.2% at ??45,998 for 10 grams.

Meanwhile, silver prices are trading down 0.1% to ??60,500 per kg.

Gold eased today, affected by a stronger dollar and rising US Treasury yields, as investors awaited more information from Federal Reserve officials on the bank’s change in monetary policy central.

While gold is often viewed as a hedge against higher inflation, a rise in rates would increase the opportunity cost of holding gold, which earns no interest.

Speaking of the precious yellow metal, how lucrative has gold been as a long term investment in India?

The chart below shows the annual returns of gold over the past 15 years.

View full picture

Gold price.

As you can see, except in 2013 and 2015, gold has generated positive returns in 13 of the past 15 years.

In the news of the textile sector, Raymond is one of the most popular values ​​today.

On Monday, Raymond announced an organizational restructuring plan that will see his fast fashion business consolidate with the parent company and the auto component and tool and hardware businesses merge into its engineering division.

Meanwhile, its fledgling real estate division will become a wholly owned subsidiary of the company.

The restructuring plan aims to monetize its assets, reduce its debt and improve operational synergies.

In a statement, President Gautam Singhania said:

We are consolidating the business to explore all the options available to us for monetization, which will allow deleveraging leading to value creation.

In November 2019, the company announced the split of its clothing business held under Raymond Apparel.

The split plan has been withdrawn and the lifestyle activity will be transferred to Raymond in order to streamline the group’s B2C activities.

Raymond’s share price opened the day up 4%.

Turning to automotive news, India’s largest photovoltaic panel maker Maruti Suzuki told its component suppliers to be ready to produce 160,000 to 180,000 cars and SUVs in October as it takes steps to guarantee the supply of semiconductor chipsets via multiple channels.

If Maruti succeeds in meeting this target, production in October would be 60-80% higher than in September, and about 5% lower than a year earlier.

Due to the global semiconductor shortage, Maruti has been forced to limit production this month to around 100,000 units.

Reports indicate that the company’s ability to source chips may have improved with the easing of the Covid-19 situation in Malaysia. The Southeast Asian country’s chip manufacturing facilities are now operating seven days a week in three shifts.

About two-thirds of the targeted production will likely be managed from Maruti Suzuki’s own facilities in the National Capital Region. The rest will come from Suzuki Motor Gujarat, another Indian unit of parent company Suzuki Motor of Japan.

However, according to industry insiders, there is no guarantee that Maruti will reach the target.

They say the advice was likely aimed at keeping the provider’s network ready in case the availability of the chipset improves.

The company is also urging suppliers to prepare for production of more than half a million in the October-December quarter. This suggests 7.5% production growth from the previous year during the crucial holiday season.

Maruti Suzuki’s share price opened the day up 0.3%.

(This article is syndicated from Equitymaster.com)

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