Sensex Today Rallies 1,331 Points | Nifty Above 24,550 Mark | 5 Reasons Why Indian Share Market is Rising

Fri, 16 Aug Closing

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After opening the day on positive note, Indian share markets continued the momentum as the session progressed and ended on firm footing.

Equity benchmark indices, BSE Sensex and NSE Nifty50, ended the week's last trading session with gains of over 1 per cent each, led by buying across sectors.

At the closing bell, the BSE Sensex stood higher by 1,331 points (up 1.7%).

Meanwhile, the NSE Nifty closed higher by 396 points (up 1.6%).

Wipro, M&M and Tata Motors were among the top gainers today.

SBI Life Insurance and Dr Reddy's Lab on the other hand, were among the top losers today.

The GIFT Nifty was trading at 24,597 up by 430 points, at the time of writing.

For a comprehensive overview of key players in the financial sector, check out list of Fin Nifty Companies.

For impact of the Bank Nifty companies and comprehensive overview of the index, check out Equitymaster's Bank Nifty Companies list.

The BSE MidCap index ended 1.8% higher and BSE SmallCap index ended 1.7% higher.

All other Sectoral indices are trading on positive note with socks in realty sector, auto sector and IT sector witnessing most buying.

Shares of Trent, Info Edge and Colgate hit their respective 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

The rupee is trading at 83.95 against the US$.

Gold prices for the latest contract on MCX are trading 0.6% higher at Rs 70,587 per 10 grams.

Meanwhile, silver prices were trading 2.5% higher at Rs 82,082 per 1 kg.

Here are three reasons why Indian Markets are rising today

#1 Cooling US Inflation

U.S. consumer prices rose moderately, with the annual inflation rate slowing to below 3% for the first time since early 2021.

The CPI increased by 2.9% in the 12 months through July, down from 3.0% in June. This cooling inflation is positive for global equity markets, fueling expectations of imminent Fed rate cuts, which in turn boosts investor confidence and supports stock market gains worldwide.

#2 US Market Rally

Wall Street's main indices closed higher on Thursday, with the Nasdaq rising more than 2% after July US retail sales data signalled resilient consumer spending, easing fears of an imminent recession in the world's largest economy.

Retail sales increased 1.0% after a downwardly revised 0.2% drop in June, calming concerns of a sharp economic slowdown sparked by a recent rise in the unemployment rate.

#3 Decline in Dollar Index

The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined below the 103 level, currently at 102.97.

This weakening of the dollar is positive for Indian and Asian equity markets, as it makes emerging market assets more attractive to foreign investors.

#4 Robust Q1 Results

The just-concluded Q1 earning season was in line with street expectations with net income for Nifty growing by 5.2%. The positive surprises came from BPCL, COAL and ONGC. The Q1FY25 EBITDA of the Nifty-50 Index grew 3.2% versus our expectation of 0.6% growth.

#5 Buying in IT Stocks

Following a strong rally in U.S. stocks, Indian IT stocks also surged, with the Nifty IT Index rising 1.7%. Gains were led by Mphasis, LTTS, Wipro, and TCS, climbing up to 5%.Speaking of the stock market, taking some profits off the table to prepare for a market correction is never a bad idea.

Rather, at Equitymaster, we always recommend readers to ensure they have funds to buy more stocks when valuations correct.

That is precisely why Research Analyst, Tanushree Banerjee have been recommending Equitymaster subscribers to sell partial exposures in stocks that have met target prices.

Tune into below video for what should you not sell.

Why Aurobindo Pharma Share Price is Rising

In news from the pharma sector, Aurobindo Pharma shares slipped as much as 6.5% intraday on 16 August after the US Food and Drug Administration issued a warning letter to the drugmaker's unit-III of the formulations manufacturing facility of its arm Eugia Pharma Specialties.

Eugia Pharma is a wholly-owned subsidiary of Aurobindo Pharma.

Back in May, the unit based in Pashamylaram received an Official Action Indicated (OAI) status following observations from the US FDA.

The US drug regulator issues warning letters to companies to that fail to address concerns about their practices, which can include poor manufacturing standards, issues with product claims, or incorrect instructions for use, pointed out by the regulator as observations.

An OAI status indicates that the US FDA inspection identified significant compliance issues that demand regulatory or administrative action.

To calm investors' nerves, Aurobindo Pharma also stated in an exchange filing that this OAI status does not affect existing supplies to the US markets.

The management also stated that the remediation efforts for Eugia's Unit-II and Unit-III are progressing well.

The US market makes up 47% of Aurobindo Pharma's total sales.

For the June quarter, US sales reached US$ 426 m, slightly lower than the US$ 432 m reported in the March quarter.

Paras Defence Hits Upper Circuit

Moving on to news from the defence space, Paras Defence and Space Technologies Ltd's shares hit a 5% upper circuit at Rs 1,208.35 apiece after the company's associate company, Controp-Paras Technologies Pvt Ltd secured a Rs 3 billion order from Larsen and Toubro (L&T).

The Rs 3 bn order involves the manufacturing and supply of 244 units of the Sight - 25 HD Electro-Optics (EO) System. The Sight-25HD EO System is expected to enhance the capabilities of L&T's CIWS program, which is crucial for naval defence.

Additionally, the order includes charges for an extended warranty and an Integrated Logistics Support (ILS) package, all to be used in L&T's Close-In Weapon System (CIWS) program.

Paras Defence will fulfil the Indian Content (IC) requirements of the order through a separate contract to be issued by Controp-Paras Technologies. The order is expected to be executed within a time frame of 47 months.

Paras Defence is a private sector company focused on the design, development, manufacturing, and testing of a wide range of defence and space engineering products and solutions.

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

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