After opening the day on a strong note, Indian share markets trimmed some of the early gains during closing hours.
Benchmark indices still managed to end 1% higher.
The rally was led by broad-based gains across sectors on the back of a rebound in global stock markets, as investors remained focused on US Federal Reserve’s policy decision this week.
At the closing bell, the BSE Sensex stood higher by 578 points (up 0.9%).
Meanwhile, the NSE Nifty closed up by 194 points (up 1.1%).
Apollo Hospitals, Cipla, and Sun Pharma were among the top gainers today.
Nestle, Shree Cements, and Grasim on the other hand, were among the top losers today.
The SGX Nifty was trading at 17,791, up by 167 points, at the time of writing.
The broader markets ended on a positive note. The BSE Mid Cap index gained 1.7% and the BSE Small Cap index ended up by 1%.
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All sectoral indices ended on a firm note today with stocks in the healthcare sector, realty sector, and auto sector witnessing most of the buying.
Investors were hunting for the best pharma stocks to buy as majority of stocks from the pharma sector ended in green.
Shares of Maruti Suzuki, Adani Enterprises, and Eicher Motors hit their 52-week high today.
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Outside the home ground, Asian share markets ended on a strong note.
The Nikkei ended the day higher by 0.4%, while the Hang Seng inched higher by 1.2%. The Shanghai Composite ended 0.2% higher.
US stock futures are trading on a negative note today with Dow futures trading down by 0.4%.
The rupee is trading at 79.7 against the US$.
Continuing the downtrend, gold prices fell today. Gold prices for the latest contract on MCX are trading down by 0.1% at Rs 49,240 per 10 grams.
Meanwhile, silver prices for the latest contract on MCX are trading lower by 0.2% at Rs 56,566 per kg.
Here are five reasons why Indian share markets rallied today.
#1 FII Inflows
This month, FIIs have poured in about Rs 120 bn into Indian equities, and they were net buyers to the tune of RS 3.1 bn on Monday.
With this short recovery, investors’ nerves have calmed. But it remains to be seen when the stock markets will fully recover.
#2 Upbeat Global Markets
Indian benchmarks took positive cues from the bullish overnight setup in the US market.
The Dow Jones ended 0.6% higher. Other Asian markets also staged a rebound with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.7% and Nikkei advanced 0.4%.
#3 Strong Sectoral Gains
All the sectoral indices ended in green today with healthcare, auto and realty sectors leading the rally. It was a terrific Tuesday for majority of sectors.
#4 Rupee Factor
The rupee has been falling for quite some time now. But today, it appreciated in early trade. The rupee appreciated by 16 paise to 79.65 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.
#5 Stable Crude Oil Prices
Oil prices steadied today, after rising in the previous session, on concerns that interest rate hikes in the US to tame inflation will curb economic growth and fuel demand in the world’s biggest crude consumer.
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In news from the pharma sector, Advanced Enzyme was among the top buzzing stocks today.
Share price of Advanced Enzyme Technologies surged more than 10% today as Nalanda India Equity Fund ups stake by 3%.
Today, Nalanda India Equity fund purchased 2.91 m equity shares, representing 2.6% stake in advanced Enzyme Technologies, worth Rs 786.2 m. The deal was carried out via block deal.
Advanced Vital Enzymes, the promoter of Advanced Enzyme Technologies, offloaded 2.57 m equity shares at a price of Rs 270.04 per share.
Nalanda India Equity Fund has been consistently increasing its stake in the company. As of the June 2022 quarter, the fund held a 6.2% stake in the company worth nearly Rs 2 bn. It had increased its stake in the March quarter as well to 6.1% from 4.7% last year.
AdvancedEnzyme Technologies is a research driven company with global leadership in the manufacturing of enzymes and probiotics.
The company providing eco-safe solutions to a wide variety of industries like human healthcare and nutrition, animal nutrition, baking, brewing & malting and many more.
Despite today’s run-up, the stock has underperformed the market by gaining 7% in the past three months. In the past one year, it has declined 27%. The underperformance can be attributed to weak earnings.
Moving on to news from the energy sector, Hero group to expand its renewable energy capacity.
KKR & company and India’s Hero Group are looking to invest US$ 450 m in Hero Future Energies.
This investment would help HFE expand its renewable energy capacity and capabilities across technologies such as solar, wind, battery storage, and green hydrogen.
Commenting on it, KKR & Company and Hero Future Energies in joint stamen said,
- This investment will position HFE for continued growth and support its efforts to expand its renewable energy capacity and capabilities across technologies such as solar, wind, battery storage, and green hydrogen, and into new markets over time.
With this investment the company’s valuation crosses the US$1 bn threshold.
The development comes as India aims to meet half of its energy demands from renewable sources, including solar and wind, by 2030.
Moving on, in latest developments from the IPO space, the market regulator has put Go Digit General Insurance company’s IPO in “abeyance”.
Without disclosing the reason, the regulator said “issuance of observations (has been) kept in abeyance” with regard to the IPO of Go Digit. The information was updated on 16 September.
The issuance of observations by the regulator implies its go-ahead for an IPO and the regulator usually gives its observations on IPO papers in 30 days.
Go Digit had filed preliminary IPO papers with the capital markets regulator on August 17.
Going by the draft papers, the company’s proposed initial public offering (IPO) comprised fresh issuance of equity shares worth Rs 12.5 bn and an offer for sale of 109.4 m equity shares by a promoter and existing shareholders.
This could dampen sentiment as the IPO market was just looking to get back after recent successful offers.
Since IPOs interest you, check out the upcoming IPOs on our website.
To know what’s moving the Indian stock markets today, check out the most recent share market updates here.
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Indian Share Market Update: Top Gainers and Losers
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( With inputs from equitymaster)