3 Reasons Why Sensex Rallied 934 Points Today

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Bulls marked a strong rally today as Indian share markets ended over 1.8% higher.

Indian shares markets ended on a strong note as investor sentiment was lifted tracking firm global markets.

Benchmark indices surged and registered their best session in over three weeks led by gains in market heavyweights even as investors grappled with inflation and rate hike worries.

At the closing bell, the BSE Sensex jumped 934 points (up 1.8%).

Meanwhile, the NSE Nifty advanced by 289 points (up 1.9%).

Titan, State Bank of India, and TCS were among the top gainers today.

On the other hand, Nestle was among the top losers today.

The SGX Nifty was trading at 15,612 up by 264 points, at the time of writing.

The broader markets ended on a strong note as the BSE Mid Cap index jumped 2.4% while the BSE Small Cap index climbed 3%.

All sectoral indices ended in green with stocks in the media sector, metal sector, and banking sector witnessing most of the buying.

As Indian share markets have started to recover from the recent meltdown, you must be wondering when will the markets fully recover.

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The rupee is trading at 78.07 against the US$.

Gold prices for the latest contract on MCX are trading flat at Rs 50,754 per 10 grams.

Speaking of stock markets, we have seen that 2022 is the year of market correction. All investors have held their breath hoping that the correction will end soon and that their investments will finally pay them back.

But has the time finally come? Have the markets corrected?

Watch this video from Brijesh Bhatia to know more.

Here are three factors behind today's stock market rally:

Positive global cues: There were no negative cues from the US market as the Wall Street was shut overnight on account of a public holiday.

At the time of writing, US stock futures were trading on a positive note with the Dow Futures trading up by 506 points.

European stock markets are trading higher, extending the rebound aided by gains in chemical, mining, and oil stocks as dip buyers emerged after a bruising sell-off last week on recession fears.

Barring Shanghai, Asian stock markets ended on a firm note as some stability returned to the markets after last week's hefty losses.

The Nikkei climbed 1.8% while the Hang Seng jumped 1.9%. On the other hand, the Shanghai composite ended down by 0.3%.

Bargain hunting in heavyweights: The trading session witnessed bargain hunting in bluechip stocks.

Stocks like the Tata Steel, HDFC duo, IT majors Infosys and TCS, and Reliance Industries contributed the rally in the benchmark indices.

Bargain hunting coupled with a recent fall in the rupee boosted IT shares that generate a major chunk of their revenues from exports.

Ease in commodity prices: India is a very commodity-dependent market and the country has been importing most of its inflation. As oil and metal prices have started to ease off, that is where markets are going to benefit from.

International crude oil prices have come off their recent highs and declined on fears of the possibility of a recession in the global economy following aggressive monetary policy tightening by central banks and the likelihood of a weak demand outlook for the commodity.

In news from the mutual fund space, the market regulator has permitted mutual funds to again invest in foreign stocks within the aggregate mandated limit of US$ 7 bn for the industry.

In January, the market watchdog had asked mutual fund houses to stop taking fresh subscriptions in schemes investing in overseas stocks.

The directive to stop subscription was mainly on account of the mutual fund industry crossing the mandated limit of US$ 7 bn for overseas investments.

The recent meltdown in global stocks reduced the cumulative value of investments made by all the mutual fund houses together.

Meanwhile, Edelweiss Mutual Fund announced that it will be accepting inflows in its international schemes from Tuesday.

Speaking of mutual funds, have a look at the chart below which shows the inflows into mutual fund equity investments for the past couple of months.

May 2022 was the 15th straight month of inflows.

This just shows that despite the hawkish US Fed stance, rising inflation, crude oil concerns, and the Russia-Ukraine war, retail investors' confidence in the India growth story remains intact.

Also, have a look at the top 10 mutual funds with high returns.

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Moving on to news from initial public offer space, India Exposition Mart, a leading integrated exhibitions and conventions venue, has received the market regulator's nod to raise Rs 6 bn.

India Exposition Mart had filed a preliminary prospectus in March 2022 with the market regulator to raise funds through an initial share sale.

As per the draft red herring prospectus, the IPO comprises fresh issue of equity shares aggregating up to Rs 4.5 bn and an offer for sale of up to 11.2 m equity shares by existing shareholders.

Those offering shares in the offer for sale include Vectra Investments, MIL Vehicles & Technologies, Overseas Carpets, RS Computech, Navratan Samdaria, Dinesh Kumar Aggarwal, and Pankaj Garg.

Going by the draft papers, the firm may consider a private placement of equity shares aggregating up to Rs 750 m.

If such pre-IPO placement is undertaken, the fresh issue size will be reduced.

Of the Rs 4.5 bn fresh issuance, the firm is aiming to use around Rs 3.2 bn for expansion of its existing infrastructure facilities, Rs 0.17 bn for the payment of debt, and the remaining for general corporate purposes.

What response does the IPO get in these choppy markets remains to be seen.

We will keep you updated with the recent developments from this space.

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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