Sensex hit a lifetime high on Wednesday led by the optimism flow after India grabbed the 100th spot in the World Bank’s ease of doing business rankings. We take a look at four reasons why Sensex gained over 400 points.
The benchmark Sensex index of Asia’s oldest stock exchange BSE hit an all-time high on Wednesday led by the optimism flow after India grabbed the 100th spot in the World Bank’s ease of doing business rankings. Indian stock markets are on a continuous upsurge since the beginning of this year after a plunge observed when demonetisation came into effect. The broader index Nifty 50 of NSE also made a record high, jumped 112.55 points to 10,447.85 points while the 30-share barometer Sensex advanced as much as 426.13 points to mark the lifetime high of 33,639.26 points. We take a look at four reasons why Sensex gained over 400 points.
India breaks into top 100
For the first time ever, India achieved 1 the 0th place in the World Bank Ease of Doing Business rankings 2018. Narendra Modi’s dream of steering India into the best countries to do business took a giant stride forward on Tuesday with the nation vaulting 30 places straight into top 100 in the World Bank’s Ease of Doing Business ranking 2018. In the World Bank’s latest ‘Doing Business’ report, India ranked 100th for the first time, leapfrogging 30 places from the last year’s 130, firmly aided by implementation of reforms in as many as eight out of 10 fronts, including the crucial ones such as starting a business, paying taxes and resolving bankruptcy.
The World Bank’s Doing Business report assesses 190 economies on ten parameters — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Airtel hits decade high
Airtel shares hit a 10-year high on Wednesday after India’s largest telecom operator posted better-than-expected numbers for the quarter ended 30 September. The stock of Airtel was the biggest gainer on both Sensex and Nifty and advanced 9.41% to hit the record high of Rs 544.5 on BSE. As the Indian telecom sector is undergoing challenges triggered by the disruptive player Reliance Jio, the profitability of all of the existing telecom companies has been adversely affected.
Despite facing tariff wars and heightened pressure of retaining customers, Bharti Airtel’s fiscal second quarter financial results beat most analyst estimates even as its consolidated adjusted net profit plunged 77% and revenue fell 10.4% on-year on an underlying basis. A huge trading volume has been witnessed in the stock of Bharti Airtel as more than 2.25 crore shares exchanged hands on both BSE and NSE in just three hours of trading activity till 12:25 pm.
Value buying in blue-chips
Shares of ICICI Bank (up 4.77%), State Bank of India (up 3.96%), Axis Bank (up 2.76%), Tata Motors (up 2.32%), HDFC (up 2.06%), ITC (up 1.63%), Reliance Industries (up 1.14%), Hindustan Unilever (up 1.29%), Tata Steel (up 1.4%) were among the biggest gainers today on Sensex. The stocks of heavyweight companies such as ICICI Bank, HDFC, Airtel, State Bank of India, Reliance Industries, Axis Bank, HDFC Bank contributed heavily to the Sensex gains. Collectively these seven stocks alone added about 380 points to the Sensex out of 413 points upmove in the index.
PSU Bank recap optimism
Earlier last week in a major announcement, Finance Minister Arun Jaitley said that the cabinet has approved Rs 1.35 lakh crore for India’s ailing public banking system from recapitalisation bonds, of the total approved 2.11 lakh crore. Recap Bonds are used as payment for the shares bought by the government to ailing banks in a bid to raise their capitals. Earlier in the 90s, the then government had issued recap bonds to borrow from the banks without allowing fiscal deficit to expand. Following the announcement, PSU bank stocks including SBI and PNB surged up to 46% in a single day.