Telecom shares surge on tariff hike plan, lift Sensex
BENGALURU: Indian shares ended higher on Tuesday, led by gains in banking stocks, while shares of telecom companies surged on the back of announcement by the country’s two major mobile network service providers that they planned to hike tariffs.
The NSE Nifty 50 index ended 0.47%, or 55.60 points, at 11,940, while t he S& P BSE Sensex closed 0.46%, or 185.51 points, higher at 40,509.96.
The Nifty public sector bank index gained 3.9%, while the Nifty energy index rose 1.5%.
“The hope for bank investors is that many cases stuck in the insolvency and bankruptcy code may be sorted out now, taking Essar Steel verdict as precedent,” said Amit Kumar Gupta, portfolio manager at Adroit Financial Services Pvt Ltd.
The Supreme Court of India on Friday cleared the path for steelmaker Arcelormittal SA to take over bankrupt Essar Steel, and the judgment comes as a big reprieve for banks which are struggling with bad loans worth $140 billion.
Shares of Bharti Airtel ended up 7.37% and were one of the top gainers in Nifty 50, with the stock hitting its highest since January 24, 2018. Yes Bank shares fell 2.51% to end as the top loser.
Meanwhile, Vodafone Idea shares rose as much as 43.82% during the session.
On Monday, Airtel and Vodaf o ne I d e a s a i d t hey would increase mobile tariffs from December, after posting record, multi-billion-dollar quarterly losses.
“The increase in tariffs will help the telecom industry players service huge debt on their balance sheets. This would have a positive impact on the banking sector which fuelled a sharp rall y i n PSU ( public sector undertaking) banks,” Sunil Sharma, chief investment officer, Sanctum Wealth Management.
Meanwhile, Reliance Industries Ltd led the gains, rallying nearly 4% to its lifetime high of ₹1,514.95 (intraday) on BSE. It became the first Indian company to hit the ₹9.5 lakh crore market capitalisation level.
“Domestic indices ended higher on the back of buying seen in the PSU bank, infra and energy stocks. Telecom stocks also edged higher after talks of raising tariffs from December onwards while energy stocks were lifted by a sharp fall in crude oil prices,” Paras Bothra, president of equity research, Ashika Stock Broking, said.
Market breadth was negative as 1,399 stocks declined against 1,149 stocks that ended in green on BSE.
Asian markets mostly gained on expectations of China and the US reaching a mini trade deal even as some reports suggested that Beijing was concerned about the chances of an agreement.
European equities were trading on a positive note in their respective early deals.
Meanwhile, the Indian rupee gained 13 paise to close at 71.71 as crude oil prices receded. Brent crude futures, the global oil benchmark, fell 0.83% to $61.92 per barrel.