4 Reasons Why Sensex Surged 514 Points Today

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

Benchmark indices stabilised in the afternoon session after trading on a turbulent note for the most of the session, marking a sharp comeback after two days of selling.

Improved optimism in European markets and strength in US equity futures boosted market confidence at home, as investors awaited the start of the US Federal Reserve policy meeting later today.

At the closing bell, the BSE Sensex stood higher by 514 points (up 0.9%).

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

JSW Steel and ONGC were among the top gainers today.

Maruti Suzuki and BPCL, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,562, up by 176 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.8% and 0.1%, respectively.

On the sectoral front, gains were largely seen in the realty sector, metal sector, and IT sector.

Shares of Pidilite Industries and ITC hit their respective 52-week highs today.

Asian stock markets ended on a mixed note today. The Hang Seng ended up by 0.5%.

Markets in China, South Korea and Taiwan were closed today for holiday.

US stock futures are trading on a strong note today with the Dow Futures trading up by 346 points.

The rupee is trading at 73.61 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.1% at Rs 46,334 per 10 grams.

Here are 4 Factors which Pushed Indian Share Markets Higher Today

FIIs on buying spree: Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 925.4 m, data available with NSE suggested.

The fact that FPIs did not sell yesterday is also very encouraging for Indian investors.

Advantage India: There is another view that apparently, Chinese crisis bode well for India, facilitating increasing capital flows to India.

Fed meet: The US Federal Reserve's FOMC will meet today and tomorrow to take decisions on its monetary policy.

There is a possibility that the US Fed may talk about the timeline for tapering, which could be as early as November, and that may lead to cautious moves in the equity markets globally.

Other than the US Fed, the Bank of Japan will also come out with its monetary policy on 22 September.

Sectoral performance: Huge gains were seen in the realty, IT, and metal sectors. The realty sector ended the day up by 3.5% today, while the IT sector and metal sector ended their day higher by 1.5% and 2.6%, 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 the top smallcap stocks to buy now.

The small cap index has been on a tear of late and the rally doesn't look like running out of steam anytime soon.

So, is there a way of zeroing in on small caps with limited downside but very good upside potential? How do we find such stocks?

Rahul answers these questions in the video below. Tune in to find out more...

Moving on to stock specific news, Adani Ports was among the top buzzing stocks today.

The competition commission of India (CCI) cleared the acquisition of 10.4% stake in Gangavaram Port by Adani Ports and Special Economic Zones (APSEZ).

APSEZ is buying the stake from the government of Andhra Pradesh. The deal is worth Rs 6.4 bn.

In a statement, the company said,

• The acquisition is in line with company's strategy of east coast to west coast parity and will provide an access to growth from new hinterland markets as it has coverage in resource rich and industrial belt in eastern, central and southern India.

Gangavaram Port own, develop and operate the deep-water port in Andhra Pradesh. This is based on a concession agreement on build-own-operate-transfer basis with the Andhra Pradesh government for a period of thirty years. The concession agreement can be extended by 20 years.

Adani Port is an integrated port infrastructure services provider present across 11 domestic ports in the states of Gujarat, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha.

Adani Ports share price ended the day up by 0.1% on the BSE.

Moving on to news from the defence sector...

HAL Board Defers Proposal of Stock Split

Hindustan Aeronautics (HAL) deferred the proposal of stock split in today's board meeting.

In a regulatory filing, the company said,

• This is to inform that the Board of Directors of the Company in its meeting held today, i.e., 21 September 2021, has deferred the proposal of sub-division of shares.

Shares of HAL traded 1.5% lower after the outcome of the board meeting at Rs 1,354.8 apiece on BSE.

On 3 September, HAL had informed the stock exchanges of a stock split decision would be considered on 21 September.

The stock had hit a 52-week high of Rs 1,456.2 on 30 August 2021. The stock hit a 52-week low of Rs 660 on 4 November 2020.

HAL is engaged in carrying out design, development, manufacture, repair and overhaul of aircraft, helicopter, engines and related systems like avionics, instruments and accessories primarily serving Indian defence programme.

As of 30 June 2021, the government of India held 75.15% stake in HAL.

Hindustan Aeronautics share price ended the day down by 1.2% on the BSE.

Speaking of the defence sector, have a look at the chart below which shows the top 5 military spending countries in the world as of 2019:

According to a SIPRI (Stockholm International Peace Research Institute) report, India was the third largest military spending country in the world in 2019.

Here's what we wrote about it in one of the editions of Profit Hunter:

• If you look at the chart closely, you will realise it is likely to remain among the top spenders in the coming years.
  
  It's because of the second largest spender shown in the chart, China.
  
  With rising tensions between the two countries, the incentive is strong for India to keep up with China.
  
  It all makes sense for the government to focus on this sector in a big way in the near future.
  
  The government's 'Atmanirbhar' push will get a massive boost through local defence manufacturing. This will create profitable opportunities in defence stocks for astute investors.

Co-head of Research at Equitymaster, Tanushree Banerjee keeps a close watch on stocks in the defence space. As per Tanushree, defence will be a big wealth-creating opportunity.

Back in June 2020, she recorded a video about India's best defence stocks.

You can watch the video here: The Upside in India's Best Bulletproof Defence Stocks.

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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