The headline indices today gained over a percent supported by across the board buying with Nifty reclaiming 11400 mark and Sensex gaining as much as 1.6 percent to day's high of 38,708. Among sectoral indices, Nifty Bank gained the most by over 3 percent followed by Nifty auto index. On the rally today, India VIX, a measure of volatility in the stock markets, also cooled off by over 4 percent.
Here are given the likely reasons for Nifty hitting 11400 mark on October 1, 2020:
1. Banking stocks lifted market benchmarks:
There has been strong buying in banking stocks pushing benchmark indices higher today. Top gainers from the space include Equitas Holdings, IndusInd Bank, RBL Bank, Bandhan Bank, ICICI Bank and Axis Bank among others. However PNB plunged to near its 52-week low after the public run bank reported Rs. 1230 crore fraud by Sintex Industries.
2. Gain in Heavyweight stocks:
Both HDFC twins and RIL gained in today's session. HDFC Bank's management iterated that the bank's operations have reached pre-Covid levels. Also, HDFC gained momentum and climbed over 3 percent despite National Housing Bank imposing a monetary penalty on the housing financier.
RIL also gained over 1% on the back of fresh investment worth Rs. 1875 crore into its retail arm Reliance Retail from US private equity firm Silver Lake Partners. But later in afternoon trade the stock pared its early gains to trade lower.
3. September auto sales figure instill confidence:
Majority of the auto companies reported decent sales volume for the past month showing signs of improvement in the economy. Bajaj Auto saw a healthy jump in sales of 10% year-on-year and the official from the company said he expects sales to be even better for October month.
For Maruti total sales increased 30.8 percent year on year with sale of 1.6 lakh units. Domestic sales were up 32.2 percent while exports recorded a jump of 9% year-on-year during September.
4. Factory activity rebounded at its fastest pace in 8 years:
Suggestive of green shoots in the economy, India's factory activity data released today for September month showed the fastest expansion in eight years time with Nikkei manufacturing PMI jumping to 56.8 as against 52 recorded for the previous month. This is the highest reading since January 2012.
5. Announcement of Unlock 5.0:
On Wednesday, MHA notified rules for Unlock 5.0 announcing further relaxations outside of containment areas. Cinemas, multiplexes and theatres are allowed to resume operations with up to 50% seating capacity. And SOPs on the same shall be issued by Ministry of Information and Broadcasting. Also Business to Business (B2B) exhibitions can now be organized and Department of Commerce will come out with SOPs for it.
6. Global cues:
On the back of strong global cues, Indian market traded strong. Hopes of fresh US stimulus to ride the coronavirus wave lifted sentiment all across Asian markets. However Tokyo Stock Exchange saw worst-ever technical snag today. European stocks were also trading with gains with France's CAC and UK's FTSE up over 0.55 and 0.8 percent, respectively.