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Demand for a robust IT infrastructure and medicines ensures the positive phenomenon. Reliance secures another big cheque to keep the markets on their toes with the broader market keeping pace with frontline stocks.
The share markets on Thursday rallied with all the vigour they could muster to wipe off all the losses of this calendar and its year-to-date return finally bringing matters to the green. The Peer Nifty too was also on track to achieve the same feat. According to reports, the surge in Sensex's fortunes was largely thanks to a rally in pharma and IT stocks, which turned out to be the biggest beneficiaries of the pandemic, as demand for a robust IT infrastructure and medicines rose.
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The same script played itself out on Friday when Indian stocks boosted by shares of Reliance Industries, after it secured more funding for its retail business, ensured that the indexes were on track for their best weekly performance in five months. The NSE Nifty 50 index and the S&P BSE Sensex were up 0.6% each at 12,189 and 41,595.7, respectively. The indexes have gained for five straight sessions and were set to post their best weekly gain since early-June.
For the record, Reliance secured a $1.3-billion investment in its retail business from Saudi Arabia′s wealth fund on Thursday, sending its shares 2.3% higher on Friday. The oil-to-telecoms conglomerate′s retail unit, Reliance Retail Ventures Ltd, has already secured more than $3 billion in funding from various investors.
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On Thursday the BSE Sensex climbed over 650 points to hit the day's high of 41,289. Its broader peer Nifty rose 180 points to 12,086. The 50-share index was less than 1 per cent away from giving positive returns for the year.
Both indices were set to kiss their all-time high levels. Sensex's all-time high was 42,273, hit on January 20 this year, while the same for Nifty is 12,430.
The indices had dropped to their multi-year lows in March, but support from global central banks and governments and recovery in economic activity have triggered a brilliant multi-month rally. Year to date, Nifty Pharma has been the biggest sectoral gainer, up 44.47 per cent. Nifty IT has followed with 36.74 per cent gain. PSU stocks have been the biggest losers this year, with Nifty CPSE Index down over 30 per cent.
According to Reuters, the broader market has moved in tandem with frontline stocks. Nifty Midcap Index has already turned green for the year, while Nifty Smallcap is just quarter of a per cent away. State Bank of India recorded strong earnings with metal and energy stocks adding to the gains.
SBI had earlier reported an upbeat September-quarter profit and said it expected stronger annual credit growth, sending its shares 5.6% higher and lifting the Nifty banking index by 2.1%.
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The banking index rose for a fourth straight session, extending a rally that started after private-sector lender ICICI Bank reported a higher profit last week.
"Banking results and the management commentary has been quite encouraging," said Naveen Kulkarni, chief investment officer at Axis Securities Ltd. "Banks are also more willing to lend since the macro situation has improved. Their challenges seem to be manageable now."
The Nifty metals index also rose 4.4%. Tata Steel gained 5.1% and miner Hindalco climbed 6%. Refiner Hindustan Petroleum Corp rose 9.9% after it reported on Wednesday a quarterly profit that beat estimates. HPCL′s rival Bharat Petroleum Corp gained 5.3%, helping the Nifty energy index rise 2.7%, while natural gas explorer GAIL (India) was up 5%.
Broader Asian markets were higher as investors awaited a clear result from the US election, with MSCI′s broadest index of Asia-Pacific shares outside Japan climbing 2% to its highest since February 2018.
Perhaps, the phenomenon that is playing itself out is a precursor to bigger and better developments. Indian prime minister Narendra Modi is pulling out all the stops to create a positive business environment for the country.
The government is committed to the lowering of tax rates, tax incentives to manufacturers, along with ease of doing business, while following a path of fiscal prudence. Image from archives:
India planned to offer new opportunities to global investors as the government sells its stake in state run companies and monetises their assets while confining its role to a few strategic sectors. As the prime minister stated, "We will do whatever it takes to make India the engine of global growth resurgence,” citing recent reforms across sectors aimed at easing restrictions on investors.
During April-August, foreign direct investment inflows rose 13% from a year ago to $35.7 billion, the highest ever for the first five months of a financial year.