Sensex Today Zooms 910 Points | Titan & Adani Ports Rally 6% | 5 Reasons Why Indian Markets are Rising

Fri, 3 Feb Closing

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After opening the day higher, Indian share markets continued their momentum throughout the day and ended on a firm footing.

Benchmark indices bounced back in style, supported by a decent rally in finance stocks and amid optimism that the rate hike cycle may be near its end after global central banks hinted at inflation easing.

Meanwhile, the ongoing rout in Adani group stock capped gains.

At the closing bell on Friday, the BSE Sensex stood higher by 910 points (up 1.5%).

Meanwhile, the NSE Nifty closed up by 243 points (up 1.4%).

Adani Ports, Titan, and HDFC Bank were among the top gainers today.

Divis Laboratories, BPCL, and Hindalco, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,840 up by 201 points, at the time of writing.

Broader markets ended on a negative note with the BSE Midcap index ending flat and the BSE SmallCap index ending 0.4% lower.

Sectoral indices ended on a mixed note with stocks in the finance sector and auto sector witnessing buying.

While stocks in power sector, oil & gas sector and energy sector witnessed selling.

Shares of Britannia, M&M, and Blue Star hit their 52-week highs today.

Asian stock markets ended on a mixed note. The Nikkei gained 0.4%, while the Hang Seng was down 1.4%. The Shanghai Composite ended 0.6% lower.

The rupee is trading at 82.89 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.3% at Rs 57,518 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading lower by 0.5% at Rs 69,859 per kg.

5 Reasons why Indian Share Markets Rallied Today

#1 Upbeat global cues

After overnight rally on Wall Street, Asian markets too were buoyant. South Korean shares gained 0.5%, while Tokyo's shares climbed 0.4%.

Upbeat global cues added to sentiment and sent Indian shares higher.

#2 Dollar takes a back seat

The rupee has been falling for quite some time now and this falling trend reversed today as it appreciated. The rupee appreciated by 12 paise to 82.1 against the dollar, tracking the positive trend in equity markets, easing crude oil prices and a positive trend in domestic equities.

Rupee's appreciation often attracts FIIs as it adds to the return for foreign investors.

#3 Buying in heavyweight stocks

High weightage finance stocks rose ahead of earnings of the country's largest lender State Bank of India (SBI). Heavy buying was seen in SBI Life Insurance and HDFC Life Insurance post a fall in most insurance stocks.

#4 FII and DII buying

So far in February 2023, foreign institutional investors (FII) bought shares worth a net Rs 17.8 bn, while domestic institutional investors (DIIs) have made net purchases to the tune of Rs 5.3 million (m), becoming net buyers.

#5 Adani stocks bounce back

After witnessing a crash of around 35% in early trade, Adani Enterprises recovered losses as the session progressed and ended 1% lower.

Other stocks too recovered with Adani Ports, ACC and Ambuja Cement ending on a positive note.

Speaking of stock markets, SBI has been caught up in the recent market volatility due to the Adani-Hindenburg saga.

There are contradictory views on the stock. Some say the stock is a great buy. Others warn of the dangers from a possible fallout from the Adani group.

But what do the charts say?

In the below video, chartist Brijesh Bhatia discusses what he thinks about trading SBI based on the latest technical chart patterns.

Tune in to the video to know more.

Adani Group rout erases half of group value

The pressure on Gautam Adani to swiftly address concerns over his conglomerate's financial health intensified as the brutal rout in its stocks wiped out more than half the value of his companies since short-seller Hindenburg Research's report.

About US$118 billion was erased from the market capitalization of his 10 stocks.

Flagship Adani Enterprises swung between a loss of 35% and a gain of about 7% on Friday amid a series of big trades. This was due to its removal from Dow Jones Sustainability Indices, effective before opening on Tuesday, 7 February 2023.

Six of the other nine stocks declined.

However, the group is currently in talks with creditors to prepay some loans backed by pledged shares, as some banks have stopped accepting the securities of the group that spans from ports to energy as collateral in client trades.

Check out the technical analysis which Brijesh has shared in this note: Adani Group Stocks: Beginning of an End?

It remains to be seen how the Adani vs Hindenburg battle pans out.

Bank of Baroda Q3 Profit jumps 75%

Moving on to news from the banking sector, shares of Bank of Baroda rallied 6% today.

This rally was seen after the bank reported a 75% year-on-year (YoY) rise in net profit to Rs 38.5 bn. This robust jump was due to strong net interest income growth.

Its interest income rose to Rs 235.4 bn from Rs 179.6 bn a year ago.

The net interest income rose 26.5% YoY to Rs 108.2 bn for the December 2022 quarter. This comes on the back of a robust loan growth of 19.7% and an improvement in net interest margins.

Provisions declined 4% YoY to Rs 24 bn for the quarter under review. In the same period of the previous year, the bank's provisions totaled Rs 25.1 bn.

Together with healthy NII growth and modest provisions, the bank's operating profit surged 50% YoY to Rs 82.3 bn.

Its net interest margin improved to 3.4% for the December 2022 quarter.

Its asset quality metrics showed significant improvement, with the share of bad loans in the overall loan book falling.

The bank rallied over 100% in 2022, making it among the biggest gainers. To know how it is set up for 2023, check out the 5 biggest gainers of 2022. Will their dream run end in 2023?

Why Divis Lab share price is falling

Moving on to news from the pharma sector, shares of Divis Laboratories plunged 13% intraday.

This downfall was as the company posted weak results for the December 2022 quarter, disappointing investors. The stock of the pharmaceutical company was quoted at its lowest level since August 2020.

Divis Labs reported a 66% YoY decline in its consolidated net profit at Rs 3.1 bn, on a higher-than-expected fall in revenue.

The company's consolidated revenue came 31.5% YoY lower to Rs 17.1 bn.

Earnings before interest, depreciation, tax and amortization (EBITDA) was down 63% YoY to Rs 4.1 bn from Rs 10.9 bn in the year-ago period. EBITDA margins contracted sharply to 23.9% from 44% in the December Q3 quarter.

This fall in earnings was due to a rise in material consumption cost due to a change in product mix.

This isn't the first time shares of the company have seen a such sharp decline, it saw a steep decline in August 2022 too.

Check out why Divi's Lab share was falling back then.

The stock is taken to the cleaners, losing 35% from the top. To find out more, check out how much more can Divis Labs Fall?

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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