5 Reasons Why Sensex Jumped 505 Points Today

Tue, 1 Dec Closing

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Indian share markets continued momentum and ended their session on a strong note today.

The Sensex rallied over 500 points and the Nifty topped 13,100-mark boosted by the better than expected GDP data.

At the closing bell, the BSE Sensex stood higher by 505 points (up 1.2%).

The NSE Nifty closed higher by 140 points (up 1.1%).

GAIL and Sun Pharma were among the top gainers today.

The SGX Nifty was trading at 13,146 levels, up by 153 points, at the time of writing.

The BSE Mid Cap index ended up by 0.9%. The BSE Small Cap index ended up by 0.8%.

All sectoral indices ended in the green with stocks in the realty sector, IT sector and telecom sector witnessing maximum buying interest.

Asian stock markets ended on a positive note. As of the most recent closing prices, the Hang Seng ended up by 0.9% while the Nikkei ended up by 1.3%.

The rupee is trading at 73.65 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.5% at Rs 48,101 per 10 grams.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Here are Top 5 Reasons Behind Today's Share Market Rally

Positive News on Covid-19 Vaccine: According to a top government officials, some Americans could begin receiving vaccinations before Christmas. Moderna Inc has sought US emergency authorization for its Covid-19 vaccine after a late-stage study showed it to be 94.1% effective, with no serious safety concerns.

Global stock markets edged higher today after robust China data boosted expectations of a recovery from the Covid-19 downturn and as drug makers seek fast approval for their vaccines.

US stock futures also pointed to a strong start on Wall Street with investors focusing on November manufacturing surveys from Europe and the United States.

GDP Growth: Sentiment got a boost as India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5% in Q2. The GDP had contracted by a record 23.9% in the June quarter of FY21.

GST Collections: Goods and services tax (GST) collections surpassed Rs 1 trillion for the second straight month in November. The mop up was Rs 1.9 billion less at Rs 1.049 trillion in November compared to Rs 1.051 trillion in October.

FII Inflows: Riding on record inflow of foreign institutional investor (FII) money, stock markets have been on a secular rally. Sentiments also got a boost from this news today and supported the momentum.

All Sectoral Indices End in Green: Barring consumer durables sector, all sectoral indices ended in green today. Realty, metal and IT stocks witnessed most of the buying interest and rose more than 2% each.

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, the past month was a staggering one.

Benchmark indices saw huge buying interest and went on to touch record-high levels.

The BSE smallcap index was up 13% in November.

The BSE smallcap index has risen more than 10% in a month only 6 times in the last decade.

Foreign investors (FIIs) invested a net amount of around Rs 650 bn in November. This is the biggest purchase by FIIs by a big margin so far.

Will this rally in Indian share markets continue in December?

We reached out to Brijesh Bhatia, our new team member and Research Analyst of Fast Profits Reports, for his view on the Indian stock markets.

Here's what he had to say...

• The bulls celebrated Diwali with fireworks and started Samvat 2077 with a roar.
  
  The Nifty gained 11.4% in the month of November. 80% of the trading days ended on positive note. Midcap and Small Cap indices gained 15.5% and 13% respectively.
  
  We had 20 trading days in November 2020. 16 of them ended on positive note with 8 straight days of gains from 2nd to 11th November.
  
  The Nifty has now turned positive for CY2020 and has hit a new all-time high of 13,145.85.
  
  All sectorial indices ended on a positive note for the month.
  
  Metals (24.84%), Private Banks (24.25%), PSU Banks (23.63%), and Financial Services (22.84%) gained more than 20%.
  
  Sectors like IT (4.05%) and Pharma (5.30%) which has outperformed in the first leg of rally, were the underperformers.

• The stocks in Nifty 200 were on fire too. Out of 200 stocks, 179 ended on a positive note which means 90% stocks were in green zone.
  
  Here is the list of top 5 gainers and losers for the month:

• The broad-based buying indicates the momentum is still in the bull's favour. Entering the month of December, can this momentum prolong?
  
  Well, if we look at the seasonality chart for Nifty 50, December tends out to be the best month for bulls with an average return of 3.43% since 1996.
  
  Hope we have a Santa rally this Christmas too and end the pandemic year near all-time high levels!

You can read Brijesh's detailed profile here.

And in case you missed his first Equitymaster video, you can watch it now.

Moving on to stock specific news...

TVS Motor was among the top buzzing stocks today.

TVS Motor's sales grew by 21% year-on-year (YoY) in November 2020. The company registered sales of 3,22,709 units in November 2020 as against 2,66,582 units in the month of November 2019.

Total two-wheelers sales grew by 25% YoY recording 3,11,519 units in November 2020 as against 2,49,350 units in November 2019.

Motorcycle grew by 26% YoY recording 1,33,531 units in November 2020 as against 1,05,963 units in November 2019.

Scooter sales of the company grew by 26% YoY registering 1,06,196 units.

ICICI Bank share price was also in focus today as the Supreme Court Tuesday rejected Chanda Kochhar's appeal against the Bombay High Court order which had dismissed her plea against her termination as the managing director and CEO of ICICI Bank, saying the issue falls within the realm of a private bank and employee.

The top court was hearing Kochhar's appeal against the March 5 order of the high court which had dismissed her plea against termination as managing director and CEO of ICICI Bank, while noting that the dispute arises from a contract of personal service.

The high court had accepted the bank's contention that Kochhar's plea was not maintainable as the dispute was contractual and concerns a private body.

In latest developments from the IPO space, the initial public offering of quick service restaurant chain Burger King India will open tomorrow i.e. December 2.

The price band for the IPO has been set at Rs 59-60 per share.

The company is aiming to raise Rs 8.1 billion through the issue which comprises a fresh issue of shares worth Rs 4.5 billion, and an offer for sale of up to 60 million shares by promoter entity QSR Asia Pte worth Rs 3.6 billion.

Burger King intends to utilize the fresh proceeds to finance the roll-out of new company-owned Burger King Restaurants and to meet the general corporate purposes.

Burger King was the fastest growing international QSR chain in India during the first five years of their operations, based on the number of restaurants. Their master franchisee arrangement provides them with the ability to use Burger King's globally recognized brand name to grow their business in India.

As per the company's red herring prospectus, the Burger King brand is the second largest fast food burger brand globally as measured by the total number of restaurants, with a global network of over 18,000 restaurants in more than 100 countries and US territories, as of June 30, 2019.

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

Speaking of IPOs, so far this year, 12 companies have raised nearly Rs 250 billion through IPOs compared with Rs 123.6 billion raised by 16 companies in 2019.

Some of the companies that had deferred their IPO plans, now want to tap the market again on robust investor appetite, said bankers.

Furthermore, nearly half a dozen companies are lining up to launch their IPO this month.

Companies like Suryoday Small Finance Bank, ESAF Small Finance Bank, Nazara Technologies, RailTel, Burger King, Kalyan Jewellers and Antony Waste Management are among those that are conducting road shows and planning IPOs in December, The Economic Times mentioned in a report citing bankers.

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

You can check out 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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Indian Share Market Update: Top Gainers and Losers