5 Reasons Why Sensex and Nifty Closed at Record High Levels Today

Tue, 10 Nov Closing

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Indian share markets closed at record high levels today.

Benchmark indices continued their momentum and ended higher for the seventh straight session today on the back of progress in the development of a coronavirus vaccine.

At the closing bell, the BSE Sensex stood higher by 680 points (up 1.6%).

The NSE Nifty closed higher by 170 points (up 1.4%).

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

The SGX Nifty was trading at 12,650, up by 152 points, at the time of writing.

The BSE Mid Cap index ended down by 0.1%. The BSE Small Cap index ended down by 0.5%.

On the sectoral front, gains were largely seen in the banking sector and finance sector.

Asian stock markets ended on a positive note today. As of the most recent closing prices, the Hang Seng ended up by 1.1% and the Shanghai Composite ended down 0.4%. The Nikkei surged and ended up by 0.3%.

The rupee is trading at 74.22 against the US$.

Gold prices are trading up by 1% at Rs 50,255 per 10 grams.

Globally, gold prices edged higher today after falling over 5% in the previous session. In the previous session, the precious metal fell after US drugmaker Pfizer said its experimental Covid-19 vaccine was more than 90% effective, based on initial trial results. Tracking global cues, gold prices also moved higher in domestic markets.

To know more about gold, visit our YouTube Playlist on gold investing.

Here are Top 5 Factors Why Indian Stock Markets Rallied Today

Covid-19 Vaccine Hopes: Stock markets around the globe got a boost after Pfizer said its Covid-19 vaccine, developed with German partner BioNTech SE, was more than 90% effective in preventing infection, marking the first successful results from a large-scale clinical trial.

Rally in Banking and Financial Stocks: Gains were seen as banking and financial stocks rose and gave a boost to the benchmark indices. Banking and finance stocks are seen rallying on improved business outlook post Q2FY21 results, end to moratorium, and improvement in economic activities. Both, banking and finance sector rose more than 3.5% in today session.

Improving Macroeconomic Data: Signs of improvement on the macroeconomic front also boosted stock market sentiment. Positive macroeconomic data on core sector growth, rebound in GST revenues, and robust power demand is driving economic recovery.

Strong Q2FY21 Earnings: Indian stock markets are also seen rising on the back of favorable September quarter result announcements from most companies.

US Fed Stimulus: Stock markets also rose on news about more stimulus measures from the US government. Dallas Federal Reserve Bank President Robert Kaplan said the US economy is rebounding from a deep contraction, but the resurgence of Covid-19 poses downside risks. Cleveland Federal Reserve Bank President Loretta Mester said the emergency lending programs the Fed set up during the coronavirus pandemic are still needed.

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 markets, India's #1 trader, Vijay Bhambwani talks about how the market told him Joe Biden would win the US elections, in his latest video for Fast Profits Daily.

In the video below, Vijay shares his 360-degree worldview approach to trading and how this process hinted at a change in US politics a few months ago.

Tune in here to find out more:

Also, speaking of the current stock market scenario, note that Indian share markets have climbed back to their highest levels since the pandemic began.

The Sensex is trading above the 43,000-mark. Meanwhile, the Nifty is trading above the psychological 12,000-mark.

The smallcap index is up more than 70% since 23 March.

As per Richa Agarwal, lead smallcap analyst at Equitymaster, there could still be a lot of steam left to this smallcap rebound rally.

Have a look at the history of previous smallcap crashes and rebounds over the last two decades...

As you can see, every big fall in the smallcap index was followed by a sharp up move, a minimum gain 200%. Twice the rebounds were just shy of touching 300%.

Richa believes if you focus on the quality of business, margin of safety in valuations, and an optimum asset allocation, you are likely to create huge wealth for yourself.

Moving on to stock specific news...

Mahindra & Mahindra (M&M) was among the top buzzing stocks today.

M&M reported an 88% year-on-year (YoY) fall in Q2FY21 net profit for M&M and Mahindra Vehicle Manufacturers Ltd (MVML) at Rs 1.6 billion against Rs 13.5 billion reported in Q2FY20.

Revenue (M&M + MVML) for the said quarter came at Rs 115.9 billion, up 6% YoY against Rs 109.3 billion in Q2FY20.

Earnings before interest, tax, depreciation, and amortization (EBITDA) came at Rs 20.5 billion while EBITDA margins stood at 17.7%.

On a consolidated basis, M&M's revenue from operations for Q2FY21 stood at Rs 235.6 billion against Rs 239.3 billion YoY.

The automotive segment's revenue stood at Rs 110.8 billion against Rs 120.5 billion YoY. Revenue from the farm equipment segment stood at Rs 64.7 billion against Rs 53.6 billion YoY.

Consolidated profit for Q2FY21 came at Rs 1.3 billion against Rs 3.4 billion YoY.

The company said in Q2FY21, the Indian tractor industry reported a growth of 41.4% which is the highest ever Q2 quarter growth for the tractor industry.

It added that timely relaxation of the coronavirus lockdown restrictions for the agricultural sector supported by healthy reservoir levels, a good increase in MSP for Kharif crops and important reforms in the agri sector announced by the government focused on improving the state of agriculture in India in the mid to long-term have helped tractor demand to bounce back after April 2020.

M&M share price ended the day up by 0.5%.

In news from the IPO space...

Hyderabad-based Gland Pharma, which launched its maiden initial public offer (IPO) yesterday, has seen a tepid response so far on November 10 - the second day of its bidding.

The Rs 64.8 billion public offer was subscribed just 8.5% by 2 pm today.

The portion set aside for retail investors was subscribed 11.8% and that of non-institutional investors by 1%. The reserved portion of qualified institutional investors was subscribed 10%.

The price band for the offer has been fixed at Rs 1,490-1,500 per share. The issue will close on 11 November.

The IPO, India's largest IPO in the pharma sector, comprises a fresh issue aggregating up to Rs 12.5 billion and an offer for sale of up to 34.9 million shares.

While China's Fosun Pharma Industrial Pte is offering to sell 19 million equity shares, Gland Celsus Bio Chemicals is planning to sell 10 million shares.

The other two shareholders Empower Discretionary Trust and Nilay Discretionary Trust are offloading 3.6 million and 1.8 million shares, respectively.

The company plans to utilize the fresh issue proceeds for funding incremental working capital requirements, capital expenditure requirements and for general corporate purposes.

The previous largest IPO in pharma space was Rs 17.4 billion raised by Eris Lifesciences in 2017 while Alkem Laboratories and Laurus Labs raised about Rs 13.5 billion each in 2015 and 2016, respectively.

So far in India, only 14 companies have raised over Rs 60 billion through IPOs.

So far in 2020, 11 companies have raised Rs 184.8 billion through IPOs of which SBI Cards and Payment Services alone has raised Rs 103.5 billion.

How this IPO sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

Speaking of IPOs, in one of his videos, Vijay Bhambwani shares his thoughts on the recent spate of IPOs and what it means for the stock market.

You can check the same here: My View on the IPO Market

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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