It's a Happy Diwali for D-St bulls! Key factors that drove markets higher

Samvat 2079 kicked off on a bullish note for Dalal Street investors, with benchmark indices notching about 1% gains during the special Muhurat trading session on Monday.

Nifty50 crossed 17,700-mark, ending 0.9% higher at 17,738 points. Its BSE counterpart Sensex topped 59,900 and tested a high of 59,994.25, before ending 0.9% higher at 59,832 points. Among Nifty50 stocks, Axis Bank hit a fresh 52-week high, while Nestle India scaled a lifetime high.

Smallcap stocks remained the flavour of the season as investors picked quality names with favourable risk-reward metrics. Big movers in this space include Edelweiss Financial Services, Sunteck Realty, Multi Commodity Exchange of India, Indigo Paints, Tejas Networks, Ratnamani Metals & Tubes, Greenpanel Industries, Borosil Renewables, and Finolex Cables which gained 3-6%.

Indian equities bucked peers in Asia, where major markets ended with deep cuts on Monday.

Here are the few factors that drove the market higher:

• Banks riding high

Banks were the leaders in trade, with Nifty Bank hitting a one-month high of 41,427. This has been on the back of strong earnings posted by some of the banking majors. Barring Kotak Mahindra Bank, all other constituents of Nifty Bank ended in the green.

Shares of ICICI Bank rose 2% on reporting high double-digit growth in net profit for the September quarter. Axis Bank, which tested a 52-week high of Rs 918.45, ended with 1% gains. Most experts have banks among their top Diwali picks given the strong credit growth and improvement in asset quality.

• Other index movers

The other big movers were Nestle India, Housing Development Finance Corp, Larsen & Toubro, Mahindra & Mahindra, and Reliance Industries.

Nestle India was indeed among the favourites in the FMCG pack for investors. Shares of the Maggi noodles maker rose nearly 3% to settle at Rs 20,875.05. The stock hit a lifetime high of Rs 21,050 earlier in trade.

Despite not-so-exciting earnings, shares of RIL joined the party on D-Street and rose more than 1% during the trade. However, it ended off highs with just 0.3% gains.

• Global markets

Firm trends in European markets added to the bullish sentiment in domestic equities. Former chancellor Rishi Sunak being announced as the next Prime Minister of the United Kingdom (UK) drove sentiment higher in the European continent. Benchmark indices in Europe rose 1-2%.

US markets, too, opened in the green, extending gains from the previous session. Dow Jones Industrial Average notched over 1% gain.

• Crude oil

Global crude oil prices dipped after data showed that China's oil imports fell in September. China's crude oil imports in September were down 2% on year, according to reports. A fall in crude oil prices is positive for India, as it is a net importer of the commodity. Lower crude oil prices will reduce the trade deficit and also aid the local currency.

More to come...