Nifty at record closing high ahead of Diwali, Sensex rallies 250 pts but Midcap flat

The Nifty 50 ended at fresh record closing high on Friday as investors cheered macro data, earnings and telcos deals. The rally was driven by banks, telecom and metals stocks, and Reliance Industries. But the broader markets underperformed benchmarks, ending flat.

The 50-share NSE Nifty rose 71.10 points or 0.70 percent to 10,167.50, after hitting a fresh record high of 10,191.90 intraday.

The 30-share BSE Sensex rallied 250.47 points or 0.78 percent to 32,432.69 despite weak market breadth. The index is still 254 points away from its record high of 32,686.48 hit on August 2. About 1,428 shares declined against 1,297 advancing shares on the BSE.

“The corporate results globally are going to be better, the minutes of the last Fed meeting were also dovish. With domestic investors dipping their toes in the equity markets at an accelerated pace, the process of making new highs in the markets is likely to continue beyond the immediate highs,” V K Sharma, Head – PCG & Capital Market Strategy, HDFC securities said.

With the festive mood in the air, markets are likely to do well in the October month, which has historically been the weakest, according to him,

Jayant Manglik, President, Retail Distribution, Religare Securities said he expects the Nifty to touch 10300 in near future.

For the week, the Nifty and Sensex rallied 1.9 percent each, continuing upmove for the second consecutive week.

Telecom stocks hogged the limelight today. Bharti Airtel soared 7.9 percent after signing a deal to buy consumer telecom business of Tata Sons. Tata Teleservices Maharashtra share price was locked at 10 percent upper circuit for second consecutive session.

Idea Cellular gained 6 percent as its shareholders approved the merger with Vodafone India. Bharti Infratel rallied for fourth consecutive session today, up 4 percent.

Reliance Industries was up 0.5 percent ahead of July-September quarter earnings due later today. TCS was up 0.3 percent after better-than-expected earnings for the quarter ended September 2017.

Banks stocks ended sharply higher, with the Nifty Bank rising 328 points on hopes of further rate cut, and likely early resolution to non-performing assets related to telecom sector after major telecom deals – Bharti Airtel-Tata Teleservices. Even Idea Cellular-Vodafone India merger is also likely to happen by March 2018.

Better macro data also lifted sentiment. Kotak Mahindra Bank, HDFC Bank, ICICI Bank, Axis Bank and Yes Bank gained 1-2 percent while SBI was up 0.3 percent.

Meanwhile, industrial production grew to a 9-month high of 4.3 percent in August while retail inflation fell to 3.28 percent in September, unchanged from August.

All sectoral indices barring FMCG and Pharma ended higher. Tata Steel, Coal India, Asian Paints and Tata Motors gained 1-3 percent while GAIL, M&M and Dr Reddy’s Labs fell 1-2 percent.

In broader space, Karnataka Bank was up 6.7 percent after second quarter earnings. Profit fell 24.7 percent YoY due to higher provisions, but non-performing assets fell on sequential basis.

PVR and Inox Leisure gained 3 percent after Tamil Nadu cut entertainment tax to 8 percent.

Sobha, Vijaya Bank, South Indian Bank, DCB Bank, Radico Khaitan, Reliance Communications, Uttam Galva and Jaiprakash Associates up 1-9 percent while Edelweiss Financial, Bombay Dyeing and Reliance Capital were down 1-2 percent.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.