4 Reasons Why Sensex Rallied Last Week, BEML Divestment Plan, and Buzzing Stocks Today

Mon, 28 Dec Pre-Open | Monish Vora, TM Team

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Indian share markets ended close to their record highs on Thursday last week.

At the closing bell on Thursday, the BSE Sensex stood higher by 529 points (up 1.14%).

The NSE Nifty closed higher by 148 points (up 1.09%).

Axis Bank and Sun Pharma were among the top gainers.

More than 200 stocks, including Asian Paints, Bajaj Auto, Infosys, Kotak Mahindra Bank, Nestle India and TCS, hit their 52-week high on BSE.

The BSE Mid Cap index ended up by 0.1%, and the BSE Small Cap index ended up by 0.6%.

On the sectoral front, gains were largely seen in the banking sector, finance sector and energy sector.

Gold prices for the latest contract on MCX were trading down by 0.1% at Rs 50,107 per 10 grams at the time of closing stock market hours on Thursday.

To know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani explains why you shouldn't go short on crude oil, in his latest video for Fast Profits Daily.

In the video below, Vijay shares details of a recent geo political event that will cause a lot of short-term volatility in the price of crude oil and when you can expect the next crude oil trade.

Tune in here to find out more:

Top Factors Why Indian Share Markets Rallied on Thursday

Brexit Deal: News that a Brexit trade deal was imminent boosted global sentiment. Britain and the European Union were on the cusp of striking a narrow trade deal, media reports said.

Firm Global Markets: European stock markets rose on Thursday with Britain and the EU finally expected to announce a post-Brexit trade deal.

Positive Macro Data: Data showed the number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week.

Recovering Economy: The monthly bulletin of the RBI for December said that more evidence has emerged since the last bulletin which shows that the Indian economy is coming out of the Covid-induced slowdown.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

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Top Stocks in Focus Today

Among the buzzing stocks today will be Tata Communications.

Digital solutions provider Tata Communications has acquired a 58.1% stake in Oasis Smart SIM Europe SAS, a France-headquartered embedded-SIM (eSIM) technology provider.

The financial terms of the deal were not disclosed.

Following the investment, Tata Communications will integrate eSIM technology with its MOVE platform, a global Internet of Things (IoT) solution. The platform enables enterprises and device manufacturers to capture, move and manage information worldwide through a network independent, platform approach.

Market participants will also track Mrs Bectors Food share price as the company made its debut on the bourses last week.

The company's Rs 5.4-billion public issue was subscribed 198.02 times, the highest subscription seen by IPO in 2020.

BEML Divestment Plan Back on Track

BEML share price witnessed buying interest last week after reports stated that the government's disinvestment process is coming back online.

As per reports, over the next few weeks, the department of investment and public asset management (DIPAM) will finalize the process of strategic sale of several public sector undertakings (PSUs) including BEML, India Tourism Development Corp (ITDC) and Central Electricity Corporation.

The core group of secretaries on disinvestment (CGD) is to meet on December 28 to finalize the sale of defence PSU BEML, formerly Bharat Earth Movers.

During the meeting to be held under the chairmanship of the cabinet secretary, preliminary information memorandum (PIM) and expression of interest (EoI) to invite bids are likely to be finalised.

The cabinet has already approved the strategic sale of BEML by divesting 26% of the government stake. At present, the government holds 54% in the defence public sector undertaking.

After getting approval from the alternate mechanism, an expression of interest will be issued.

Another meeting is planned for December 30 during which the sale of ITDC-owned The Ashok hotel in New Delhi will be taken up.

How the above divestment process pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Note that Prime Minister Narendra Modi's administration is relying on non-tax revenues as the coronavirus-induced lockdowns threatens to push the economy into a historic contraction.

The government seeks to raise a record Rs 2.1 trillion (US$ 28.5 billion) from asset sales in the current fiscal year to March.

With big ticket divestment plans hit by the Covid-19 pandemic, the government is readying public-sector companies for minority stake sale in the remaining months of current fiscal.

The government has raised Rs 61.3 billion by selling minority stake in Hindustan Aeronautics and Bharat Dynamics through offer for sale (OFS). The government also divested 15.2% in Mazagon Dock Shipbuilders through an initial public offering.

The government has already invited bids for Bharat Petroleum Corporation (BPCL), Air India and Shipping Corporation of India.

So far, DIPAM has raised Rs 263.64 billion. Of this, Rs 126.7 billion has come from disinvestment, Rs 13,696 from dividend and Rs 109.9 billion from Bond ETF.

How all this pan out remains to be seen. Meanwhile, stay tuned for more updates from this space.

And 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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