Key benchmark indices surged as investors risk appetite improved on anticipation that a rise in industrial production and a steady inflation could increase pressure on the central bank to reduce interest rates to boost economic activity. The barometer index, the S&P BSE Sensex, rose 250.47 points or 0.78% to 32,432.69, as per the provisional closing data. The Nifty 50 index rose 71.05 points or 0.70% to 10,167.45, as per the provisional closing data. Positive cues from the Asian market also boosted sentiment. Telecom stocks rallied after Bharti Airtel agreed to take over Tata group's consumer mobile business.
The Nifty hit its record high level, while the Sensex hit its highest intraday level in more than three weeks in mid-afternoon trade. The Sensex rose 326.37 points, or 1.01% at the day's high of 32,508.59 in mid-afternoon trade, its highest intraday level since 19 September 2017. The index rose 65.52 points, or 0.20% at the day's low of 32,247.74 in early trade. The Nifty rose 95.50 points, or 0.95% at the day's high of 10,191.90 in mid-afternoon trade, its record high level. The index rose 23.70 points, or 0.23% at the day's low of 10,120.10 in early trade.
Among secondary barometers, the BSE Mid-Cap index provisionally rose 0.04%. The BSE Small-Cap index provisionally rose 0.13%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, turned negative from positive in late trade. On BSE, 1,428 shares fell and 1,302 shares rose. A total of 128 shares were unchanged. Breadth was strong in morning trade.
The total turnover on BSE amounted to Rs 4233.42 crore, higher than turnover of Rs 3621.09 crore registered during the previous trading session.
Telecom stocks rallied after Bharti Airtel agreed to take over Tata group's consumer mobile business. Idea Cellular (up 5.84%), MTNL (up 0.75%) and Reliance Communications (up 4.94%) gained.
Bharti Airtel jumped 7.86%. Tata Teleservices (Maharashtra) (TTML) hit an upper circuit limit of 10%. Telecom major Bharti Airtel and Tata, India's leading conglomerate, announced after market hours yesterday, 12 October 2017, that they have entered into an understanding to merge consumer mobile businesses (CMB) of Tata Teleservices (TTSL) and TTML into Bharti Airtel. The acquisition is subject to requisite regulatory approvals. As part of the agreement, Bharti Airtel will absorb Tata CMB's operations across the country in nineteen circles (17 under TTSL and 2 under TTML). These circles represent bulk of India's population and customer base.
The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel's overall customer base and network. The merger is being done on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata's towards the DoT, which is to be paid on deferred basis. The employees of Tata will be demerged on the lines of the two businesses i.e. CMB and EFL (enterprise and fixed line and broadband), and post an optimal manpower planning will be moved accordingly. Tata will retain its stake in Viom, and will take care of the liabilities associated with it.
Separately, Bharti Airtel said that its board approved the scheme of amalgamation between Tikona Digital Networks and Bharti Airtel and their respective shareholders and creditors.
Shares of Bharti Infratel rose 4.03%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
IT major TCS rose 0.49% to Rs 2,561 after the company reported 8.4% rise in consolidated net profit to Rs 6446 crore on 3.2% rise in revenue to Rs 30541 crore in Q2 September 2017 over Q1 June 2017. The result was announced after market hours yesterday, 12 October 2017.
TCS' operating margin rose by 1.7% to 25.1% in Q2 September 2017 compared with Q1 June 2017. The company announced interim dividend of Rs 7 per share. TCS said that strong revenue growth was visible across verticals in the Q2 September 2017. With the exception of retail and CMI, all industry verticals grew above the company average, led by travel & hospitality (up 8% q-o-q), energy & utilities (up 7.2% q-o-q) and life sciences & healthcare (up 3.6% q-o-q). Growth was led by Europe (up 5.3% q-o-q), Latin America (up 5.7% q-o-q), APAC (up 3% q-o-q) and UK (up 2.5% q-o-q). North America grew by 1.4% q-o-q with continued softness in Banking and Retail, TCS said.
Commenting on the Q2 performance, Rajesh Gopinathan, CEO and MD, said that the company experienced robust volume growth in Q2, driven by good demand across multiple industry verticals. Large deal wins this quarter, a good pipeline, and bottoming out of the retail sector softness positions the company well, Rajesh Gopinathan said.
N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said that with the sectoral headwinds slowly abating, the company expects steadier and stronger growth ahead.
Nila Infrastructure gained 1.62% to Rs 18.80 after the company announced that it has received a contract to construct affordable housing worth Rs 107.28 crore. The announcement was made during market hours today, 13 October 2017.
On the macro front, India's industrial production grew 4.3% in August 2017 over August 2016, while showing sharp improvement in growth from 0.9% increase in July 2017. The manufacturing sectors production improved 3.1% in August 2017, snapping decline in output for last two straight months. The electricity generation increased at improved pace of 8.3% and mining output also gained 4.3% in August 2017. The growth for July 2017 has been revised downwards to 0.9% from 1.2% reported earlier. The data was unveiled after market hours yesterday, 12 October 2017.
The all-India general consumer price index (CPI) inflation was flat at 3.28% in September 2017 compared with 3.28% in August 2017, after rising for last two months from 1.5% in June 2017. The data was unveiled after market hours yesterday, 12 October 2017.
The Election Commission (EC) yesterday, 12 October 2017, announced elections in Himachal Pradesh, but held off on making an announcement for Gujarat. Voting for the 68-seat Himachal Pradesh assembly will take place on 9 November 2017 and the results will be declared on 18 December 2017. Gujarat polls, Chief Election Commissioner (CEC) A K Joti reportedly said, will be announced later, but he added voting will wind up before Himachal results are declared. While Gujarat Assembly's term ends on 22 January 2018, Himachal Pradesh's finishes on 7 January 2018. The EC normally holds elections together in states where the incumbent governments are completing their five-year term within six months. The poll dates for these states are announced simultaneously.
Overseas, most European shares were trading lower. Asian stocks ended higher. Investors were cautious ahead of US economic data as well as the Chinese Communist Party congress next week.
China attracted 70.63 billion yuan ($10.71 billion) worth of foreign direct investment in September, up 17.3% from a year earlier, the Ministry of Commerce said in a statement Friday.
China's exports grew 9% in September from a year earlier in yuan terms, following a 6.9% gain in August, official data showed Friday. Imports in September rose 19.5% in yuan terms from a year earlier, compared with a 14.4% rise in August, the General Administration of Customs said. The country's trade surplus last month narrowed to 193 billion yuan ($29.3 billion) from 286.49 billion yuan in August.
The US stock finished slightly lower on Thursday, even as Wall Street banks turned in generally upbeat results. The Dow Jones Industrial Average fell 0.14%. The S&P 500 shed 0.17%, while the Nasdaq Composite dropped 0.18%.
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