BackSensex, Nifty rise for third straight session
Coal-related stocks surge on reforms; Bharti Airtel gains after rival Idea's profit beat; Financial Tech slumps after govt orders merger with unit
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Mumbai: Indian shares rose for a third straight session on Tuesday to mark their highest close in 1-1/2 weeks as coal-related stocks such as Jindal Steel and Power surged on the government’s plans to auction coal blocks the top court cancelled in August.
India promised on Monday to open up the coal industry to private players and moved closer to selling a stake in a state-run oil company, as Prime Minister Narendra Modi picked up the pace on economic reform days after relaxing fuel price controls.
Modi-led BJP’s wins in two state elections also strengthens its position in India’s upper house, which is key to pushing through reforms such as foreign direct investments in insurance.
“We are bullish on the market for the next one year, largely due to the reforms initiated by the government and due to falling inflation," said Dipen Shah, head of private client group research at Kotak Securities. “The valuations should improve in the coming few months."
The benchmark BSE index rose 0.55%, or 145.80 points, to end at 26,575.65. The broader NSE index rose 0.61%, or 48.35 points, to end at 7,927.75, closing above the psychologically important 7,900 level. Both the indexes marked their highest close since 9 October.
Coal-related stocks, including miners and power sector lenders, led the gainers. Jindal Steel and Power surged 7.3%, while Hindalco Industries Ltd ended up 1%. Power Finance Corp gained 5.2%, while Rural Electrification Corp rose 4%.
Adani group stocks were also seen benefiting from coal reforms as India allowed state-run companies to retain captive coal mines. The Adani group has contracts to develop and operate some mines with state-run firms. Adani Enterprises gained 2.6%, while Adani Power rose 3%.
Metal stocks got a boost after China’s economy grew 7.3% in July-September, slightly above expectations. Tata Steel gained 1.2%.
Blue-chips also rose on hopes the reform measures would support recovery in Asia’s third-largest economy and bring in more foreign flows.
ICICI Bank rose 2.9%. Bharti Airtel rose 2.2% after rival Idea Cellular’s earnings beat estimates. Bharti and Airtel both operate on GSM technology and have similar kinds of subscribers. Idea shares ended flat at Rs161.45 a piece.
Among the losers for the day, Financial Technologies (India) Ltd slumped 20% to its daily limit after the government ordered the company to merge with unit National Spot Exchange Ltd, under investigation in a fraud case. Reuters
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