Sensex Today Jumps 450 Points; Banking Stocks Rally

Asian share markets climbed today after the US Federal Reserve’s preferred inflation gauge came in below expectations, reigniting rate cut bets.The Hang Seng futures surged 1% while Japan’s Topix rose 0.4%.In US stock markets, stocks on Wall Street rallied on Friday last week to close out on a strong note after two lackluster sessions as a cooler-than-expected inflation report and comments from Federal Reserve officials eased worries about the path of interest rates.Back home, Indian share markets are trading on a positive note tracking global cues.At present, the BSE Sensex is trading higher by 414 points, while the NSE Nifty is trading around 23,700 levels, up 124 points.HDFC Bank, ICICI Bank, and ITC are among the top gainers today.Zomato and NTPC, on the other hand, are among the top losers today.Broader markets are trading on a negative note. The BSE Mid Cap index fell 0.5% while the BSE Small Cap index declined 1.1%.Sectoral indices are trading mixed with stocks in the realty sector, banking sector, and metal sector witnessing most of the buying.Pharma and power stocks, on the other hand, are trading in red.Shares of Websol Energy, Axis Capital, and Everest Organics hit their 52-week high today.The rupee is trading at Rs 85.03 against the US dollar.In commodity markets, gold prices are trading at Rs 76,409 per 10 grams today.Spot gold remained largely unchanged after gaining on an overall softer US dollar on Friday, when US economic data hinted at a slowdown in inflation.
 A new Indian Bullet Train in the Works…In the latest developments from the railways sector, India and Japan are close to finalizing a design for bullet train for the Mumbai-Ahmedabad High-Speed rail (MAHSR) corridor.Interesting to note that over 50% of the civil work for the MAHSR corridor has been completed, spanning across Gujarat, Maharashtra, and the Union Territory of Dadra and Nagar Haveli.Rails for this project are procured from Japan and over 60 km have been laid.Besides importing from Japan, India is preparing to indigenise the production of bullet trains and signaling systems compliant with high-speed rolling stock.The Railway Board has already tasked the Integral Coach Factory (ICF) with manufacturing a bullet train capable of reaching speeds of 280 kmph. The railway production unit has partnered with BEML to produce these trains at a cost of Rs 8.7 billion (bn), with each coach priced at Rs 278.6 million (m).According to BEML, its trainsets will be built at the company’s Bengaluru rail coach complex and are scheduled for delivery by the end of 2026.Speaking of BEML, apart from railway orders, the company has bagged orders from defence, mining, and construction companies, which provides the needed diversification for the order book.In the last five years, the company’s revenue has grown marginally on account of delays in execution. However, the gross and net profit have grown at a CAGR of 11.9% and 20.9% indicating company’s operational efficiency.Going forward, growing orders from repeat customers and diversified order books is expected to drive the company’s revenue and profit growth in the medium term.In the past 1 year, shares of the company have gained over 40%.

Can OMCs Make a Comeback?
Moving on, oil marketing companies (OMCs), which posted subdued performance in the September quarter, could make a comeback in the new year.During the most recent quarter, weak performance of the refining segment, inventory losses and significant LPG under-recoveries contributed to the subdued performance.Bharat Petroleum Corporation (BPCL), Hindustan Petroleum (HPCL) and Indian Oil Corporation (IOC) reported a combined consolidated net profit of Rs 19.9 bn, falling by 92.8% year on year.According to industry experts, the recovery in the refining segment and improvement in product cracks is expected to support performance in the coming two quarters.Meanwhile, range-bound oil prices are expected to minimise the impact of inventory, which in turn will support the profitability of OMCs.As far as the above-mentioned companies are concerned, IOC has ambitious expansion plans. Meanwhile, BPCL is banking on the revival of the Mozambique project to aid to future growth. For HPCL, demerger and potential listing of the lubricant business and the start of its Rajasthan refinery in early 2025-26 could be the key growth catalysts.It remains to be seen how OMCs navigate the challenging times in coming two quarters.
 RBI Levies Penalty on this Private BankShares of IndusInd Bank are in focus today following RBI’s penalty.The RBI has imposed a penalty of Rs 27.3 lakh on IndusInd Bank for non-compliance with certain provisions of norms related to ‘interest rate on deposits’.The RBI had conducted a statutory inspection for supervisory evaluation of the bank with reference to its financial position as of March 2023, and had issued a notice to the private sector lender.The RBI added that the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by IndusInd Bank with its customers.Note that this development comes as a major blow for the private lender, which has had a poor on the bourses.Shares of IndusInd Bank are down over 40% in 2024 so far.In the most recent September 2024 quarter, the bank reported decline in margins and lower non-interest income, which led to decline in operating profits.IndusInd Bank made a Rs 5.3 bn buffer during the quarter, which led to a sharp decline in overall profitability with headline asset quality deterioration.More By This Author:Sensex Tanks 1,176 Points; Nifty Ends Below 23,650Sensex Today Trades Flat; Nifty Below 24,000Sensex Today Tanks 964 Points; Nifty Ends Below 24,000