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Sensex Today Gains 211 Points | Tyre Stocks Rally while Metals Drag | 4 Reasons Why Indian Share Markets Hit Record High
Mon, 28 Nov Closing

Sensex Today Gains 211 Points | Tyre Stocks Rally while Metals Drag | 4 Reasons Why Indian Share Markets Hit Record High

After opening the day lower mirroring weakness in Asian peers, Indian share markets staged a comeback and ended the trading session on an optimistic note.

Benchmark indices Sensex and Nifty hit new records following heavy gains from Reliance and other oil marketing companies as crude prices fell.

Adding to sentiment was a Reuters poll showing the Indian economy likely returned to a more normal 6.2% annual growth rate in the quarter ended September, after clocking double-digit expansion in the previous quarter.

India's GDP data is due later this week on Wednesday.

At the closing bell, the BSE Sensex stood higher by 211 points (up 0.3%).

Meanwhile, the NSE Nifty closed higher by 50 points (up 0.3%).

Reliance Industries, Nestle, and Asian Paints were among the top gainers today.

Tata Steel, HDFC Bank, and Bharti Airtel, on the other hand, were among the top losers today.

The SGX Nifty was trading at 18,700, up by 42 points, at the time of writing.

Broader markets settled on a firm note with smallcaps and midcaps both rising in line with benchmark indices.

The BSE MidCap gained 0.8% while the BSE SmallCap index ended 0.7% higher.

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

While metal stocks and telecom stocks witnessed selling.

Chartist Brijesh Bhatia believes the rally in energy stocks could continue for the next couple of months.

Shares of TVS Srichakra and ION Exchange hit their 52-week highs today.

Continuing the downtrend, Paytm share price fell 4% today after the Reserve Bank of India (RBI) asked the company's subsidiary Paytm Payment Services not to onboard new online merchants. This was in response to an application the company had filed for a payment aggregators license.

Meanwhile, IEX share price fell over 2% after its board approved share buyback plan worth Rs 980 million.

If you're interested in knowing which shares to trade, read our guide on the best intraday stocks for today.

Asian share markets ended on a negative note as investors worried about rising Covid-19 cases in the region.

The Hang Seng fell 1.6% while the Shanghai Composite ended 0.8% lower. The Nikkei ended down by 0.4%.

US stock futures are trading on a negative note today tracking China concerns. Dow futures are trading down by 0.7% while Nasdaq futures are down by 1% or 130 points.

The rupee is trading at 81.65 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.2% at Rs 52,635 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading up by 0.2% at Rs 61,795 per kg.

4 reasons why Indian share market is rising

#1 Fed commentary -

Last week on Wednesday, the US Fed presented dovish minutes from their November policy meeting which helped support stocks globally.

Investors are of the view that the US fed will slow down the pace of rate hikes.

#2 FII & DII buying -

In November so far, FIIs have poured in around US$4 billion (bn) of funds.

Meanwhile, DIIs have also consistently bought the dip in recent months. Although they been taking advantage of the FII inflow in November to turn net sellers.

#3 Dollar's weakness, India's gain -

After slipping below the 83-mark against the US dollar in recent months, the domestic currency rupee is now above the 82-mark.

The US dollar index, which hit multi-year high of 114.78, has now cooled down to 106 levels.

#4 Falling crude oil -

Crude oil prices have fallen to US$80 a barrel mark, its lowest level since January this year. A fall in oil prices is positive for India's oil import dependent economy.

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PSU Stock Doubles in Less than a Month

Share price of Rail Vikas Nigam (RVNL) hit a new high of Rs 80 today as the stock rallied 10%. So far in November 2022, the stock price has almost doubled from a level Rs 40.

The company and its subsidiaries are engaged in the business of implementing various types of rail infrastructure projects assigned by Ministry of Railway (MoR).

The sharp rise in one month comes on the back of RVNL securing multiple orders. On 11 November, RVNL announced that the company has been declared successful bidder in an international project in Maldives.

This is a strategic project of Government of India and the estimated project cost is approximately Rs 15.4 billion (bn).

Prior to this, on 4 November, the company said that it was awarded a contract worth of Rs 1.4 bn for increasing speed potential to 160 KMPH in Pradhankhanta - Bandhua section of Dhanbad Division under East Central Railway.

Note that India is on its way to construct more national highways and rail lines in the decade between 2015-2025 than it has cumulatively done between 1950 and 2015. Huge capex announcements have already been made and more are in the offing.

As a result, railway stocks have seen an up move in recent weeks.

For instance, IRCON shares have gained more than 50% while Rites is up 40% in less than three months.

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Latest on IDBI Bank Privatisation

Moving on to news from the banking sector, IDBI Bank will maintain the status of private sector bank after its strategic sale. In addition, it will not be subject to the norms applicable to a state-run company after its privatisation.

On Sunday, the finance ministry clarified that an appropriate dispensation for IDBI Bank's new owner to achieve minimum public shareholding (MPS) is under consideration.

The winning bidder will have no restriction on undertaking corporate restructuring of the subsidiaries of IDBI Bank.

The deadline to submit expression of interest (EoI) is 16 December.

The successful bidder will have to make an open offer for the acquisition of 5.28% of the public shareholding.

Once IDBI Bank is disinvested, the DIPAM noted that the government or the LIC will not be obligated to infuse capital into the lender.

Approval for 18 Insurance Companies in Pipeline

Moving on, the insurance regulator is in favour of issuing composite licenses, which is a common license to operate in life and general insurance market, IRDAI Chairman Debasish Panda told in an interview.

He said that the last approval for a new insurance company was granted in 2017.

Reportedly, 18 more insurance companies are in the pipeline, looking for licenses.

The Insurance Regulatory and Development Authority of India (IRDAI) has suggested the government to ease the minimum capital requirement of Rs 1 bn and permit the regulator to fix the amount depending upon business plans of the prospective company.

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If this is done, it would allow entry of small, specialised and niche players, which could help in increased insurance penetration and density in the country.

Since insurance stocks interest you, check out the top insurance companies in India on Equitymaster stock screener.

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

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