5 Reasons Why Sensex Surged 609 Points Today

Mon, 15 Feb Closing

   Pre-Open   

   Momentum Moves   

   SGX Nifty   

   09:30 am   

   12:30 pm   

After staging a gap-up opening, Indian share markets witnessed positive trading activity throughout the day today and ended on a strong note.

Benchmark indices extended their winning streak into third straight session with both Sensex and Nifty hitting their fresh record high levels.

At the closing bell, the BSE Sensex stood higher by 609 points (up 1.2%).

The NSE Nifty closed higher by 151 points (up 1%).

Axis Bank and ICICI Bank were among the top gainers today.

The SGX Nifty was trading at 15,332, up by 174 points, at the time of writing.

Both, the BSE Mid Cap index and the BSE Small Cap index ended higher by 1.4% and 0.4%, respectively.

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

Asian stock markets ended higher today. As of the most recent closing prices, the Hang Seng ended up by 0.45% and the Shanghai Composite ended up 1.43%. The Nikkei ended higher by 1.91%.

US stock futures are trading higher today indicating a positive opening for Wall Street indices, with Dow Futures trading up by 162 points (up 0.5%).

The rupee is trading at 72.65 against the US$.

Gold prices for the latest contract on MCX are trading flat at Rs 47,318 per 10 grams.

Here are Top 5 Factors Why Indian Share Markets Rallied Today

Firm Global Cues: Asian share markets traded on a form note today with as the global rollout of the COVID-19 vaccine raised hopes of a faster economic recovery. Apart from this, reports of fresh US stimulus also boosted sentiment.

Recovering Economy: Index of Industrial Production (IIP) for the month of December turned positive again and showed an expansion of 1%, primarily led by basic metals, pharmaceutical and petrochemical products, and overall positive growth in the manufacturing sector.

This comes after IIP had contracted by 1.9% in November. It had expanded in October and September after six straight months of contraction due to COVID-19.

Besides, the consumer price index (CPI)-based inflation, the key price indicator used by the monetary policy committee (MPC) for policy formulation, fell to a lower-than-expected 4.06% in January compared with 4.59% in December.

FII Inflows: Firm capital inflows from the FPIs is also boosting market sentiments.

Foreign portfolio investors (FPIs) have pumped in Rs 219 billion in the Indian financial markets in February so far.

Upbeat Q3FY21 Earnings: So far, India Inc's earnings reports have beaten analysts' expectations, improving investor sentiments. The market is also bullish on the prospects of earnings upgrades.

Sectoral Indices End in Green: Most sectoral indices witnessed huge buying interest today. The BSE banking index and the BSE finance index surged 3.3% and 2.7%, 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!

Speaking of the current stock market scenario, note that we've seen a stellar rally post budget and then a rangebound week with a slight bullish bias.

Nifty firmly held 15,000 but the bulls seem to be tiring now. The breadth of large-cap stocks is not convincing enough to hold market at higher levels.

In the latest Momentum Moves video, Brijesh Bhatia elaborates on these points and what you should expect this week.

As per Brijesh, the Nifty might reverse if the Nasdaq 100 reverses from the reversal level of the harmonic pattern which is placed at 13,750-13,967.

Nasdaq and Nifty reversing will be double whammy for the IT index which has formed a bearish candlestick pattern.

Tune in to the video below to find out more:

In news from the mutual funds space...

Mutual funds went shopping in the primary market in January 2021 and spent Rs 12 billion in the various initial public offerings during the month.

Of the Rs 12 billion, IRFC cornered the biggest chunk of Rs 9.2 billion, Indigo Paints garnered Rs 1.4 billion and Home First received Rs 1.2 billion.

Among the stocks that witnessed buying interest from mutual funds were IRFC, HCL Technologies, Axis Bank, Asian Paints, Larsen & Toubro and HDFC.

On the flip side, Reliance Industries, Infosys, Bharti Airtel, Power Grid Corporation and TCS witnessed selling from mutual funds in the month of January.

How this trend pans out in the coming months remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Moving on to stock specific news...

Power Grid Corporation of India was among the top buzzing stocks today.

Power Grid Corporation of India has intimated that it has acquired 74% shareholding of the joint venture (JV) partner i.e. Jaiprakash Power Ventures in Jaypee PowerGrid.

The board of Power Grid Corporation of India, on 11 February 2021, approved the acquisition of 74% shareholding of the JV partner i.e. Jaiprakash Power Ventures in Jaypee PowerGrid (JPL) (a joint venture company of Power Grid Corporation of India and Jaiprakash Power Ventures).

JPL was incorporated to implement a specific transmission line associated with Karcham-Wangtoo HEP (1,000 MW).

The deal would be executed for a cash consideration whose amount will be specified on the execution of share purchase agreement.

The transaction is expected to be completed within FY21.

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

Speaking of the power sector, it is interesting to note that the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below:

This is abysmally low by global standards. This shows that there is big upside in the market share of power exchanges in India.

As per Tanushree Banerjee, co-head of Research at Equitymaster, India's power sector is currently in transition. It is driven by increasing reliance on short-term contracts and electricity spot markets. This transition to the short-term market is happening due to quickly evolving industry dynamics.

Tanushree believes the Indian power sector will see a surge in spot power volumes due to certain factors.

Tanushree has recommended a high-quality stock from this space in one of her recent StockSelect reports. Subscribers can read the report here (requires subscription).

And if you are not a StockSelect subscriber, here's where you can sign up.

In other news, Indian Railway Finance Corporation (IRFC) share price was also in focus today.

IRFC has reported a growth of 15.4% at Rs 10.5 billion for the quarter ended December 2020. During the same period of the last fiscal, the company had reported a net profit of Rs 9.1 billion.

Its total revenue from operations rose 8% to Rs 39.3 billion during the quarter under review.

The total revenue from operations from the first nine months of the current fiscal grew by 10.8% on a year-on-year (YoY) basis at Rs 113.2 billion.

The board of directors of the company also declared an interim dividend of Rs 13.8 billion translating to Rs 1.05 per share for the financial year 2020-21.

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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