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Sensex extends record run after EC nod for bank licences
April 2, 2014 / 4:27 AM / in 4 years

Sensex extends record run after EC nod for bank licences

MUMBAI (Reuters) - The BSE Sensex touched a new high for the eighth straight session on Wednesday and non-bank financial companies such as IDFC Ltd (IDFC.NS) surged after the election commission allowed the Reserve Bank of India (RBI) to announce new bank licences.

A road sign stands next to the Bombay Stock Exchange building (R), August 3, 2005. REUTERS/Arko Datta/Files

Heavy foreign buying continued to underpin the recent rally with overseas investors buying Indian shares worth 3.85 billion rupees on Tuesday after a totalling $3.3 billion in March.

Blue chips also tracked higher global shares on Wednesday as investors focused on the good news in a mixed bag of international economic data.

U.S. jobs data due on Friday and India’s general elections, beginning this month, are widely expected to drive shares in the near term.

Investors see India’s main opposition Bharatiya Janata Party, perceived more business-friendly, holding higher chances of coming to power.

“Practically positions can be kept but strategically they should be shifted or pared after such a strong rally,” Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance, said.

The Sensex rose as much as 0.65 percent to an all-time high of 22,592.10, while Nifty gained 0.63 percent to a record high of 6,763.50.

The Sensex and the Nifty ended up 0.47 percent each.

Potential bank licence candidates led the gainers: IDFC Ltd surged 3.8 percent and LIC Housing Finance (LICH.NS) rose 4.7 percent.

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India’s election commission on Tuesday allowed the Reserve Bank of India to announce new bank licences even ahead of general elections.

The central bank had sought the commission’s approval to ensure the process would not clash with the code of conduct, which prevents decisions that may be deemed as political from being taken by government officials or regulators.

Among blue chip stocks, Reliance Industries Ltd (RELI.NS) and Larsen & Toubro Ltd (LART.NS) rose 1.7 percent each after earlier marking their 52-week high at 962 rupees and 1,310 rupees respectively.

    Bharti Airtel Ltd (BRTI.NS) gained 3.3 percent after CLSA said the wireless services provider “is best placed to ride the data boom in India.”

    CLSA cited Bharti’s 72 percent mobile market share would allow it to benefit most from a jump in mobile data subscribers.

    Motherson Sumi Systems Ltd (MOSS.NS) ended up 3.8 percent after earlier rising as much as 8.1 percent to a record 275.85 rupees.

    Bank of America-Merrill Lynch has raised its target price on the auto parts maker to 311 rupees from 248 rupees while maintaining its “buy” rating.

    Midcap pharmaceutical stocks surged as investors were attracted by valuations after under performing recently versus larger rivals.

    Wockhardt Ltd (WCKH.NS) surged 20 percent to its daily limit, Ranbaxy Laboratories Ltd (RANB.NS) jumped 9 percent, Strides Arcolab STAR.NS gained 10 percent, while Aurobindo Pharma Ltd (ARBN.NS) 4.6 percent.

    However among stocks that fell, Hindalco Industries Ltd (HALC.NS) ended lower 1.6 percent adding to Tuesday’s fall of 2.5 percent on profit taking after rising 8.3 percent on Monday.

    Editing by Joyjeet Das

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