India's stock markets extended gains on Oct 13, with the benchmark NSE Nifty50 index, hitting a new high, as a surprisingly steady inflation data and strong industrial production numbers, boosted investor sentiments.
Strong gains in stocks like Bharti Airtel, which jumped over 7 per cent on the acquisition of consumer mobile business of Tata Teleservices, also added to the gains.
For the day, the BSE Sensex was up by 250 points or 0.8 per cent to close at 32,432.69 points. The NSE Nifty50, breached the previous record high of 10,153.10 and settled at 10,167.45 points, up 71 points or 0.7 per cent.
For the week, both the Sensex and Nifty rose about 1.9 per cent.
On Oct 12, official data showed, consumer price inflation remained steady at 3.28 per cent in September from the previous month, while index of industrial production (IIP) rose 4.3 per cent, versus economists' expectation of 2.4 per cent.
“Industrial activity shrugged off the weakness of past few months and put up a strong performance in August, suggesting that GST-related disruptions could have somewhat settled,” said ratings agency CRISIL.
It noted that the improvement was broad-based and suggests that the sharp upturn may be indicative of restocking before the festive season.
The latest surge in Indian equity markets can also be seen against the backdrop of a euphoria across global markets, which rose for a fourth straight day. London's FTSE and German DAX had closed at record highs on Oct 13. Earlier in the week, Japan's Nikkei stock average had hit a 21-year high and the NYSE Dow Jones index too scaled a new peak.
“We are following the (rally in) American, European and other Asian markets...The corporate results globally are going to be better, the minutes of the last Federal Reserve 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,” said VK Sharma, head of private client group at HDFC Securities.
Bharti Airtel was the biggest gainer on the Sensex on Oct 13, the stock rose almost 8 per cent as investors gave a thumbs up to the acquisition of Tata Teleservices' consumer mobile business, which it will get on a cash-free and a debt-free basis.
“This is another value-accretive transaction for Bharti Airtel, as it potentially adds Rs 5,000 crore in annual revenue (with high incremental margins) and 71 MHz of aggregate liberalised spectrum, at a fairly low acquisition cost,” said Sanjay Chawla, an analyst at broking firm JM Financial.
Rival Idea Cellular also surged 6 per cent, after it said its shareholders had approved the proposed merger with Vodafone.
Among other gainers, Tata Steel hit a fresh 52-week high and closed up near 3 per cent. Banking stocks like Kotak Mahindra Bank, HDFC Bank, ICICI Bank and Axis Bank rose 1 to 2 per cent and tech stocks also rose after Tata Consultancy Services, India's largest software services exporter, reported slightly better than expected quarterly earnings.
Looking ahead in the near-term, investors will continue to monitor corporate earnings. Axis Bank, Wipro, Bajaj Auto, Ultratech Cement are among the major results expected next week.