Sensex Skyrockets 958 Points to End at New Peak; Banking & Realty Stocks Rally

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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 highs amid positive news on Evergrande crisis and Federal Reserve's tapering announcement.

At the closing bell, the BSE Sensex stood higher by 958 points (up 1.6%).

Meanwhile, the NSE Nifty closed higher by 276 points (up 1.6%).

Bajaj Finserv and Hindalco were among the top gainers today.

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

The SGX Nifty was trading at 17,834, up by 267 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.3% and 0.9%, respectively.

Sectoral indices ended on a positive note with stocks in the realty sector, banking sector and finance sector witnessing most of the buying interest.

FMCG stocks, on the other hand, witnessed selling pressure.

Shares of KEI Industries and Persistent Systems hit their respective 52-week highs today.

Asian stock markets ended on a positive note today.

The Hang Seng and the Shanghai Composite ended the day up by 1.2% and 0.4%, respectively.

US stock futures are trading on a firm note today with the Dow Futures trading up by 245 points.

The rupee is trading at 73.64 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.4% at Rs 46,468 per 10 grams.

Here are 4 Factors Why Indian Share Markets Rallied Today

Fed announcement: The biggest trigger for the Indian markets is considered to be the support from the US markets amid the Federal Reserve policy decision on Wednesday to keep interest rates steady.

The US Fed indicated that 'moderation in the pace of asset purchases may soon be warranted' and even then, markets the world over, including India, rejoiced.

It has not given any timeline for tapering but it can be expected to begin as soon as November this year and a rate hike in 2022 looks a clear possibility.

Government reforms & liquidity push: The continuous reforms being undertaken by the government is helping improve the outlook for sectors thus pushing markets higher.

The production linked incentive (PLI) schemes for the various sectors and the latest reforms for the telecom sectors are some such examples. Overall, this is coming at a time when people are losing interest in China. This is turning to be a very positive thing for Indian markets.

Also, strong interest from retail investors and foreign institutional investors (FIIs) is among other factors that are keeping the bull market intact.

Resolving crisis in China: Some positive news from struggling developer China Evergrande Group also boosted investor sentiment. One of the units of Evergrande said that it has 'resolved' a coupon payment on an onshore bond.

Concerns also eased after People's Bank of China injected US$17 bn into the banking system. This boosted the global sentiment, which rubbed off on Indian markets too.

Further, experts believe investors as India are seeing a silver lining amid the Chinese crisis. They believe the Chinese crackdown earlier and the Evergrande crisis now bode well for India, as it can facilitate capital flows.

Realty stocks rally: Meanwhile, the re-opening theme, economy revival, and declining covid cases are the domestic factors aiding benchmarks.

Realty, hospitality, and entertainment stocks have become the most beneficial sectors due to these multiple triggers. Of all the benefitted sectors, realty stocks are powering more strength to the Indian markets on the back of a strong outlook.

Moreover, the majority of the lenders coming out with home loan rate cuts as a festive offer, had not just only helped the banks and financials to pick up the business but it is also creating an opportunity for the realty sector.

In the last four sessions, the BSE Realty Index has gained around 20%, and has touched a new 52-week high to 4,045.7 levels surging for around 11% today. The surge in the index is mostly led by Godrej Properties up near 12% to hit a new record high on the BSE today.

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 the stock market, India's #1 trader, Vijay Bhambwani talks about how you can multiply your money in sugar stocks, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Mphasis Stock Hits New High as Street Cheers Blink Acquisition

In news from the IT sector, was among the top buzzing stocks today.

Mphasis share price surged over 4% and touched a 52-week high of Rs 3,392 today, a day after the company announced the acquisition of US-based Blink Interactive, Inc.

Mphasis Corporation, USA, a wholly-owned subsidiary of the company, has acquired Blink Interactive, Inc, a Washington Corporation, consequent to signing a definitive agreement regarding the acquisition.

The acquisition is expected to provide access marquee logos, strengthen experience business and is leadership and revenue growth accretive, the company said.

The company has acquired a 100% stake in Blink for a total consideration of up to US$94 m, including earnouts.

Founded in 2000, Blink has over two decades of expertise using their evidence-driven design SM process to define digital user experiences for clients.

Headquartered in Seattle, with over 130 employees, Blink has additional studios in Austin, Boston, San Diego, and San Francisco.

Mphasis share price ended the day up by 3% on the BSE.

Speaking of the stock markets, a right investing process can help you win in the long term. It might offer some unexpected and undesirable results in the short term but lets you fare well when you average the outcomes.

According to Richa Agarwal, Senior Research Analyst at Equitymaster, any investment process should not be judged based on individual outcomes. Instead, it should have stood the test of the time.

Her smallcap service Hidden Treasure has had its fair share of failures. But sticking to a disciplined process meant that Hidden Treasure's internal rate of return (IRR) increased to 24.38% since inception. This compares favourably to the IRRs of 9.6% for the Sensex, and 8.8% for the smallcap index in the same period (February 2008 - June 2020) as can be seen in the chart below.

The service's performance did suffer in the short term after the 2018 crash in smallcaps. However, the long term track record and the post Covid rebound underscores the strength of stock picking process.

If you are interested in becoming a Hidden Treasure subscriber, here's where you can sign up.

Moving on to news from the IPO Space...

Government Likely to Block Chinese Investment in LIC IPO

Indian government wants to block Chinese investors from buying shares in Life Insurance Corp (LIC) which is due to go public, underscoring tensions between the two nations.

State-owned LIC is considered a strategic asset, commanding more than 60% of India's life insurance market with assets of more than US$500 bn.

The government is planning to allow foreign investors in one of the biggest ever initial public offerings (IPOs) worth a potential US$12.2 bn, Chinese investors are likely to be kept out from this.

Political tensions between the countries rocketed last year after their soldiers clashed on the disputed Himalayan border and since then, India has sought to limit Chinese investment in sensitive companies and sectors, banned a raft of Chinese mobile apps and subjected imports of Chinese goods to extra scrutiny.

'With China after the border clashes, it cannot be business as usual. The trust deficit has significantly widened,' said one of the government officials, adding that Chinese investment in companies like LIC could pose risks.

Aiming to solve budget constraints, Prime Minister Narendra Modi's administration is hoping to raise Rs 900 bn through selling 5% to 10% of LIC this financial year which ends in March.

The government has yet to decide on whether it will sell one tranche of shares seeking to raise the full amount or choose to seek the funds in two tranches.

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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