5 Reasons Behind the Sensex Rally, Tata Motors January Sales, and Buzzing Stocks Today

Wed, 3 Feb Pre-Open

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Indian share markets extended their historic Budget-day rally and ended 2.5% higher yesterday with automobile and financial stocks leading the gains.

At the closing bell yesterday, the BSE Sensex stood higher by 1,197 points (up 2.5%).

The NSE Nifty closed higher by 367 points (up 2.6%).

SBI and UltraTech Cement were among the top gainers.

The BSE Mid Cap index ended up by 2.3%, and the BSE Small Cap index ended higher by 1.6%.

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

Gold prices for the latest contract on MCX were trading down by 0.6% at Rs 48,130 per 10 grams at the time of closing stock market hours yesterday.

Note that in the Union Budget 2021, the Indian government has slashed import duties on gold and silver. The government cut import duties on gold and silver to 7.5% from 12.5%, but imposed a 2.5% cess on the imports. After the changes, gold imports would effectively attract 10.75% tax against 12.5% earlier. The government also reduced import duty on gold dore and silver dore, non-refined mined gold or silver.

To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold?

Speaking of the stock markets and Union Budget 2021, which stocks and commodities should you trade after the Budget?

India's #1 trader, Vijay Bhambwani answers this question in his recent video for Fast Profits Daily.

Tune in here to find out more:

Top 5 Factors Why Indian Share Markets Rallied Yesterday

Progress in US Stimulus: Top Democrats in the US Senate and House of Representatives filed a joint US$ 1.9-trillion Budget measure on Monday, in a step toward bypassing Republicans on Covid-19 relief before President Joe Biden met with Republican senators.

Union Budget 2021: Proposals of the Union Budget were the biggest factors moving stock markets. Global rating agency Standard and Poor's (S&P) said that India's Budget represents a comprehensive effort by the central government to shore up the country's economic recovery.

Banking Stocks Rally: The Nifty Bank index rallied as much as 8% post Budget and majority of gains were led by ICICI Bank, HDFC Bank, Kotak Mahindra Bank, SBI, and IndusInd Bank. The index continued its upward journey yesterday as well when it rose 3.6%.

In our new video series called Momentum Moves, Brijesh Bhatia spoke about why the Bank Nifty ratio chart is indicating that the next leg may be led by banking stocks.

You can watch the video here: The Bulls Have to Fight Hard Going into the Budget

Firm Global Cues: Positive cues in Asian share markets yesterday also improved sentiment. Asian shares rose higher on optimism about economic stimulus and global recovery as the Covid-led worries eased.

FII Inflows: In the run-up to the Budget, Indian share market witnessed selling by foreign portfolio investors (FPIs) for five consecutive sessions. However, FIIs seem to be back as NSE data shows they net bought worth Rs 14.94 billion on February 1.

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!

Top Stocks in Focus Today

Tata Motors will be among the top buzzing stocks today.

Tata Motors has recorded 94% growth in the domestic passenger vehicle segment in January. Compared to just 13,894 units in January 2020, Tata Motors sold 26,978 units of passenger cars last month.

The company also clocked a 15% rise in sales compared to December 2020. The Tata group company had sold 23,545 units of passenger cars in the last month of the previous year.

Tata Motors had reported 84% increase in sales in December 2020 as well with 23,545 units sold compared to 12,785 units in the year-ago period.

The massive growth numbers in the passenger vehicle segment has helped the company clock an impressive overall growth in January this year. The carmaker said it registered an overall growth of 28% across segments, including exports, in January.

Indigo Paints share price will be in focus today as the company listed on bourses yesterday with a stellar premium of 75%.

Further, the stock rallied as much as 110% to hit an intraday high of Rs 3,129 on the BSE, which was also a 20% upper circuit over opening price.

Market participants will also track shares of capital goods companies as the S&P BSE Capital Goods index surged 4% to hit an all-time high yesterday after the government's strong capital expenditure push in the Budget 2021.

Shares of Larsen & Toubro (L&T), Havells India, BHEL, Kalpataru Power Transmission, Thermax, Finolex Cables, ABB and Siemens from the capital goods index were up in the range of 5-7% yesterday.

L&T share price hit a fresh 52-week high of Rs 1,593, up 8%, rallying as much as 15% in the past two trading days.

ICICI Bank Q3FY21 Results: 19% YoY Growth in Net Profits

Private lender ICICI Bank reported a 19% year-on-year (YoY) growth in its net profit to Rs 49.4 billion for the quarter ended December (Q3FY21) against a profit of Rs 41.4 billion in the same period a year ago.

The bank's net interest income (NII) increased by 16% YoY to Rs 99.1 billion in the quarter under review from Rs 85.5 billion in Q3FY20. The net interest margin was at 3.7% in Q3FY21 compared to 3.6% in the quarter ended September 30, Q2FY21 and 3.7% in Q3FY20.

Provisions (excluding provision for tax) were Rs 27.4 billion in Q3FY21 compared to Rs 20.8 billion in Q3FY20. During Q3FY21, the bank made contingency provisions amounting to Rs 30 billion for borrower accounts not classified as non-performing assets (NPAs) according to the interim order of the Supreme Court. The bank utilised Rs 18 billion of Covid-19 related provisions made in the earlier periods.

As of December 31, 2020, the bank held aggregate Covid-19 related provision of Rs 99.8 billion, including contingency provision for pro-forma NPAs amounting to Rs 35.1 billion for loans not classified as NPAs.

During the quarter, the gross additions to NPAs were Rs 4.7 billion. Recoveries and upgrades, excluding write-offs, from nonperforming loans were Rs 17.7 billion (US$ 243 million) in Q3FY21. The net NPA ratio was 0.6% on December 31, 2020.

The retail loan portfolio grew by 15% YoY and 7% sequentially. Retail loans comprised 65.6% of the total loan portfolio. Including non-fund outstanding, retail was 54.1% of the total portfolio. Growth in the performing domestic corporate portfolio was about 10% YoY driven by disbursements to higher-rated corporates to meet their working capital and capital expenditure requirements.

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

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