Sensex Ends 259 Points Higher; Banking and Finance Stocks Witness Buying

Tue, 29 Dec Closing

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Extending gains to the fifth straight day, Indian share markets witnessed positive trading activity throughout the day and ended higher.

After scaling fresh peaks in opening trade, benchmark indices erased some gains in the afternoon session. However, indices regained momentum during closing hours amid buying in financial stocks.

At the closing bell, the BSE Sensex stood higher by 259 points. The NSE Nifty stood higher by 59 points.

IndusInd Bank and Tech Mahindra were among the top gainers today. Nestle, on the other hand, was among the top losers today.

SGX Nifty was trading at 14,010, up by 118 points, at the time of writing.

The BSE Mid Cap index ended down by 0.1%. The BSE Small Cap index ended higher by 0.2%.

The BSE Smallcap index rose to 31-month high after domestic mutual funds and insurance companies acquired select companies' share from open market.

Sectoral indices ended on a mixed note with stocks in the banking sector and finance sector witnessing buying interest.

Metal stocks and power stocks, on the other hand, witnessed selling pressure.

Asian share markets ended higher today, with Japanese stocks hitting a 30-year high, as hopes that a long-awaited US pandemic relief package would be expanded, and a Brexit trade deal supported investor risk appetite.

As of the most recent closing prices, the Hang Seng stood higher by 1% and the Nikkei zoomed 2.7%.

US stock futures are trading higher today, indicating a positive start for Wall Street indices.

Nasdaq Futures are trading up by 54 points (up 0.4%), while Dow Futures are trading up by 159 points (up 0.5%).

European stock markets extended their year-end rally as a Brexit trade deal, hopes of an expanded US stimulus package and euro zone's marathon Covid-19 vaccination campaign brightened prospects for global growth in 2021.

The rupee is trading at 73.38 against the US$.

Gold prices are trading up by 0.2% at Rs 50,129 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?

Speaking of stock markets, in his latest video, Co-head of Research at Equitymaster, Rahul Shah talks about his preferred portfolio for 2021 and beyond.

In the video below, Rahul shares his portfolio strategy and the important principles one needs to keep in mind in order to build a market beating portfolio.

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In latest developments from the IPO space, the markets regulator has granted the go-ahead to small lender Suryoday Small Finance Bank to float its initial public offering (IPO).

The IPO comprises fresh issuance of 1,15,95,000 equity shares and an offer for sale of up to 84,66,796 equity shares by existing shareholders, according to the draft papers.

Those offering shares through the OFS route include International Financial Corporation, Gaja Capital, HDFC Holdings, IDFC First Bank, Kotak Mahindra Life Insurance Company, DWM (International) Mauritius and Americorp Ventures.

Suryoday Small Finance Bank has proposed to utilise the net proceeds from the fresh issue towards augmenting its Tier-1 capital base to meet future capital requirements.

How this IPO sails through remains to be seen.

Moving on to stock specific news...

ICICI Bank was among the top buzzing stocks today.

ICICI Bank on Monday said it has joined hands with Google Pay for issuance of FASTag, a reloadable tag which enables automatic deduction of toll charges and lets users pass through the toll plaza without stopping for cash transactions.

FASTag is a brand name owned by Indian Highways Management Company, which carries out electronic tolling and other ancillary projects of National Highway Authorities of India (NHAI).

Meanwhile, country's largest insurer Life Insurance Corporation (LIC) has sold 2% stake in ICICI Bank through open market transactions.

The insurer sold 138 million shares, representing 2% stake of ICICI Bank, over a period of November 27 to December 24, 2020, the bank said in a regulatory filing.

Following the stake sale, LIC's holding in the bank has reduced to 6.74% from 8.74% earlier.

ICICI Bank share price ended the day up by 1.9%.

In other news, Axis Bank is pruning its overseas operation as part of a strategy of focusing Indian market.

Axis Bank closed branches in Shanghai and Colombo last month while it is in the process of winding up Hong Kong Branch, senior bank officials said.

Reports also state that Axis Bank is looking to surrender its UK banking subsidiary license and close operations by April 2021.

Axis Bank share price ended the day up by 2.1%.

Speaking of the banking sector, note that the sector was one of the worst affected sectors in the Indian stock market when Covid-19 struck.

Banking stocks were severely punished. No investor wanted to touch them even with a 10-ft pole.

However, sentiment have changed now as investors are chasing banking stocks like never before.

Have a look at the monthly returns of major sectors for the month of March and October 2020 in the chart below:

Banks were among major losers with a cut of 34% in the month of March. Cut to October, they were the biggest gainers for the month with more than 11% returns!

If you're interested in knowing what could be the reason behind such a change in sentiment, you can read about it in one of the editions of Profit Hunter: Banks are booming in a Covid World.

Moving on to news from the chemical sector, shares of Fineotex Chemical hit a 52-week high of Rs 64.90 on the BSE in early trade today.

Shares of the company have surged as much as 30% in the past two trading days after Nippon India Mutual Fund (MF) bought nearly 6% stake in specialty chemicals company via open market.

On Monday, Nippon India MF acquired 6.61 million equity shares, representing 5.9% of total equity of Fineotex Chemical, for about Rs 300 million through block deal on the BSE, the exchange data shows.

The domestic mutual fund bought shares for its scheme Nippon India Small Cap Fund at price of Rs 45.25 per share.

Surendra Deviprasad Tibrewala, the promoter of Fineotex Chemical, sold 7.8 million equity shares in the company at price of Rs 45.22 per share via block deal.

Fineotex Chemical share price ended the day up by 20%.

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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