5 Factors Behind the Stock Market Rally, RBI Monetary Policy Highlights, and Top Buzzing Stocks Today

Mon, 7 Dec Pre-Open

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Indian share markets ended on a strong note on Friday.

The Sensex crossed 45,000-mark for the first time, as the RBI upgraded its GDP target for the current fiscal year and kept interest rates steady in the face of stubbornly high inflation.

At the closing bell on Friday, the BSE Sensex stood higher by 447 points (up 1%).

The NSE Nifty closed higher by 125 points (up 1%).

ICICI Bank and UltraTech Cement were among the top gainers.

Both, the BSE Mid Cap index and the BSE Small Cap index ended up by 0.4%.

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

Market participants were tracking travel related stocks. IRCTC share price zoomed 15% as Covid-19 vaccine related optimism continued to boost travel related stocks. Meanwhile, InterGlobe Aviation and SpiceJet also surged in the range of 5-10% on Friday.

Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 49,344 per 10 grams at the time of closing stock market hours on Friday.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Speaking of stock markets, the past month was a staggering one. Benchmark indices saw huge buying interest and went on to touch record-high levels.

The BSE smallcap index was up 13% in November.

The BSE smallcap index has risen more than 10% in a month only 6 times in the last decade.

Foreign investors (FIIs) invested a net amount of around Rs 650 billion in November. This is the biggest purchase by FIIs by a big margin so far.

Will this rally in Indian share markets continue ahead?

We reached out to Brijesh Bhatia, our new team member and Research Analyst of Fast Profits Reports, for his view on the Indian stock markets.

Here's what he had to say...

• The bulls celebrated Diwali with fireworks and started Samvat 2077 with a roar.
  
  The Nifty gained 11.4% in the month of November. 80% of the trading days ended on positive note. Midcap and Small Cap indices gained 15.5% and 13% respectively.
  
  We had 20 trading days in November 2020. 16 of them ended on positive note with 8 straight days of gains from 2nd to 11th November.
  
  The Nifty has now turned positive for CY2020 and has hit a new all-time high of 13,145.85.
  
  All sectorial indices ended on a positive note for the month.
  
  Metals (24.84%), Private Banks (24.25%), PSU Banks (23.63%), and Financial Services (22.84%) gained more than 20%.
  
  Sectors like IT (4.05%) and Pharma (5.30%) which has outperformed in the first leg of rally, were the underperformers.
  
  The stocks in Nifty 200 were on fire too. Out of 200 stocks, 179 ended on a positive note which means 90% stocks were in green zone.
  
  The broad-based buying indicates the momentum is still in the bull's favour. Entering the month of December, can this momentum prolong?
  
  Well, if we look at the seasonality chart for Nifty 50, December tends out to be the best month for bulls with an average return of 3.43% since 1996.
  
  Hope we have a Santa rally this Christmas too and end the pandemic year near all-time high levels!

You can read Brijesh's detailed profile here.

And in case you missed his first Equitymaster video, you can watch it now.

Top Stocks in Focus Today

Among the buzzing stocks today will be Bharti Airtel.

According to the Telecom Regulatory Authority of India, Bharti Airtel surpassed Reliance Jio in new mobile subscriber addition in September after a gap of four years.

Bharti Airtel led mobile subscriber growth in September 2020 with a net addition of 3.8 million new customers. It was followed by Reliance Jio with net addition of 1.5 million and BSNL with 78,454 new customers.

Vodafone Idea was the biggest loser as it lost 4.6 million subscribers during the reported month. MTNL and Reliance Communications lost 5,784 and 1,324 customers, respectively.

The total telecom subscriber base in the country increased marginally to 1,168.7 million in the reported month from 1,167.8 million in August.

Market participants will track Interglobe Aviation (IndiGo) share price and SpiceJet share price as it was reported that airlines in India will be able to sell seats up to 80% of their pre-covid capacity on domestic flights, up from the existing 70%, in a further relaxation of restrictions in the sector hammered by the covid-19 pandemic.

Granules India share price will also be in focus today as the US Food & Drug Administration (USFDA) has approved the abbreviated new drug application (ANDA) filed by Granules Pharmaceuticals (GPI), a wholly-owned foreign subsidiary of Granules India, for Penicillamine capsules USP, 250 mg.

Penicillamine capsules are indicated in the treatment of Wilson's disease, cystinuria, and in patients with severe, active rheumatoid arthritis who have failed to respond to an adequate trial of conventional therapy.

Top Factors Why Indian Stock Markets Rallied to Record Highs Last Week

Firm Global Cues: Global stock markets were buoyed on Friday amid positive macroeconomic data flow from China, US stimulus negotiations, and developments on the Covid-19 vaccine front.

India's Covid-19 Vaccine News: Prime Minister Narendra Modi last week said India's vaccination programme against Covid-19 would begin as soon as a go-ahead from scientists is given, and asserted that healthcare workers involved in treating coronavirus patients, frontline workers and old people suffering from serious conditions would be inoculated on priority.

In his closing remarks at an all-party meeting with leaders of various political parties to discuss the pandemic situation, Modi said experts believe the wait for vaccine will not be long and it may be ready in a few weeks.

Bluechips Continue Momentum: Indian share market ended at record highs on Friday as bluechip stocks including Asian Paints, Mahindra and Mahindra, Maruti Suzuki, Tata Steel, Tech Mahindra, Titan and UltraTech Cement hit their fresh 52-week highs.

Revised Growth Prospects: The RBI revised its forecast of economic growth for the current fiscal year (2020-21) to minus 7.5% compared to its earlier forecast of minus 9.5%.

Banking Stocks Rally: The Nifty Bank index rose 2.3% to cross the 30,000-mark on Friday. Banking stocks gained after RBI announced to keep system liquidity in surplus.

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!

RBI Monetary Policy Meet: Interest Rates Unchanged; Economic Growth Forecast Revised

In news from the banking sector, the Reserve Bank of India (RBI) maintained benchmark rates at the same levels of 4% in its policy meet on Friday. The reverse repo rate stays at 3.35%.

This was the third meeting on run that the central bank chose to keep the rates unchanged.

Shares of interest rate sensitive sectors, mainly financials and automobiles, were trading firm after the RBI's decision to keep interest rates unchanged.

The RBI maintained the status quo on the benchmark lending rates in view of persistently high inflation and a lower-than-expected contraction of the economy.

Here are the key highlights from last week's monetary policy:

The RBI revised its forecast of economic growth for the current fiscal year (2020-21) to minus 7.5% compared to its earlier forecast of minus 9.5%. RBI governor Shaktikanta Das said the change in forecast has been prompted by a surge in demand in both rural as well as urban areas.

The second half of the fiscal year is expected to show positive growth despite disruptions caused by coronavirus pandemic, he added.

Das said that retail inflation is seen at 6.8% in third quarter, at 5.8% for Q4FY21, and 5.2-4.6% in H1 FY22.

RTGS system to be made 24x7 in next few days. From January onwards, the limit for contactless card transaction will be upped from Rs 2,000 to Rs 5,000 per transaction.

Regarding NBFCs, Das said a regulatory framework review is needed. Das also committed to do whatever is required to maintain stability of the financial sector. Near-term stability issued has been handled, he added.

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!

Read the latest Market Commentary

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INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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