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Home / Markets / Stock Markets /  Sensex Trades Higher, Nifty Above 17.6k; Power Grid, Axis Bank Top Gainers

Asian stock markets are trading on a positive note today on hopes that the global economic recovery can weather the omicron virus variant as well as tighter central bank policies to fight elevated inflation.

The Hang Seng and the Shanghai Composite are trading up by 1.5% and 1%, respectively. The Nikkei is up 0.9%.

In US stock markets, Wall Street indices advanced on Friday as market participants digested an inflation reading that was in line with consensus, but also marked the largest annual increase in consumer prices in nearly four decades.

All the indexes ended the session higher and the benchmark S&P 500 posted its biggest weekly percentage advance since February, as waning jitters over the Omicron coronavirus variant helped fuel a broad rally early in the week.

The Dow Jones Industrial Average rose 216 points, or 0.6%, the S&P 500 gained 45 points, or 1% and the Nasdaq Composite added 113 points, or 0.7%.

Back home, Indian share markets opened on a positive note, following the trend on SGX Nifty.

The BSE Sensex is trading up by 393 points. Meanwhile, the NSE Nifty is trading higher by 117 points. Power Grid and Axis Bank are among the top gainers today. Bajaj Finance, on the other hand, is among the top losers today.

The BSE Mid Cap index and the BSE Small Cap index are trading higher by 0.7% and 1.1%, respectively.

All sectoral indices are trading in green with stocks in the power sector and metal sector witnessing most of the buying.

Shares of Siemens and Tech Mahindra hit their 52-week highs today.

The rupee is trading at 75.59 against the US$.

Gold prices are trading up by 0.1% at 48,180 per 10 grams.

Meanwhile, silver prices are trading up by 0.3% at 61,319 per kg.

Gold inched higher today as elevated US consumer prices lifted its appeal as an inflation hedge, while investors awaited a flurry of central bank meetings this week, including by the US Federal Reserve, for further direction.

Crude oil prices extended gains from last Friday, helped by growing optimism that the Omicron coronavirus variant's impact will be limited on global economic growth and fuel demand.

Speaking of the current stock market scenario, despite the BSE Small cap index surging over 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes small cap stocks are set for a massive up move in 2021 and beyond.

Here's why...

The Smallcap to Sensex ratio has risen from 0.32 times to 0.48 times. This compares to long term median of 0.43 times. It has moderated from 0.51 in August 2021 post the recent rise in Sensex.

More importantly, it is way lower than the previous peak ratios: 0.76 in September 2005, 0.68 in January 2008, 0.55 in September 2010, and 0.58 in January 2018.

Source: ACE Equity
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Source: ACE Equity

This relative valuation indicator suggests there is still a lot of juice in the rally.

In news from the logistics sector, Gati share price is among the top buzzing stocks today.

Allcargo group firm Gati is looking to become a 30-bn company in three years, driven by key accounts, micro, small and medium enterprises (MSMEs) and business-to-business (B2B) retail.

It has identified three areas, including talent acquisition and building infrastructure, to achieve the target, its Chief Executive Officer Pirojshaw Sarkari has said.

He acknowledged that Gati got distracted in the past 5-7 years as it tried its hands in other businesses rather than concentrating on the express logistics before coming under the ownership of Allcargo Group.

Allcargo is the promoter and the single-largest shareholder of Gati with 47% ownership, followed by KWE with about 3.5% shares in the company.

Sarkari said the company might have got down in service in the past but a vast network remained its strength.

With a strong presence across Asia, including a nationwide network, Gati covers 735 out of the country's 739 districts and more than 19,800 PIN codes.

Earlier this week, Gati-KWE opened its largest state-of-the-art transhipment centre at the Allcargo Logistics Park at Farukhnagar in Gurugram.

The company has also announced plans to set up seven more such facilities, including Mumbai, Bengaluru, Hyderabad, Nagpur and Indore, in the next 15 months and 12 such hubs in the next three years.

The company had clocked a revenue of 13.2 bn in the financial year ended March 2021, as compared to 17.1 bn in the earlier fiscal.

Factors like pandemic-induced disruptions, changing customer behaviour and consumption patterns have had an impact on revenue numbers in the short term.

Moving on to news from the mining sector, Anil Agarwal’s Vedanta will reward shareholders with a dividend payout for the second time this year after reporting back-to-back bumper profits in the past year.

In September, the Mumbai-based commodities major had announced a first interim dividend of 68.8 bn.

Vedanta’s profit in the three months through September surged more than five-fold as base metal prices rallied on strong demand fired up by global stimulus.

An exchange filing showed that the company approved an interim dividend of 13.50 a share, totaling 50.2 bn.

The move comes after its cash-rich unit Hindustan Zinc announced a payout of US$1 bn earlier this week. The record date for the purpose of payment of dividend is 18 December 2021.

The company’s parent Vedanta Resources will be the biggest beneficiary of the payout and the cash will aid in repaying some of its debt obligations.

Vedanta share price is currently trading up by 2.2%. 

This article is syndicated from Equitymaster.com

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