Indian share markets scaled fresh peaks today as investor sentiment was upbeat after the country gave emergency use approvals to two coronavirus vaccines over the weekend.

The government gave emergency use approvals to two coronavirus vaccines, produced by AstraZeneca and Bharat Biotech.

Apart from the above, positive GST data collections, improving manufacturing PMI and impressive auto sales in December led to a growth of optimism among investors.

At the closing bell, the BSE Sensex stood higher by 308 points (up 0.6%). The Sensex rose above the 48,000 marks for the first time today.

Meanwhile, the NSE Nifty closed higher by 114 points (up 0.8%). The Nifty also ended above the 14,100-mark for the first time, at 14,133 levels.

ONGC and TCS were among the top gainers today.

The SGX Nifty was trading at 14,180, up by 134 points, at the time of writing.

Both, the BSE Mid Cap index and the BSE Small Cap index ended up by 1.4%.

Midcap stocks were in focus today with the BSE Midcap index hitting a record high on the back of a strong rally in metals, financials, and public sector undertaking (PSU) stocks.

Barring banking stocks, all sectoral indices ended in the green. Gains were largely seen in the metal sector, auto sector, and IT sector.

IT stocks witnessed buying interest today with the Nifty IT index hitting a fresh record high, as the sector kick starts its October-December quarter (Q3FY21) earnings from the current week.

TCS is scheduled to announce its Q3FY21 results on Friday, January 8, 2021. The board will also consider the declaration of a third interim dividend to the equity shareholders.

Asian share markets ended higher today. As of the most recent closing prices, the Hang Seng ended up by 0.94% and the Shanghai Composite stood higher by 0.86%. The Nikkei ended down by 0.7%.

US stock futures are trading higher today indicating a positive opening for Wall Street indices. Nasdaq Futures are trading up by 68 points (up 0.5%), while Dow Futures are trading up by 168 points (up 0.6%).

The rupee is trading at 73.01 against the US$.

The domestic currency jumped today, tracking broader weakness in the greenback and higher domestic equity markets. The rupee rose to a four-month high of 72.84 against the US dollar as compared to the previous close of 73.12.

Gold prices for the latest contract on MCX are trading up by 1.8% at Rs 51,126 per 10 grams.

In news from the economic space, manufacturing sector activities showed a marginal improvement in December compared to the previous month even as employment generation remained low, showed the widely-tracked IHS Markit purchasing managers' index (PMI) survey.

PMI inched up to 56.4 in December compared to 56.3 in November. However, it remained lower than 58.9 in October and 56.8 in September, the two months during which the economy saw a gradual lifting of lockdowns.

Manufacturing, in the Index of Industrial Production (IIP), rose by 3.5% in October, according to the latest figures. However, it might come down going forward in line with PMI results, warned Pollyanna De Lima, Economics Associate Director at IHS Markit.

International demand for Indian goods rose in December, but evidence indicated that growth was hampered by the Covid-19 pandemic. As a result, new export orders increased at the slowest pace in the current four-month sequence of expansion.

Input cost inflation accelerated to a 26-month high in December.

We will keep you updated on the latest developments in this space. Stay tuned.

In news from the banking sector, the Comptroller and Auditor General of India (CAG) has written to the finance ministry seeking details about the ongoing performance audit of the government's massive recapitalization exercise of public sector banks (PSBs).

CAG is doing a performance audit on the recapitalization of PSBs after 2016-17 and it has written a letter to the Department of Financial Services, Ministry of Finance, seeking various information, including the rationale for the distribution of capital among different PSBs.

The Government of India made capital infusion to the tune of Rs 900 billion in 2017-18. This rose to Rs 1.06 lakh crore in the following year. During the last financial year, the capital infusion through bonds was Rs 700 billion.

For the current fiscal, the government has earmarked Rs 200 billion for the capital infusion into the PSBs. Of this, the government allocated Rs 55 billion to Punjab & Sind Bank in November 2020 for meeting the regulatory requirement prescribed under the Basel III guidelines.

Reports state that the audit may be going to analyze the impact of capital infusion in PSBs and how it has been able to improve the financial parameters such as Return on Assets (ROA), Return on Equity (ROE), and rate of growth of advances.

In its last report released in July 2017, CAG had pointed out some shortcomings in the distribution of capital to various banks. It had also raised doubts over the possibility of PSU banks raising about Rs 1 lakh crore from the market by 2019.

The Centre infused Rs 1,187.2 billion in PSBs during 2008-09 to 2016-17. Of this, SBI received the maximum capital infusion of Rs 269.5 billion.

IDBI Bank, Central Bank of India, Indian Overseas Bank, and Bank of India were also significant beneficiaries.

Speaking of the banking sector, note that the sector was one of the worst affected sectors in the Indian stock market when Covid-19 struck.

Banking stocks were severely punished. No investor wanted to touch them even with a 10-ft pole.

However, sentiment have changed now as investors are chasing banking stocks like never before.

Have a look at the monthly returns of major sectors for the month of March and October 2020 in the chart below:

Banks were among major losers with a cut of 34% in the month of March. Cut to October, they were the biggest gainers for the month with more than 11% returns!

If you're interested in knowing what could be the reason behind such a change in sentiment, you can read about it in one of the editions of Profit Hunter: Banks are booming in a Covid World.

Moving on to stock-specific news...

L&T and Tata Motors were among the top buzzing stocks today.

The Income Tax Department today carried out a limited verification exercise at the office premises of the Zee Group and L&T to verify their bogus inputs about the tax credit.

A senior IT official said, "there are no searches or raids, but we are carrying out limited verification exercise at the offices of the Larsen and Toubro and Zee group as we had information that they had claimed the bogus input tax credit."

The official said that it is basically a follow-up exercise and there is limited action on both the groups.

The official refused to share the details of the offices where the verification process is being carried out.

Meanwhile, shares of Tata Motors rose 4% to hit an over 11-month high of Rs 193 in early trade today after the company reported a 21% increase in total vehicle sales in the domestic market to 53,430 units in December.

The stock was trading close to its 52-week high of Rs 201.80 touched on January 15, 2020.

Tata Motors' commercial vehicle (CV) domestic sales in the October-December quarter (Q3FY21) stood at 82,155 units, up 48% against the previous quarter, the company said in an exchange filing, post-market hours on Friday.

M&HCVs and ILCVs led the recovery, growing by 10% and 7%, respectively over Q3FY20 with higher demand in infrastructure, including road construction, mining, and e-commerce segments.

Passenger vehicle (PV) business posted a growth of 89% as compared to Q3FY20, its highest ever sales in the last 33 quarters.

This was significantly higher compared to its other listed peers. Maruti Suzuki's PV grew 14% in December, whereas M&M's passenger vehicle grew 3% during the same period.

Tata Motors' share price ended the day up by 2.4%.