4 Factors Behind the Sensex Rally, HAL Adjourns Split Plan, and Buzzing Stocks Today

Wed, 22 Sep Pre-Open

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Indian share markets ended on a strong note yesterday.

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.

At the closing bell yesterday, 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.

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

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.

Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 46,334 per 10 grams at the time of closing stock market hours yesterday.

Here are 4 Factors which Pushed Indian Share Markets Higher

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 any shares in the past two days 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 on 21-22 September 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 today.

Sectoral performance: Huge gains were seen in the realty, IT, and metal sectors. The realty sector ended up by 3.5%, while the IT sector and metal sector ended 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...

Top Stocks in Focus Today

Among the buzzing stocks today will be SBI Cards.

Private equity firm Carlyle Group will nearly offload half of its stake in SBI Cards and Payment Services for as much as US$443 m.

CA Rover Holdings, a Carlyle entity, which as of June 2021 held a 6.5% stake in SBI Cards, will sell around 32 m shares through a block trade.

It will offer the shares at an indicative price band of Rs 1,021 to Rs 1,072.3 apiece.

This sale follows Carlyle selling a 5.1% stake in SBI Cards for Rs 48.1 bn in June, while in March, it offloaded a little more than 4% for about Rs 38 bn through block deals.

The stake sales followed SBI Cards' public listing in March last year. Carlyle divested a 10% stake in SBI Cards for around Rs 70 bn, marking the largest private equity exit through an initial share sale in India.

Note that last month, Carlyle undertook a block trade to sell its remaining stake in life insurer SBI Life Insurance for around US$289 m.

HCL Technologies share price will also be in focus today.

Shares of HCL Technologies hit a new high of Rs 1,315.10 on the BSE after the company announced a five-year digital transformation deal with US-based MKS Instruments.

It is a global provider of instruments, systems, subsystems and solutions for advanced manufacturing processes.

In a statement post market hours yesterday, the company said,

• HCL will drive digital and cloud-enabled transformation for MKS Instruments through AI/ML-led automation, enhanced user experience with end-to-end Infrastructure services, digital workplace services and IT transformation.

HCL's board is scheduled to meet next month on 14 October to consider financial results for the quarter and half year ending September 2021.

The board will also consider the payment of a third interim dividend for the financial year 2021-22.

The record date for determining the entitlement of the shareholders for the payment of aforesaid interim dividend is 23 October 2021.

HAL Board Defers Proposal of Stock Split

Hindustan Aeronautics (HAL) deferred the proposal of stock split in yesterday'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 on 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.

Cadila Healthcare Subsidiary Inks Deal to Sell Two Brands to Integrace

Cadila Healthcare share price fell in early trade yesterday after the company said it is going to sell its two brands.

Zydus Healthcare, a wholly owned subsidiary of Cadila Healthcare, entered into an agreement with Integrace, the purchaser, to sell two brands viz. Mifegest and Cytolog.

The transaction is expected to be completed within 30 days from the date of execution of agreement subject to customary approvals.

The purchaser is a part of the portfolio companies of private equity (PE) firm, True North.

Mifegest is an anti-progestational steroid class of drug used for medical termination of pregnancy while Cytolog tablet is a medicine used for medical abortion.

How this pans out 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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