April 4, 2022 04:12 PM
The market seems to be on a strong footing now, with the BSE Sensex coming back above the 60,000-mark on April 4, and investors’ wealth increasing by Rs 30 lakh crore in the last almost one month.
The easing of Ukraine-Russia crisis, with Russia’s decision to pull out forces from Kyiv, after positive cues from the peace talks between the two countries, is one of the key reasons for the rally. As a result, oil prices fell to around $105 a barrel. This is another relief for emerging markets like India which are net oil importers.
Renewed buying interest from FIIs in Indian equities, especially after net selling to the tune of Rs 2.3 lakh crore in the second half of FY22, also supported the market. FIIs net bought shares worth more than Rs 5,590 crore last week. Reasonable valuations after the recent correction and clear direction from the Federal Reserve about further rate hikes could be the reasons behind the FII inflow.
The BSE Sensex jumped 1,350 points, or 2.28 percent, to 60,627, the highest since January 19, while the Nifty50 surged 384 points, or 2.17 percent, to 18,054 at 2.47 pm.
Investors’ wealth increased by more than Rs 3.75 lakh crore as the BSE market capitalisation had climbed to Rs 271.63 lakh crore at the time of writing this report, against Rs 267.88 lakh crore in the previous session.
HDFC-HDFC Bank merger News
HDFC announced its merger with HDFC Bank, and the merged entity will be the third-largest corporate by market capitalisation. It is also one of the reasons for the rally. Combined, they both have the largest weightage in the benchmark indices.
HDFC Bank and HDFC gained nearly 9 percent each after the merger news. Under the merger agreeement, 42 shares of HDFC Bank would be given for every 25 shares of HDFC.
“It is mega merger that will benefit all stakeholders. For shareholders, this is far better than a buyback at higher prices. This merger will correct the recent underperformance of the HDFC twins,” says VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
If we consider the market cap since the lowest closing of the current year, on March 7 (Rs 241.1 lakh crore), investors have seen the addition of more than Rs 30 lakh crore in wealth. In the same period, the benchmark indices climbed more than 14 percent from the closing on March 7.