Sensex Today Zooms 550 Points Aided by Banking Stocks | Reasons Behind the Sensex Rally | Nestle to Announce Dividend

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Indian share markets ended on a strong note, as softening crude prices helped ease inflation worries, while strong global cues added to sentiment.

Benchmark indices ended on a positive note for the third straight session led by banking stocks.

At the closing bell, the BSE Sensex stood higher by 550 points (up 0.9%).

Meanwhile, the NSE Nifty closed higher by 175 points (up 1%).

SBI, Nestle, and ITC were among the top gainers today.

HDFC, NTPC, and Tech Mahindra, on the other hand, were among the top losers today.

Nestle share price was widely tracked today as its board is set to meet tomorrow for approving Q2 results as well as interim dividend.

The SGX Nifty was trading at 17,500, up by 184 points, at the time of writing.

The BSE MidCap index ended higher by 1.1% while the BSE SmallCap index ended higher by 0.7%.

All sectoral indices ended in the green with stocks in the banking sector, capital goods sector, and FMCG sector witnessing most of the buying.

Among the best banking stocks, ICICI Bank and Axis Bank inched 1% higher.

Shares of TVS Motor and Deepak Fertilizers hit their 52-week highs today.

The rupee is trading at 82.33 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.6% at Rs 50,553 per 10 grams.

4 Reasons Why Sensex Rallied Today

#1 Falling crude prices: Crude oil prices continued to fall with the price of Brent crude at US$91.98 per barrel.

#2 UK makes U-turn: British Finance Minister Jeremy Hunt reversed Prime Minister Liz Truss's economic plan announced three weeks ago that slammed the UK markets and dented investor sentiment.

Under the new policy, most of Truss's £45 bn of unfunded tax cuts will go and a two-year energy support scheme for households and businesses will now be curtailed in April.

#3 Upbeat global cues: US indices kicked off the trading week yesterday with a rally after Britain reversed course on an economic plan, while Bank of America was the latest financial company to post solid quarterly results, which lifted optimism.

Asian stock markets followed suit.

#4: Dollar takes a breather: The greenback was at its lowest levels in more than a week as a revival in risk-taking lowered dollar's appeal.

The rupee today appreciated 22 paise to 82.08 against the US dollar in early trade, tracking an overnight fall in the dollar index.

Speaking of stock markets, the semiconductor industry has taken off with a bang lately.

Semiconductors are tiny circuits, known as chips, that power all our electronic devices and tech enabled instruments. They are components needed for manufacturing cars, televisions, refrigerators, washing machines, personal computers, laptops, mobiles, etc.

No wonder semiconductors play an important role in a variety of fields.

In her latest video, Tanushree Banerjee, Co-head of research at Equitymaster, talks about how semiconductors can help find the next Infosys-like multibagger stock.

Fund Infusion in General Insurance Companies

In news from the insurance sector, the government may infuse about Rs 50 bn equity into state-run general insurers to help them achieve solvency requirements as they meet an inflated wage bill.

The employee wage revision approved earlier this month, along with five-year arrears payments, are expected to cost the four general insurers an additional Rs 80 bn.

This planned equity support is over and above the Rs 50 bn already infused this year in National Insurance, Oriental Insurance and United India Insurance.

Out of the four state-run general insurers, only the listed one New India Assurance is profitable.

Reports for fund infusion come at a time when the government is moving ahead with its plans to privatise a general insurer.

The government is yet to decide on the general insurer that will be divested.

Speaking of the insurance sector, have a look at the chart below which shows the investment assets of non-life insurers and life insurers over the past 10 years:

Investment Assets of Non-Life Insurers 11x That of Life Insurers

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, the above chart is enough proof of how big an earning opportunity is the zero-cost float to the non-life insurers. Their investment assets under management is nearly 11 times that of life insurers.

Hiring 1 Lakh Freshers Despite Headwinds

Moving on to news from the IT sector, India's top four IT companies have onboarded over 105,000 freshers during the first half of the fiscal year.

This is higher than the 97,000 freshers onboarded during the same period last year.

Barring Tata Consultancy Services (TCS), the rest of the IT service providers have reported stable or lower attrition numbers compared to the previous quarter.

Infosys said it would recruit 50,000 people from campuses in the current fiscal year and has already onboarded 40,000 freshers during the first half.

While Wipro plans to hire a total of 30,000 freshers.

From the results declared so far, IT companies have not indicated any major change in their fresher intake plans for the year except TCS, which has upgraded its fresher hiring guidance from to 47,000 from 40,000 earlier.

Suzlon Bags a Repeat Order from Adani Green

Moving on to news from the wind energy space, Suzlon Energy today said it has bagged an order to supply 23 wind turbines totalling 48.3 MW from Adani Green Energy.

The renewable energy company will install 23 units of their wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each.

The project is located in Mandvi, Kutch Gujarat and is expected to be commissioned in 2023.

This order is a repeat order from Adani Green and is in addition to the existing order of 226.8 MW as announced on 13 August 2021.

Note that Suzlon shares are widely tracked these days as the company has come out with a rights issue to chart a recovery.

The company has a track record of posting big losses over regular intervals. The company has made losses in 8 out of the last 10 years, its net worth is hugely in the negative and the balance sheet is loaded with debt.

To know more, check out our editorial: should you subscribe to Suzlon's rights issue?

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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