4 Reasons Why Sensex Rallied 1,345 Points Today
Closing

4 Reasons Why Sensex Rallied 1,345 Points Today

After opening the day higher, Indian share markets extended gains as the session progressed and ended near the day's high.

Benchmark indices rose for a second consecutive session as heavy buying in index heavyweight stocks improved sentiment.

At the closing bell, the BSE Sensex rallied 1,345 points, ending 2.5% higher.

Meanwhile, the NSE Nifty zoomed 417 points, ending at 16,259.

Tata Steel, Reliance Industries, and ITC were among the top gainers today. All stocks from the Sensex ended in green.

Life Insurance Corporation (LIC) was listed on the exchanges at Rs 865 per share, which is a discount of 9% over issue price. The stock ended its first trading day at Rs 872 apiece on BSE.

With its listing today, LIC became the fifth-largest company in India valued over Rs 6 tn.

The broader markets ended higher as the BSE Mid Cap index surged 2.5% while the BSE Small Cap index jumped 2.8%.

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All sectoral indices ended on a firm note with stocks in the metal sector and energy sector witnessing most of the buying.

Outside the home ground, Asian share markets extended gains and ended on a positive note despite a lower finish on Wall Street.

At the close in Tokyo, the Nikkei 225 rose by 0.4%, while the Hang Seng jumped 3.1%. The shanghai composite added 0.7%.

The SGX Nifty was trading 2.7% higher at the time of writing.

The rupee is trading at 77.54 against the US$.

Gold prices are currently trading up 0.2% at Rs 50,351 per 10 grams while silver is up 0.6% at Rs 61,307 per kg.

Here are four factors why markets surged today:

Hopes of revival: Cues of China relaxing Covid lockdowns in the near term boosted investor confidence. The world's largest consumer is set to relax norms starting June 2022.

Sectoral check: All sectoral indices ended in the green. Metal stocks witnessed heavy buying with Nifty metal index ending over 6.5% higher.

LIC listing: The subdued listing of LIC was in-line with expectations in context to the drop in market dynamics from the opening of the IPO to the listing date.

Refunds to investors, who could not get shares in the allotment process, were made last week on 13 May. It appears they may have diverted part of their capital in equity markets.

Heavyweight stocks rally: Index heavyweight stocks Reliance, ICICI Bank, ITC, Infosys, and Tata Steel among others saw huge buying today.

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Speaking of stock markets, we recently recorded a video on our YouTube channel talking about the 5 most undervalued midcap stocks to add to your watchlist.

In the last two years, while the Nifty 50 gave a return of 81%, the Nifty midcap 100 index has given 126% return.

Wish to find out the attractive midcap stocks amid the recent sell-off? Tune in to the below video to find out:

In news from the automobile sector, Hyundai Motor has partnered with Tata Power for building electric vehicle (EV) charging infrastructure in India.

The association will make Tata Power and Hyundai Motor key contributors toward the expansion and accelerated adoption of EVs across India.

Under the partnership, Tata Power will install fast chargers at Hyundai's existing 34 EV dealer locations across 29 cities along with supply, installation, and commissioning of home charging for the company's EV customers.

This new collaboration, will greatly benefit the consumers and enhance customer convenience as the charging time will be reduced significantly.

Commenting on the strategic partnership, Tata Power's CEO and managing director, Dr Praveer Sinha said:

  • Our collaboration with Hyundai Motor India aligns with the Government of India's National Electric Mobility Mission Plan and demonstrates our commitment to leading India's clean energy and net-zero goals.

    Tata Power's expertise in EV charging space coupled with comprehensive charging solutions and countrywide ownership of Hyundai vehicles, will help in the development of sustainable mobility infrastructure, boosting faster EV adoption.

The charging stations at Hyundai's dealership will be open for all electric vehicle customers.

Speaking of EVs, have a look at the chart below which shows the massive opportunity in the two-wheeler EVs.

chart

Here's what lead Smallcap Analyst at Equitymaster, Richa Agarwal wrote about this in one of the editions of Profit Hunter:

  • In the last five years, two-wheeler sales in India were around 2 crore units per year. Now the sector is cyclical and has been in the downturn for some time. So let's consider a moderate 5% growth for the next 10 years.

    By 2030, we are looking at 2-wheeler sales of 3 crore units. Even if one third of this is EV sales, that's 1 crore electric 2-wheelers per year.

    In the last 2 years, average electric 2-wheeler sales were 1.5 lakh units. From 1.5 lakh to 1 crore, that's a 66x opportunity in 2-wheeler EVs.

    This is an annual growth rate of 52% over next 10 years. It's an almost vertical growth opportunity.

As per Richa, this is like a gold rush. But like in any gold rush, the winners will just be a few.

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Moving on, India's wholesale inflation in April 2022 has surged to three decade high to reach 15.08%.

As per the data released by the Commerce Ministry, the wholesale prices rose 15.08% in April while the wholesale price index (WPI) stood at 14.55% in March.

High commodity prices amid supply-chain disruptions due to geopolitical crisis have pushed up the input costs for producers resulting in record inflation.

Fuel prices, a big component of the increase, were up 38.7% on the year versus 34.5% in March.

This is the 13th straight month that the country has witnessed double-digit inflation. Nearly all components of the WPI have contributed to this high inflation.

Data released earlier this month showed that India's retail inflation galloped to 7.79% in April, the fastest pace in eight years.

The high inflation print will put further pressure on the central bank to act on rates and further tighten monetary policy.

In a bid to tame inflation, the Reserve Bank of India (RBI) announced a surprise rate hike earlier this month.

In the next monetary policy due in June, it is expected to raise rates further and also revise its 5.7% inflation forecast.

Moving on to developments from the commodities space, the Central Government has announced some relaxation to its order dated 13 May on restricting wheat exports.

The Ministry of Commerce & Industry said that wherever wheat consignments have been handed over to Customs for examination and registered into their systems on or before 13 May, such consignments would be allowed for export.

Last week, India said it was suspending exports of wheat to manage its food security which is at risk.

The Centre has also allowed a wheat consignment headed for Egypt, which was already under loading at the Kandla port. This followed a request by the Egyptian government to permit the wheat cargo being loaded at the Kandla port.

The government has kept a window open for overseas sales should a foreign neighbouring government make a request.

We will keep you updated on the latest developments from this space. Stay tuned.

In the meantime, read our editorial on wheat stocks in India and whether this is the perfect time to invest in wheat stocks.

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


Sensex Zooms 1,000 Points; ONGC, Coal India & ITC Surge
01:30 pm

Sensex Zooms 1,000 Points; ONGC, Coal India & ITC Surge

Share markets in India have extended early gains and are presently trading on a strong note.

Benchmark indices firmed up in afternoon deals as global cues turned supportive. Asian markets are mostly up as hopes grew for an easing of China's unprecedented regulatory crackdown on its once-freewheeling tech sector.

Meanwhile, a soft dollar, and buying in index heavyweight stocks supported sentiment.

Reliance Industries, ICICI Bank, ITC and Infosys rose over 3%.

Currently, the BSE Sensex is trading up by 992 points, up 1.9%, at 53,900 levels.

Meanwhile, the NSE Nifty rose above the 16,000-mark and is presently trading up by 304 points.

Shares of Tata Steel, ITC and Maruti soared around 4% while Reliance and ICICI Bank added to the gains.

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Tech Mahindra and Sun Pharma, on the other hand, remain the only losers from Sensex.

Metal stocks are upbeat today with the Nifty Metal index gaining over 4% amid hopes of China demand revival and value buying.

Among individual stocks, Aurobindo Pharma share price fell in a strong market and neared its two-year low. In the past one week, the company received six observations from the United States Food and Drug Administration (USFDA) for its Unit VII.

Coming to developments from the IPO space, Life Insurance Corporation of India (LIC) shares made a tepid debut, listing at a discount to the IPO price.

LIC started trading at Rs 865 apiece, down 8.7% from its IPO price of Rs 949 on the BSE.

The muted listing for the state-owned life insurer was on the cards as its grey market premium (GMP) in the unlisted market vanished over the past couple of days.

The weak listing could also be due to the market conditions and relatively lower investor participation during the book building process.

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The highly anticipated and India's biggest initial public offering (IPO), which lasted from 4 May to 9 May, was subscribed 2.95 times.

In his latest video, India's #1 trader Vijay Bhambwani explains when the stock markets will bounce back.

Vijay answers this question with the help of three charts. Tune in to the below video to know more:

More details to follow in the upcoming commentary.


Sensex Zooms 600 Points as Metal Stocks Rally; LIC Lists at 9% Discount
10:30 am

Asian share markets rose in early trade today despite a lower finish on Wall Street. The Nikkei us up 0.3% while the Hang Seng surged 2.2%.

The Shanghai Composite, on the other hand, reversed losses and is up 0.3%.

In US stock markets, Wall Street indices ended another volatile session lower on Monday, extending the losing streak.

The Dow Jones ended flat while the tech-heavy Nasdaq Composite shed 1.2%.

Back home, Indian share markets are trading on a positive note.

Market participants are tracking shares of Bharti Airtel, IOC and PI Industries as these companies are slated to post their March quarter earnings today.

The BSE Sensex is trading up by 348 points. Meanwhile, the NSE Nifty is trading higher by 114 points.

Tata Steel and Reliance are among the top gainers today. Asian Paints, on the other hand, is among the top losers today.

The BSE Mid Cap index is up 0.4% while the BSE Small Cap is trading higher by 0.7%.

Sectoral indices are trading mixed with stocks in the metal sector and energy sector witnessing most of the buying.

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Realty and pharma stocks, on the other hand, are trading in red.

Shares of Reliance, KSB and Blue Star hit their 52-week highs today.

The rupee is trading at 77.73 against the US$.

Gold prices are trading up by 0.3% at Rs 50,386 per 10 grams.

Meanwhile, silver prices are trading up by 0.2% at Rs 61,062 per kg.

Crude oil prices are down today after the European Union's efforts to enact a ban on Russian oil imports, a move that would tighten global supply, ran into resistance from member country Hungary.

Speaking of stock markets, India's #1 trader Vijay Bhambwani explains when the stock markets will bounce back, in his latest video for Fast Profits Daily.

Vijay answers this question with the help of three charts. Tune in to the below video to know more:

In news from the insurance space, Life Insurance Corporation (LIC) listed on the exchanges at Rs 865 per share, which is a discount of 9% over issue price.

The muted listing for the state-owned life insurer was on the cards as its grey market premium (GMP) in the unlisted market vanished over the past couple of days.

The weak listing could also be due to the market conditions and relatively lower investor participation during the book building process.

LIC shares listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The highly anticipated and India's biggest initial public offering (IPO), which lasted from 4 May to 9 May, was subscribed 2.95 times.

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Through the IPO, the government sold a 3.5% stake.

With its listing today, LIC became the fifth-largest company in India valued over Rs 6 tn.

Since you're interested in IPOs, check out the current and upcoming IPOs on our website.

Speaking of the insurance sector, have a look at the chart below which shows the investment assets of non-life insurers and life insurers over the past 10 years:

Investment Assets of Non-Life Insurers 11x That of Life Insurers

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, the above chart is enough proof of how big an earning opportunity is the zero-cost float to the non-life insurers. Their investment assets under management is nearly 11 times that of life insurers.

In news from the apparel space, Raymond is among the top buzzing stocks today.

Apparel and garment company Raymond on Monday reported over four-fold jump in its consolidated net profit to Rs 2.6 bn for the fourth quarter ended in March 2022. This was helped by a buoyant demand and strong consumer sentiments during the period.

The company had posted a net profit of Rs 0.6 bn during the January-March quarter of the previous fiscal.

Its revenue from operations was up 43.4% to Rs 19.6 bn during the quarter under review as against Rs 13.7 bn in the corresponding period of the previous fiscal.

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Its total expenses came at Rs 17.9 bn, up 33.4% YoY.

This quarter also marked as Raymond's best as it reported highest-ever revenue and profitability.

In an exchange filing, the company said,

  • Having core brand strength and a wide distribution network across the country, Raymond capitalized on the buoyant demand and strong consumer sentiments during the last quarter of the financial year 2022.

    With work-life coming back to the physical mode coupled with strong wedding season, demand across our B2C businesses witnessed the growth impetus.

During the quarter, demand in international markets and robust momentum of export orders were maintained in garments and engineering businesses.

In a separate filing, the company informed that its board recommended the payment of a dividend of 30% on the equity share capital, which is Rs 3 per equity share.

Raymond share price is currently trading up by 3.5%.

To know more, check out Raymond's latest quarterly results.

Moving on to news from the commodities space, India's wheat stock in 2022-23 may fall to their lowest level since 2016-17, and second lowest in the past 13 years, with the government's own purchases of the cereal likely being the lowest in 15 years.

According to data released, the staple's offtake has risen 38% over the last two years.

Last week, India said it was suspending exports of wheat to manage its food security which is at risk.

The food ministry said it had enough stocks to smoothly run the public distribution system. However, lower output due to a prolonged heat spell in March and record exports have necessitated a calibration of quantities of the winter staple that will be supplied through food schemes.

The government has kept a window open for overseas sales should a foreign neighbouring government make a request.

We will keep you updated on the latest developments from this space. Stay tuned.

In the meantime, read our editorial on wheat stocks in India and whether this is the perfect time to invest in wheat stocks.

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


SGX Nifty Up 43 Points, How India's Export Ban Shook the Wheat Market, LIC Listing, and Top Buzzing Stocks Today
Pre-Open

On Monday, Indian share markets inched higher tracking Asian peers as they tried to hold onto small gains after weak data from China showed that lockdowns hit the world's second-largest economy.

Benchmark indices snapped a six-day fall and ended on a positive note after trading in a volatile session yesterday.

At the closing bell on Monday, the BSE Sensex jumped 180 points, ending 0.3% higher.

Meanwhile, the NSE Nifty added 60 points, ending at 15,842.

NTPC, SBI, and Bajaj Finance were among the top gainers.

Ultratech Cement, Asian Paints, and ITC were among the top losers.

The broader markets ended in the green as the BSE Mid Cap index climbed 1.5% while the BSE Small Cap index jumped 1.2%.

Among sectoral indices, buying was seen in the auto sector, realty sector, and power sector while stocks in the IT sector and FMCG sector witnessed selling.

At 7:50 AM today, the SGX Nifty was trading up by 43 points or 0.3% higher at 15,890 levels.

Indian share markets are headed for a positive opening today following the trend on SGX Nifty.

Speaking of stock markets, India's #1 trader Vijay Bhambwani, in his latest video for Fast Profits Daily spells out ways to predict the market's recovery.

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Wondering as to when the current phase of bearishness in the market will terminate? When will the markets bounce back?

Vijay answers all these questions and much more. Tune in to the below video to find out:

Top Buzzing Stocks Today

Tata Power share price will be among the top buzzing stocks today.

Tata Power's solar energy subsidiary, Tata Power Solar, has bagged a project worth Rs 17.3 bn from the state-owned NHPC.

The project will be built under the central public sector undertaking scheme of the Indian Renewable Energy Development Agency Limited.

Located in Rajasthan, the project is expected to be completed in eighteen months and will reduce around 0.64 m carbon emissions while producing approximately 750 m units yearly.

The project will be installed with Indian-made cells and modules. The company states that its pending order book now stands at Rs 135 bn.

GlaxoSmithKline Pharmaceuticals share price will also be in focus today.

The pharma giant on Monday reported a consolidated net profit of Rs 12.2 bn for the March 2022 quarter as compared to Rs 143.3 m posted for the corresponding period of the previous fiscal.

The company's consolidated revenue from operations was up 8.8% year-on-year and stood at Rs 8.1 bn for the quarter under review.

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For the financial year 2022, the company reported a net profit of Rs 16.9 bn against Rs 3.6 bn in the preceding year.

Subject to the approval of shareholders, the board has recommended a dividend of Rs 90 per equity share for the year ended March 2022. This is inclusive of a special dividend of Rs 60.

Market participants will also track shares of Bharti Airtel, Indian Oil Corporation, and Sapphire Foods India as these companies will announce their March quarter results later today.

Wheat prices hit record high following India's surprise export ban

The price of wheat jumped to US$ 453 per tonne as the European market opened on Monday after India decided to ban exports.

Wheat prices were already high in the wake of Russia's invasion of major wheat exporter Ukraine which was the world's sixth-largest exporter of wheat in 2021 with a 10% share of the global market.

Adding to the fuel, New Delhi banned wheat exports on Saturday, as a scorching heatwave curtailed output and domestic prices hit a record high.

India said the move was needed to protect the food security of its own 1.4 bn people in the face of lower production and sharply higher global prices.

On Sunday, commerce secretary BVR Subrahmanyam stated that some parts of India have seen prices of wheat and flour jump 20% to 40% in recent weeks.

This sharp rally has tempted farmers to sell their already low produce to traders instead of the government. This got the government worried about its buffer stock of almost 20 m tonnes which was depleted by the pandemic.

Export deals agreed before the directive issued on 13 May could still be honoured but future shipments needed government approval.

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The export ban has trapped some 1.8 m tonnes of grain at ports, leaving traders facing heavy losses from the prospect of selling onto a weaker domestic market.

The spike, exacerbated by fertiliser shortages and poor harvests, has fueled inflation globally and raised fears of famine and social unrest in poorer countries.

Adani group's open offer to buy 26% stake in Ambuja Cements and ACC Ltd

Day after billionaire Gautam Adani's conglomerate bought Switzerland-based Holcim AG's cement businesses in India, the Adani group on Monday made an open offer to buy a 26% stake each in its two listed firms from public shareholders.

The Adani group through its Mauritius-based subsidiary Endeavour Trade and Investment has made an open offer at Rs 385 per share for Ambuja Cements to acquire up to 516.3 m equity shares, aggregating to a total consideration of Rs 198.8 bn.

While for ACC, the offer stands at Rs 2,300 per share to acquire up to 48.9 m shares, aggregating to a total consideration of Rs 112.6 bn.

Note that this is the largest ever acquisition in India's infra and material space valued at US $10.5 bn.

The entire transaction is expected to close in the second half of 2022. It may increase Adani's stake by more than 80% in both companies.

Speaking of the Holcim-Adani buyout, we did an editorial recently explaining why it makes sense if Adani acquires Holcim's India stake.

You can read the same here: Why it Makes Sense for Adani to Buy Out Holcim's India Stake.

Paradeep Phosphates IPO

Paradeep Phosphates is the country's second-largest manufacturer of non-urea fertilizers and Di-Ammonium Phosphates in the private sector.

The offer will open for subscription today and the last day to subscribe to the public offer is 19 May.

The company aims to raise Rs 15 bn by a combination of fresh issue of equity shares aggregating up to Rs 10 bn and an offer for sale (OFS) of 118.5 m equity shares of Rs 10 each aggregating up to Rs 5 bn.

The price band for the offer has been fixed between Rs 39-42 per equity share having a face value of Rs 10 each. Investors can bid for a minimum lot size of 350 shares and in multiples thereof.

The net proceeds from the fresh issue will be utilized to part-finance the acquisition of the manufacturing facility in Goa, repayment/prepayment of part of its borrowings, and general corporate purposes.

Life Insurance Corporation of India (LIC) listing

As per market observers, LIC shares continued to trade at a discount of Rs 19 in the grey market yesterday. The grey market discount indicates that the stock may have a moderate to discounted listing.

The government sold over 221 m shares or 3.5% stake in the state-run insurer through the IPO at a price band of Rs 902-949 a share.

We will keep you updated on the latest developments from this space. Stay tuned.

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