Sensex vaults 216 points as RIL rallies over 3.5%

RIL touched a fresh nine-year high of Rs 1,307.05, up 4% in intra-day trade

Benchmark indices held on to their intra-day gains and ended the first day of the new trading week higher, with the S&P BSE Sensex and the Nifty50 indices surging around 0.8% each to 29,048 and 8,963 levels, respectively. In the broader market, the BSE Midcap and BSE Smallcap indices, too, gained 0.6% and 0.4%, respectively.

"Markets are showing strength ahead of the important events but we suggest traders limiting leveraged positions, considering hurdle at 9,000 in the Nifty. However, move on sectoral front was in line with expectation so far and we feel auto and private banks will remain comparatively stable. Risky traders can still bet on select midcap and smallcap counters but do maintain caution on stock selection," adds Jayant Manglik, President, Retail Distribution, Religare Securities.

Reliance Industries (RIL), Tata Motors, Adani Ports, NTPC, SBI and Bharti Airtel were among the top gainers on S&P BSE Sensex that rallied 1.6% - 3.7%. On the other hand, TCS, Sun Pharma, Dr Reddy's and HUL were the top losers.

"Domestic market rallied despite a strong hint of a possible March rate hike by US Fed and setback for IT sector due to temporary suspension of H1B visa. The current buoyancy in the market is led by positive cues like GST, state elections and FII inflows," said Vinod Nair, head of research at Geojit Financial Services.
 

Rally in RIL

RIL touched a fresh nine-year high of Rs 1,307.05, up 4% in intra-day deals, as investors remained bullish on its telecom prospects. Shares of the company have risen 15% since its telecom arm, Reliance Jio, said it would start charging for its services in April.

"After years of consolidation and underperformance, the stock of Reliance is regaining lost ground on account of several positive developments. Firstly, its multi-year investment phase is complete. Secondly, we see inflection points in its refining segment with boost from petcoke gasification, petchem business thrust from off-gas cracker commencement and ethane imports replacing high cost propane, leaner cost structure and digital focus in retailing and telecom EBIDTA break-even by FY19. That apart, it is likely to generate positive free cashflow in FY19. Based on these factors, we see further upsides to Reliance’s market valuation," said Amar Ambani, Head of Research, IIFL in a note.

Among the other prominent gainers was Dredging Corporation of India that surged 16% to Rs 519, also its 52-week high on the BSE in intra-day trade after reports suggested that the government may sell a majority stake in state-owned shipping company.

NEW INDEX

Asia Index Private Limited, a joint venture between S&P Dow Jones Indices and BSE Ltd, launched the S&P BSE SENSEX Next 50 Index on Monday. The Index is designed to measure the performance of the 50 largest and most liquid companies within the S&P BSE Large-and Mid-Cap Index and not under the ambit of the S&P BSE SENSEX 50 Index.

Alka Banerjee, CEO, Asia Index Private Limited, said, “The S&P BSE SENSEX Next 50 Index is an extension of the S&P BSE SENSEX 50 Index. Given the ever increasing demand from institutional and retail investors, we have launched this objective, rule-based and transparent index that is suitable to underlie ETFs or Index Funds.”

According to a note, the index includes the 50 largest companies after the constituents of S&P BSE SENSEX 50 index. Constituents of index are weighted by float adjusted market capitalisation and will undergo periodic review semi-annually.

GLOBAL MARKETS

US stock futures dropped but Asian shares were resilient on Monday as investors weighed the near-certain prospect of an interest rate hike in the United States this month against news of China's slower 2017 growth target.

Risk appetites also took a hit on rising geopolitical tensions in East Asia, as North Korea fired four ballistic missiles early in the day, while a spat between China and South Korea over missile defense deepened.

US President Donald Trump's accusation that his predecessor, Barack Obama, wiretapped him also cast a shadow on US stocks as some investors view his confrontational style as distracting him from his economic agenda.

Japan's Nikkei dropped 0.5% for the day. European shares are expected to follow suit, with spread-betters looking to a fall of 0.3-0.4% in Germany's DAX and Britain's FTSE.

But MSCI's broadest dollar-denominated index of Asia-Pacific shares outside Japan was up 0.4%, with most markets in positive territory. South Korean shares also erased earlier losses to post small gains.



(with Reuters inputs)