5 Reasons Why Sensex Rallied 1,041 Points Today

Mon, 30 May Closing

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Bulls marked a strong rally today as Indian share markets ended nearly 2% higher.

After opening the day higher, equity markets extended gains as the session progressed.

Benchmark indices ended on a strong note as investors cheered positive global cues and buying returned to index heavyweight stocks.

At the closing bell, the BSE Sensex rallied 1,041, ending 1.9% higher.

Meanwhile, the NSE Nifty zoomed 309 points, ending at 16,661.

M&M, Titan, and Infosys were among the top gainers today.

Kotak Mahindra Bank, Sun Pharma, and Dr Reddy's Lab were among the top losers today.

The broader markets ended on a strong note as the BSE Mid Cap index jumped 2.3% while the BSE Small Cap index increased 2.2%.

All sectoral indices ended in green with stocks in the IT sector, realty sector, and energy sector witnessing most of the buying.

Shares of Blue Dart Express and M&M India hit their 52-week high today.

Also check out stocks trading near their 52-week lows and what has caused them to fall. We wrote about why ICICI Securities share price is falling and why IT company Newgen Software is falling.

Outside the home ground, Asian share markets ended on a strong note tracking a strong close on US markets last week as investors shifted their focus to global economic indicators due this week.

At the close in Tokyo, the Nikkei 225 advanced 2.2%, while the Hang Seng jumped 2.1%. The shanghai composite added 0.6%.

Despite the sharp rally today, there is no denying that the growth prospects of the world's economy seem uncertain.

After more than two years of a devastating pandemic and the global economic shockwaves triggered by the Russia-Ukraine conflict, will India buck the coming global recession? Only time will tell it seems.

The SGX Nifty was trading 1.8% higher at the time of writing.

The rupee is trading at 77.52 against the US$.

Gold prices are currently trading up by 0.2% at Rs 51,011 per 10 grams while silver is trading flat at Rs 62,121 per kg.

Speaking of gold, have a look at the chart below to see how gold has inched up ever since the Russia invaded Ukraine.

Gold Prices Inching up since Russia Invaded Ukraine

Watch this video to know whether gold really makes your portfolio crash-proof: Does Gold Make Your Portfolio Crash-Proof?

Here are five factors behind today's stock market rally:

India's GDP data: Investors are awaiting GDP data for the March quarter which is due for release tomorrow.

Early monsoon: According to the India Meteorological Department (IMD), southwest monsoon has set in over Kerala on Sunday, three days ahead of its normal onset date of 1 June.

Investors cheered on the news as the country is battling soaring inflation. Timely and normal rains can boost production for monsoon-sown crops such as rice, soya beans, pulses etc., and thus provide a boost for agri-based companies.

China relaxes Covid curbs: China eased Covid restrictions in Shanghai and Bejing and offered a slew of economic support measures.

Shanghai loosened Covid test requirements for people who enter public places and Beijing released mobility curbs in several districts on Sunday after authorities said its outbreak is under control.

Positive global cues: US stocks enjoyed a broad-based rally on Friday, while the yield on benchmark US Treasuries fell.

Data showed that US consumer spending rose in April and the uptick in inflation slowed, two signs the world's largest economy could be on track to grow this quarter.

Also, according to the data presented by the commerce ministry, The US has surpassed China to become India's top trading partner in 2022 fiscal, reflecting strengthening economic ties between the two countries.

Bargain Hunting in heavyweights: The trading session witnessed solid bargain hunting in bluechip stock. Stocks like the HDFC duo, IT majors Infosys and TCS, and Reliance Industries alone contributed over 50% to the rally in the benchmark indices.

Bargain hunting coupled with a recent fall in the rupee boosted IT shares that generate a major chunk of their revenues from exports.

In this volatile market, a few penny stocks are continuously hitting their 52-week highs. Several Indian stocks have delivered multibagger returns in a span of one month. But not all are worthy.

If you're new and on the lookout for fundamentally strong penny stocks, check out the list of penny stocks to buy for long term.

These penny stocks are the ones to buy today and stand a chance to survive a market crash compared to their peers.

Speaking of stock markets, in her latest video, lead smallcap analyst at Equitymaster Richa Agarwal talks about a corporate event where promoters' actions could offer some clue about the value of the stock.

Richa shares a technique that could help you with a great starting point to keep stocks in your watchlist as markets turn volatile.

Tune in to the below video to find out more:

In news from the telecom sector, Vodafone Idea witnessed a sharp rally on the back of reports that Amazon may be interested in investing Rs 200 bn in the company.

Following the help from the government, Vodafone Idea has been in the search for investors to raise fresh capital to pay down its debt and invest in its network after returning from the brink of bankruptcy.

While reporting the Q4 results, the company showed signs of revival as it added more than 1 m new 4G subscribers while its consolidated operating profits grew 22% aided by recent tariff hikes.

As per a report, Amazon may be interested in investing in Vodafone Idea as it remains the only major cloud services giant without a telecom partner while Vodafone Idea is the only telecom operator without investment from a major US tech company.

Over the past two and a half years, US tech giants Facebook, Google, and Microsoft have invested in the top two telecom operators in the country - Reliance Jio and Bharti Airtel to strengthen their cloud offerings in India.

Vodafone Idea share price ended 4.1% higher on the BSE today.

Moving on to stock specific news, Nykaa is set to continue expanding its physical presence, founder Falguni Nayar said.

Though Nykaa's earnings were not as expected, Nayar remained upbeat about the growth of consumer demand in India.

Presenting her views on the financial performance of the parent company of Nykaa, Falguni said:

• Despite two bouts of COVID, the demand growth wasn't affected a lot. And if we look at the year until March, despite Omicron as well, Nykaa has shown 71% GMV growth and 55% revenue growth.

The company is looking to expand more into physical stores and into new businesses, thus raising questions about the sustainability of its EBITDA.

To this, the founder said that at the underline level, their EBITDA margin is strong; it has come out at a similar level as last year. It is 8% plus for the beauty business and that can improve slightly going forward.

Nykaa share price ended 3.7% higher on the BSE today.

To know more about the company, check out Nykaa's financial factsheet and its latest quarterly results.

And 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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