5 Reasons Why Sensex Surged 593 Points Today

Fri, 13 Aug Closing

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Indian share markets witnessed positive trading activity throughout the day today and ended on a strong note.

Benchmark indices hit fresh record high today, riding on some positive domestic and global cues as investors remain optimistic about the present growth momentum.

At the closing bell, the BSE Sensex stood higher by 593 points (up 1.1%).

Meanwhile, the NSE Nifty closed higher by 165 points (up 1%).

Tata Consumer Products and TCS were among the top gainers today.

Eicher Motors and Dr Reddy's Laboratories, on the other hand, were among the top losers today.

The SGX Nifty was trading at 16,522, up by 142 points, at the time of writing.

Both, the BSE Mid Cap index and the BSE Small Cap index ended the day on a flat note.

On the sectoral front, gains were largely seen in the telecom sector, IT sector, and engineering sector.

Healthcare and realty stocks, on the other hand, witnessed selling pressure.

Shares of Siemens and Cummins India hit their respective 52-week highs today.

Asian stock markets ended on a negative note today.

The Hang Seng and the Shanghai Composite ended the day down by 0.5% and 0.2%, respectively.

The Nikkei ended down by 0.1% in today's session.

US stock futures are trading on a positive note today with the Dow Futures trading up by 55 points.

The rupee is trading at 74.25 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.4% at Rs 46,527 per 10 grams.

Here are Top 5 Factors Why Indian Share Markets Rallied Today

Strong Corporate Results in June Quarter: One of the biggest factors driving the stock market is a strong performance by Indian corporates across sectors in the first quarter of the fiscal 2022.

Many companies, especially IT and steel firms, have performed better than expectations in the first quarter of the financial year, providing a big boost to bullish market sentiments.

Inflation Cools Off: The decline in consumer price index (CPI) inflation to 5.59% in July from 6.3% in June will give comfort to the Reserve Bank of India (RBI) to continue with its loose monetary policy and accommodative monetary stance.

Jobless Claims Fall: Americans filing claims for unemployment benefits fell again last week as the economic recovery continued to be bumpy, a separate Labor Department report showed on Thursday.

IPO Rush: The rush in initial public offerings (IPO) has also kept market sentiments high in 2021 as it has led to more investors entering the stock market.

As more companies go public, many people are investing in them in order to gain from the current momentum in the stock market.

The IPO rush is likely to add more investors in stock markets this year and ultimately lead to higher optimism.

Sectoral Performance: Gains were also seen as telecom, engineering, and IT sectors witnessed huge buying interest today. The telecom sector ended the day up by 1.8% today, while the engineering sector and IT sector ended their day higher by 1.6% and 1.5%, 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 stock markets, in his latest video, Co-head of Research at Equitymaster Rahul Shah discusses how you can find multibagger stocks by taking minimum risk.

Tune in to the video below to find out more:

In news from the power sector, Tata Power was among the top buzzing stocks today.

Tata Power Solar Systems has been awarded a project to build a solar photovoltaic (PV) plant with 50 megawatt hour (MWh) battery energy storage system (BESS) in Leh, Ladakh.

The 50MW solar PV plant will be built on EPC (engineering, procurement and construction) mode.

According to a statement by Tata Power, the order value of the project is Rs 3.9 bn. The commercial operation is expected to start from March 2023.

This will be India's first co-located large scale BESS solution as well as first large-scale solar PV project in the Union Territory of Ladakh to be set up at a high altitude of 3,600 meters above sea level, it stated.

With the addition of this project, the order pipeline of Tata Power Solar now stands at 4 gigawatts (GW) with order value of Rs 124.1 bn.

The scope of work includes design, engineering, supply & procurement, construction of solar photovoltaic grid connected power plant project and BESS on a turnkey basis along with ten years of operations and maintenance services.

Praveer Sinha, CEO & MD of Tata Power, said,

• This project is a testament of contribution towards developing an advanced ecosystem for faster adoption of clean energy across the nation.

Tata Power Solar is a wholly-owned subsidiary of Tata Power.

Tata Power share price ended the day down by 0.8% on the BSE.

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

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, India's power sector is currently in transition. It's 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.

In August 2020, Tanushree recommended a high-quality stock from this space. Subscribers can read the report here (requires subscription).

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

Moving on to news from the IPO space...

Ixigo IPO: Travel Aggregator Files for Rs 16 bn Public Issue

AI-based travel app ixigo, which is backed by the likes of Sequoia Capital, Elevation Capital (formerly Saif Partners), GIC and Micromax, has filed its papers with market regulator to raise Rs 16 bn via an IPO.

According to the draft red herring prospectus (DRHP), the IPO will have a primary component of Rs 7.5 bn and an offer for sale (OFS) component of Rs 8.5 bn.

The issue will facilitate a partial exit for investors Elevation Capital and Micromax, and the proceeds will also be used for organic and inorganic growth initiatives and general corporate purposes.

ICICI Securities, Axis Capital, Kotak Mahindra Capital and Nomura are the investment bankers working on the IPO.

Law firms Shardul Amarchand Mangaldas and Khaitan & Co are the legal advisors.

Ixigo was launched in 2007 by Aloke Bajpai and Rajnish Kumar and competes with the likes of listed peers Easemytrip, Yatra and Booking.com.

It helps customers to organise, book and track trips and provides real-time prices and availability for flights, trains, buses, cabs, hotels and destinations.

How the IPO sails through remains to be seen. Meanwhile, stay tuned for more updates from this space.

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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