Sensex rallies over 570 points; all eyes on earnings
MUMBAI: Benchmark equity index Sensex rallied more than 570 points on Thursday to its highest close in three weeks, joining the party in world equities as trade tensions receded, and risk appetite returned.
Investors also cheered the status quo by the Reserve Bank of India (RBI) at its policy review, and as it lowered its April-september inflation projection.
BSE’S 30-share Sensex closed 1.75% or 577.73 points higher at 33,596.80 points, while National Stock Exchange’s 50-share Nifty climbed 1.94% or 196.75 points to close at 10,325.15 points. It was the highest close for Sensex and Nifty since March 15.
Market breadth was positive, as more than three shares advanced for every share that declined on the BSE.
Financials led the gains for Sensex stocks with private lenders ICICI Bank Ltd and HDFC Bank Ltd contributing the most to the index’s gains. They advanced 3.52% and 1.21% respectively.
Foreign institutional investors or FIIS have invested a net of $2 billion in Indian shares so far this year, while domestic institu- tional investors or DIIS pumped in a net of ₹25,645.44 crore in the asset class.
“The cheer in world markets was the key reason for the rally we saw today. As trade war fears came off, investors heaved a sigh of relief,” said Amar Ambani - partner and head of research, IIFL Wealth Management Ltd.
The US and China hinted they were willing to negotiate on rising tensions, helping to ease fears among investors that retaliatory actions could derail the strongest global expansion in years.
“RBI kept rates stable, in line with market expectations. The good part was that RBI lowered inflation target, and this helped the market sentiment,” added Ambani.
Five of the six RBI MPC (Monetary Policy Committee) members voted to keep repo rate - the rate at which the central bank infuses liquidity into the banking system - unchanged at 6%.
Inflation projection for the first half of fiscal 2019 has been slashed to 4.4-4.7% from 5.1-5.6% and second half to 4.4% from 4.5-4.6% projected earlier. The RBI also said that GDP for fiscal 2019 is projected at 7.4% with risks evenly balanced.
“The status quo on rates and stance is in line with expecta- tions, but the downward revision to inflation forecasts is a positive surprise and suggests no imminent policy tightening,” Nomura economists said in a note.
“For now, the RBI remains in wait-and-see mode,” Nomura added. The next focus is on March quarter earnings to be out over the month, and a lot would depend if they register a significant recovery.
“The current correction has come after months of unprecedented rally. It is a routine correction,” said Anand Shah, deputy CEO and head of investments at BNP Paribas Asset Management India Pvt. Ltd.
“It is difficult to predict the course of the market for the current quarter. We expect earnings to pick up significantly in the March quarter, and if that does happen, it will drive the specific sectors and stocks higher,” he added. MUMBAI: Apax Partners Llp has acquired Bengaluru-based medical devices company Healthium Medtech Pvt. Ltd (formerly known as Sutures India).
The London-based private equity (PE) fund has acquired close to 100% stake from existing shareholders, including TPG Growth, CX Partners, and founding shareholders.
Though the size of the deal was not disclosed, the transaction is in range of $350 million, said a person aware of the development. TPG Growth owns around 73% in Healthium, while private equity fund CX Partners holds 12%. The rest is held by the promoters.
reported in November that several PE funds, including Bain Capital Lp, Advent International Corp. and Carlyle Group are in a race to acquire surgical equipment maker Sutures India in a deal worth about $425 million.
Healthium, which makes surgical and wound-closure products such as natural and synthetic, absorbable and non-absorbable sutures, surgical needles, staples, tapes and bone wax, competes with firms such as Smith and Nephew Plc, Ethicon Inc. and Convatec.
TPG Growth i nvested i n Sutures in 2013 by acquiring a 23% stake from CX Partners and the firm’s promoters for ₹145 crore. Over time, TPG raised its stake and now holds a majority in Sutures.
CX Partners had acquired a 37% stake in Sutures for about ₹200 crore in 2012 by buying out the entire stake held by India Life Sciences Fund.
Founded in 1992, Sutures exports products to 91 countries in Europe, South America, Africa and Asia.
It also supplies to over 10,000 hospitals across India.
Backed by Apax, Healthium plans to further deepen its presence in the Indian market and broaden its portfolio of specialty medtech products, said the company statement.
“Healthcare is a key focus area for Apax in India, given secular tailwinds around healthcare spend and government initiatives focused on affordable and universal healthcare,” said Shashank Singh, partner at Apax Partners and head of Apax’s India office.
“The opportunity is to create a medtech platform of scale to deliver a broad portfolio of products in the Indian market, and we are excited to partner with the management team of Healthium to deliver this vision,” he added.
The investment in Healthium marks the second investment in the healthcare space by Apax in India, following the investment in Apollo Hospitals.