4 Reasons Why Sensex Surged 1,277 Points Today

Tue, 4 Oct Closing

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After opening the day on a strong note, Indian share markets extended gains as the session progressed and registered healthy gains.

The rally was led by an appreciating rupee and upbeat quarterly update from the companies, which lifted sentiment.

Also, gains across the sectors further fueled the rally.

At the closing bell, the BSE Sensex stood higher by 1,277 points (up 2.3%).

Meanwhile, the NSE Nifty closed higher by 387 points (up 2.3%).

IndusInd Bank, Adani Ports, and Bajaj Finance were among the top gainers today.

Power Grid Corporation, and Dr Reddy's Laboratories, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17,279 up by 411 points, at the time of writing.

Broader markets ended on a positive note. The BSE Midcap climbed 2.4% and the BSE SmallCap index ended higher by 1.5%.

All sectoral indices ended on a firm note today with stocks in the metal sector, finance sector, and banking sector witnessing most of the buying.

Among the best bank stocks in India, HDFC Bank and Kotak Bank rose up to 3%.

Shares of Page Industries, Cipla, and Bharti Airtel hit their 52-week highs today.

Adani Enterprises, Reliance, and Infosys were amongst the most active shares on the BSE today.

If you're interested in knowing which shares to trade, read our guide on the best intraday stocks for today.

Asian stock markets ended on a mixed note. The Nikkei ended the day higher by 2.9%, while the Hang Seng inched lower by 0.8%. The Shanghai Composite ended 0.5% lower.

The rupee is trading at 81.5 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.6% at Rs 51,160 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading higher by 0.8% at Rs 60,911 per 1 kg.

Here are four reasons why Indian share markets rallied today.

#1 FII Inflows

A strong FII buying is seen since the beginning of October 2022. FIIs bought Rs 5.9 bn worth of Indian equities on Monday, 3 October 2022, as against outflows of Rs 4.2 bn worth of equities by domestic institutional investors.

#2 Firm Global Cues

After the sharp decline last week, all three major indexes in the US - Dow Jones, Nasdaq Composite, and the S&P 500, closed over 2% higher. Also, Asian peer Nikkei traded higher by 2.9%.

#3 Rupee Factor

The rupee has been falling for quite some time now. But today, it appreciated. The rupee appreciated by 39 paise to 81.4 against the dollar, tracking the positive trend in equity markets.

Rupee's appreciation often attracts FIIs as it adds to the return for foreign investors.

#4 Gains Across Heavyweights and Sectors

The share price of index heavyweights such as Bajaj Twins, HDFC Bank, TCS, and ITC surged 1-2% today.

All sectoral indices too ended on a positive note.

Speaking of stock markets, Rahul Goel talks to Devina Mehra about the importance of first principles and turning down Ratan Tata's suggestion, in the latest episode of Investor Hour Podcast.

In news from the banking sector, HDFC Bank share price was among the top buzzing stocks today.

The share price of HDFC Bank jumped 3% after the bank's advances jumped 24% YoY in Q2.

HDFC Bank's loans and advances saw a growth of 23.5% YoY to Rs 14.8 tn as of 30 September 2022, from Rs 11.9 tn as of 30 September 2022.

The bank's Current Account Saving Account (CASA) deposits aggregated to Rs 7.5 tn on 30 September 2022, with a 15% YoY growth from Rs 6.5 tn in the same quarter last year.

The gross of transfers through inter-bank participation certificates and bills rediscounted the bank's advances grew by around 25.8% YoY.

Apart from this, its domestic retail loans grew by around 21.5% YoY, while commercial & rural banking loans grew by around 31.5% YoY.

The bank's deposits aggregated to approximately Rs 16.7 tn up 19% YoY from Rs 14.1 tn a year ago.

During the quarter ended 30 September 2022, the bank purchased loans aggregating Rs 91.4 bn through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation (HDFC).

HDFC Bank is India's largest private sector banks. It offers a diverse range of financial products and banking services to customers.

Note that, HDFC Bank is one that has always adapted to changing times. The bank wanted to transform itself from a leader in physical banking to a leader in online banking. Since then, HDFC Bank has constantly focused on going digital.

If you had invested Rs 10,000 in HDFC bank's IPO in 1995, today the value of that investment would have grown by more than Rs 152 m.

If HDFC Bank is able to seize the huge opportunity that lies before it, a US$1 trillion Indian company in the next decade might not just be a pipe dream.

Moving on to news from the engineering sector, L&T share price was in focus today.

The share price of L&T gained 3% today after the company's arm bagged significant orders.

The power transmission and distribution business of L&T Construction today bagged a significant order in India and abroad.

The value of this significant project is Rs 10 bn to Rs 25 bn.

It has secured an order to an order to establish a 765kV transmission line in Gujarat. It will increase the power transfer capacity of the company.

Commenting on it, L&T in the filing said,

• An order has been received to upgrade the distribution system in a state in North-East India. The scope of this project includes the strengthening of medium and low voltage distribution networks.
  
  Further, an order has been secured to establish a 380kV overhead line in Saudi Arabia that will help strengthen the evacuation infrastructure and improve the reliability of the grid in the Western region of the Kingdom.

The business has also won repeat orders to build new 132kV substations in the United Arab Emirates.

Larsen & Toubro is an Indian multinational engaged in EPC projects, hi-tech manufacturing and services. It operates in over 50 countries worldwide.

For more details, check out L&T news and analysis.

And 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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