5 Reasons Why Sensex Ended 873 Points Higher Today

Tue, 3 Aug Closing

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Indian share markets witnessed positive trading activity throughout the day today and ended on a strong note.

Benchmark indices came out of their long slumber and recorded their sharpest intra-day gains since May 21 as better-than-expected June quarter performance by India Inc restored investor confidence in faster-than-expected economic recovery.

At the headline level, the BSE barometer of 30-shares zoomed 937 points in the intra-day deals and hit a record high level of 53,888 on the BSE. The broader Nifty50, meanwhile, hit new peak of 16,147 on the NSE.

At the closing bell, the BSE Sensex stood higher by 873 points (up 1.7%).

Meanwhile, the NSE Nifty closed higher by 246 points (up 1.6%).

Titan and HDFC were among the top gainers today.

JSW Steel and Shree Cement, on the other hand, were among the top losers today.

The SGX Nifty was trading at 16,145, up by 234 points, at the time of writing.

Both, the BSE Mid Cap index and the BSE Small Cap index ended the day up by 0.2%.

On the sectoral front, gains were largely seen in the banking sector, auto sector, and FMCG sector.

Shares of Havells India and Jubilant FoodWorks hit their respective 52-week highs today.

Asian stock markets ended on a mixed note today as the Delta coronavirus variant spread in key markets in the region and put Chinese authorities on high alert, rattling investor confidence.

The Hang Seng and the Shanghai Composite ended the day down by 0.2% and 0.5%, respectively.

The Nikkei ended down by 0.5% in today's session.

US stock futures are trading on a positive note today with the Dow Futures trading up by 157 points.

The rupee is trading at 74.26 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.5% at Rs 47800, per 10 grams.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani shares which stocks he thinks are ready to zoom, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Here are 5 Factors That Helped the Market Rally

Positive Macro Data: The market seems to be taking comfort from improving macroeconomic numbers.

Goods and service tax (GST) collections for July 2021 rose to Rs 1.2 tn, triggering hopes of a recovery in the economy.

Besides, June data indicates that the key industrial sectors are seeing a gradual recovery in output amid a waning second Covid-19 wave.

India's merchandise exports also shot up in July, rising 47.9% compared to July 2020. Exports also rose by 34.1% compared to July 2019, before the pandemic struck.

PMI Expands: The IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 55.3 in July compared to 48.1 in June, according to a media statement.

That's the fastest pace of growth in three months. A reading above 50 indicates economic expansion.

Yields fall Further: Equity valuations elsewhere have already been supported by a steady decline in bond yields.

The benchmark 10-year Treasury yield was down 5.5 basis points (bps) at 1.1839%, extending a pattern of declines playing out since the spring.

Healthy June Quarter Results: Despite lockdowns in the first quarter of the current financial year 2022, corporate earnings have largely been able to meet market expectations.

The June quarter earnings season has been in-line with analysts expectations.

Nifty profits for the 31 companies that have posted their results have grown 70% year on year (YoY) against the expected 64% YoY growth.

Sectoral Performance: Healthy buying in most sectors pushed domestic equities to record high levels in the intraday trade today despite subdued global cues.

Banking, telecom, and FMCG sectors witnessed huge buying interest today. The banking sector ended the day up by 1.6% today, while the telecom sector and FMCG sector ended their day higher by 1.7% and 1.6%, respectively.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

In news from the cement sector, Orient Cement was among the top buzzing stocks today.

Shares of Orient Cement hit an over three-year high of Rs 171.9, up 5.8% on the BSE in intra-day trade today after the company reported good operational performance for the quarter ended June 2021.

Its earnings before interest, taxes, depreciation, and amortization (EBITDA) margins improved 250 basis points (bps) sequentially at 27.3% in the quarter one of the year 2022. The stock of CK Birla group company was trading at its highest level since January 2018.

Orient Cements' operating revenue declined 17% quarter on quarter (QoQ) to Rs 6.9 bn from Rs 8.3 bn in the previous quarter.

The company reported a profit after tax (PAT) at Rs 886 m, down 10% QoQ.

On year on year (YoY) basis, the company's PAT more-than-doubled from Rs 256.1 m in June quarter.

Orient Cement said during the previous quarter, the company had reclassified mining expenditure incurred for limestone extraction from other expenses to cost of raw materials consumed for better presentation taking into consideration the nature of underlying expenditure.

During the quarter, the company has made a payment towards subscription and acquisition of 26% stake in the share capital of AMP Solar Systems Private Limited through a combination of equity shares and compulsory convertible debentures (CCD), with the total cost of acquisition of Rs 40.5 m approximately.

The purpose of such acquisition is to set up a solar power plant in Maharashtra under captive scheme for the company's grinding unit at Jalgaon.

Orient Cement is a mid-sized (8.0 MT) cost-efficient player in the cement space.

Orient Cement share price ended the day up by 2.4% on the BSE.

Speaking of the stock markets, a right investing process can help you win in the long term. It might offer some unexpected and undesirable results in the short term but lets you fare well when you average the outcomes.

According to Richa Agarwal, Senior Research Analyst at Equitymaster, any investment process should not be judged based on individual outcomes. Instead, it should have stood the test of the time.

Her smallcap service Hidden Treasure has had its fair share of failures. But sticking to a disciplined process meant that Hidden Treasure's internal rate of return (IRR) increased to 24.38% since inception. This compares favorably to the IRRs of 9.6% for the Sensex, and 8.8% for the smallcap index in the same period (February 2008 - June 2020) as can be seen in the chart below.

The service's performance did suffer in the short term after the 2018 crash in smallcaps. However, the long term track record and the post Covid rebound underscores the strength of stock picking process.

If you are interested in becoming a Hidden Treasure subscriber, here's where you can sign up.

Moving on to news from the IPO space...

Beauty Startup Nykaa Files DRHP to Raise Funds Via IPO

Nykaa, an e-commerce startup for beauty products, has filed a draft red herring prospectus (DRHP) with the market regulator to raise funds via an initial public offering (IPO).

FSN E-Commerce Ventures, owner of Nykaa, is looking to raise Rs 5.3 bn through a fresh issue of shares and an offer for sale (OFS) of up to 43.11 m shares by existing shareholders and promoters.

The OFS comprises sale of up to 4.8 m shares by promoter Sanjay Nayar Family Trust.

Investors such as TPG Growth IV, Lighthouse India Fund III, Lighthouse India III Employee Trust, JM Financial and Investment Consultancy, Sunil Kant Munjal, among others, will also sell their stake in the OFS.

Nykaa was founded in 2012 by investment banker Falguni Nayar.

Currently, Falguni Nayar Family Trust and Sanjay Nayar Family Trust hold 22.33% and 25.72% stake, respectively, in the firm.

Kotak Mahindra Capital, Morgan Stanley India, Bofa Securities, Citigroup Global markets India, ICICI Securities, JM Financial are the book running lead managers to the issue.

Nykaa will allocate Rs 350 m from the proceeds of the issue for investment in its arms FSN Brands or Nykaa Fashions to set up new retail stores.

Another Rs 350 m and Rs 1.3 bn will be used for capital expenditure and repayment of debt.

Nykaa will use Rs 2 bn to enhance the visibility and awareness of its brands.

The firm is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers.

It will have a diverse portfolio of beauty, personal care and fashion products, including its owned brand products manufactured by it.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates 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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