The stock markets shrugged off the earlier impact of grim gross domestic product (GDP) data and rallied after the Supreme Court gave telecom companies time to pay their pending AGR dues.
Stock markets rose on Tuesday, after declining in the previous trading session with benchmark Nifty rising 82.75 points or 0.73% to close at 11,470.25. The benchmark, Sensex, also rose by 272.51 points or 0.71% to close at 38,900.8. The stock markets shrugged off the earlier impact of grim gross domestic product (GDP) data and rallied after the Supreme Court gave telecom companies time to pay their pending AGR dues. Additionally, positive global cues also supported the markets.
The markets witnessed a choppy trading session on Tuesday after they started with a gap-up opening that was sold into. Thereafter, the markets kept trading flat and saw a sharp upward move after the Supreme Court pronounced its AGR ruling, where it gave telecom companies 10 years to pay AGR dues. This was a much-needed breather for listed telecom companies such as Bharti Airtel, which saw its stock price rally by 7.11% to close at Rs 549.6 apiece. Reliance Industries, too, was up 0.51% to close at Rs 2091.4 apiece. The shares of Vodafone Idea were down by 13.73% to close at Rs 8.8 apiece.
Deepak Jasani, head- retail research, HDFC Securities, said, “The Supreme Court ordered telecom companies to pay their pending statutory dues worth thousands of crores over 10 years, in a relief to the sector yet to recover from the tariff war. Amid few macro and judicial developments, Indian markets managed to post a rise, despite the apprehensions about impact on volumes due to the new margining system coming into force from September 1. More clarity about the impact will be seen over the next few days, when there are fewer developments to track and discount.”
Meanwhile, ICICI Securities, in an analyst note, said there was potential for markets to shift into bubble territory. “Bullish environment driven by global liquidity and flows will continue and has the potential to swing markets from extreme bearishness in March 2020 into bubble territory as momentum in stocks could spread to broader markets hinging on the hope of an economic revival in the second half of fiscal year 2021,” said the brokerage.
Stock markets, globally, were rallying, with Asian markets in Hong Kong, China, Taiwan, and South Korea ending higher by 0.03% to 1.01%. European markets in France and Germany were also up by 0.3% and 0.75%, respectively. The United Kingdom’s FTSE 100 was down by 1.17%. At the time of press, Dow Jones Mini futures were up by 10 points. The global equities were rallying on encouraging economic data from China and European countries, indicating that the economies around the world were recovering.
The futures and options segment on the NSE witnessed a turnover worth Rs 19.98 lakh crore against the six-month average of Rs 15.43 lakh crore. The cash market segment also witnessed a turnover worth Rs 62,006.63 crore against Rs 53,128 crore. Foreign portfolio investors (FPIs) on Monday pulled out $446.7 million in total from Indian equities whereas, domestic institutional investors bought stocks worth $89.5 million.
The biggest gainers on Nifty were Bharti Airtel, JSW Steel, Hindalco, Asian Paints, and Bajaj Finance, which were up 7.11%, 6.41%, 5.26%, 4.3%, and 4.28%, respectively. The biggest losers on Nifty were Bharti Infratel, ONGC, Axis Bank, Adani Ports and SEZ, as well as Infosys, down by 5.11%, 2.9%, 1.72%, 1.64%, and 1.37%, respectively.