After opening the day on a strong note, Indian share markets extended gains as the session progressed and ended near day’s high.
After seven consecutive sessions of losses, domestic equities witnessed a relief rally today, helped by the Reserve Bank of India’s assurance to take necessary steps to shield the domestic economy from the global shocks.
This sharp rally in the market added Rs 3 tn to investors wealth.
At the closing bell, the BSE Sensex stood higher by 1,016 points (up 0.3%).
Meanwhile, the NSE Nifty closed up by 276 points (up 1.6%).
Hindalco, Bharti Airtel, and IndusInd Bank were among the top gainers today.
Asian Paints, Shree Cements, and Coal India on the other hand, were among the top losers today.
The SGX Nifty was trading at 17,089, lower by 277 points, at the time of writing.
The broader markets ended on a positive note. The BSE Mid Cap index ended higher by 1.7%, while the BSE Small Cap index ended up by 2.1%.
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Barring oil & gas sector, all sectoral indices ended on a firm note today, with stocks in telecom sector, finance sector, realty sector, and power sector witnessing most of the buying.
Shares of Solar Industries, Gujarat Fluorochemicals, and Mazagon Dock Shipyard hit their 52-week high today.
Outside the home ground, Asian share markets ended on a mixed note.
At the close in Tokyo, the Nikkei ended down by 1.8%, while the Hang Seng was trading higher by 0.3%. The Shanghai Composite stood down by 0.5%.
US stock futures are trading on a positive note with Dow futures trading down by 0.6%.
The rupee is trading at 81.4 against the US$.
Gold prices are currently trading higher by 0.3% at Rs 50,187 per 10 grams.
Meanwhile, silver prices for the latest contract on MCX are trading up by 1.3% at Rs 56,160 per kg.
Here are three reasons why Indian share markets rallied today.
#1 RBI’s Growth Assurance
On expected lines, the Reserve Bank of India’s Monetary Policy Committee raised the repo rate by 50 basis points to 5.9% and retained its stance on remaining focused on the withdrawal of accommodation.
With the rising geopolitical tensions and their consequent impact on growth the domestic conditions remain conducive, with credit growth picking up.
#2 Upbeat Global Markets
Indian benchmarks took positive cues from the bullish European market and Asian market.
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#3 Rupee Factor
Following the RBI’s decision and outlook, the rupee rose sharply against the dollar. The rupee was falling for quite some time, traded at Rs 80.58 against the US dollar.
Rupee’s appreciation often attracts FIIs as it adds to the return for foreign investors.
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In news from the IT sector, L&T Technology share price was among the top buzzing stocks today.
The share price of L&T Technology jumped 2% after the company joined hands with Qualcomm Technologies.
L&T Technology today announced that it is collaborating with Qualcomm Technologies, to deploy end-to-end solutions for the global 5G Private Network Industry utilizing their combined core expertise in the Hi-Tech & Telecommunication domain.
The collab will bring together core competencies in telecommunication solutions and services for the benefit of end customers in the manufacturing and warehousing/logistics sector.
With the continued surging demand, L&T Tech is leveraging its chip-to-cloud expertise to unleash the power of 5G and transform global manufacturing and supply chain processes.
As part of the proposed collaboration, Qualcomm Technologies will engage Private Networks RAN Automation technology for the automation and management of small cells along with pre-integrated PN solutions.
While L&T Tech will facilitate end-to-end system integration, design, and implementation of use cases, and provide engineering consulting, and deployment services along with edge-to-cloud orchestration and management.
Combining their diverse ecosystem strengths, both Qualcomm Technologies and LTTS are now enabling Industry 4.0 solutions for enterprises.
Commenting on this, Chief Operating Officer of L&T Technology Services, Abhishek Sinha said,
- With the increasing demand for a connected world, LTTS is constantly leveraging its chip-to-cloud design expertise to realize the power of 5G and reshape the ideas of business. 5G is a breakthrough technology and we, at LTTS, are well-poised to meet the demands of this rapidly evolving connectivity space in association with an industry leader like Qualcomm Technologies.
In line with the terms of collaboration, L&T Technology will establish a center in California with Qualcomm Technologies to accelerate the adoption of 5G private wireless networks.
Due to a consistent plunge in IT stocks and market volatility, shares of L&T Technology are down by 37% so far in 2022.
Moving on to the news from the banking sector, most of the bank stocks rallied today.
The Reserve Bank of India (RBI) today announced a 50-bps rate hike after its Monetary Policy Committee (MPC) meeting.
This RBI’s move received a positive response from the stock market, especially banking sector stocks. Banking majors like Kotak Mahindra Bank, HDFC Bank and Bank of Baroda surged to the tune of 2%.
RBI today has retained its inflation estimates for financial year 23, with relief visible only from the March quarter onwards. It has also tweaked its growth estimates to 7% for 2022-2023.
With RBI data indicating strong credit growth, currently at a multi-year high, most banks especially those with a higher share of the floating rate will be better placed in the rising interest rate environment.
However, the lagging deposit growth remains a cause of concern. While India is in a better place than its global peers, with domestic indicators showing continuous improvement, global factors such as ECB and Fed’s indication of steeper rate hikes in the coming policies will continue to force RBI to front load interest rates in the coming MPC meetings.
Moving on to news from the IPO space, Airox Technologies files IPO papers with SEBI.
Medical equipment manufacturer Airox Technologies has filed preliminary papers with capital markets regulator Sebi to raise Rs 7.5 bn through an initial public offering (IPO).
According to the DHRP filled by the company, the IPO is entirely an offer for sale by the promoters- Sanjay Jaiswal and Ashima Jaiswal. Under this, both directors will offload equity shares worth Rs 5.2 bn and Rs 2.3 bn, respectively.
Airox Technologies, the manufacturer of oxygen generators, has a market share of 50-55% in terms of the operational private hospital PSA medical oxygen market.
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.
For information on how to pick stocks that have the potential to deliver big returns,
Indian Share Market Update: Top Gainers and Losers
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( With inputs from equitymaster)