Modi talks up markets - Livemint

The Sensex ended higher by 1.1%, or 287.73 points, at 26,390.96 points, while the Nifty ended 1.06%, or 82.55 points, up at 7,874.25 points, record for both indices. Photo: Hemant Mishra/Mint

Mumbai: Benchmark equity indices S&P BSE Sensex of the BSE and the National Stock Exchange’s CNX Nifty closed at record highs on Monday, responding, after two holidays to Prime Minister Narendra Modi ’s Independence Day speech on Friday that made all the right noises about hot-button issues such as jobs, manufacturing, and skills development.

During his speech, Modi said India would focus on manufacturing (“Come, Make in India,” he told multinational companies), asked small and medium enterprises to make high-quality environment-friendly products and said the country would focus on skill development to create meaningful employment opportunities for millions of its young people.

Intra-day, the 30-share Sensex rose as much as 1.19%, or 309.88 points, to a record high of 26,413.11 points, while the 50-share Nifty rose as much as 1.14%, or 88.80 points, to a high of 7,880.50 points.

The Sensex ended higher by 1.1%, or 287.73 points, at 26,390.96 points, while the Nifty ended 1.06%, or 82.55 points, up at a record high at 7,874.25 points.

“Everyone is quite gung-ho about India. We already have $12 billion from FIIs (foreign institutional investors) and consensus seems to be expecting a total of $20-24 billion to pour in this year,” said Amar Ambani, head of research at IIFL.

Since the beginning of this year, the Sensex has gained 24.66%, while FIIs have bought $12.29 billion worth of shares.

“There is a rush for quality stocks and there is getting to be limited scope for picking some large cap stocks; the choices are spilling over to other stocks as well,” Ambani added. According to him, the Nifty could soon touch 8,000, after which there may be some consolidation.

“Earnings are 30-35% below normative levels, and the momentum is building. We may see 12-13% earnings growth for Sensex/Nifty in fiscal year 2015 and 16%-16.5% in fiscal year 2016,” Ambani said.

Among gainers, shares of Oil and Natural Gas Corp. Ltd (ONGC) rose 5.33% to Rs.431.80 each, Cipla Ltd was up 4.85% to Rs.469.75 each, and Axis Bank Ltd advanced 4.3% to Rs.393.90 each.

Among losers, shares of ITC Ltd fell 1.77% to Rs.350.45 each after The Times of India reported that the government is considering raising the minimum legal age for buying or using tobacco to 25 from 18 and also to increase penalties for smoking in public. Shares of Infosys Ltd shed 1.06% to Rs.3,565.65 each.

The S&P BSE Oil and Gas index was the top sectoral gainer, up 2.6%, followed by the S&P BSE Capital Goods and Bankex indices that rose 2.4% each. BSE’s consumer durables, auto, power, metals, realty and healthcare indices were up 1.7%, 1.6%, 1.5%, 1.47%, 1.4% and 1.3%, respectively.

Shares of oil and gas companies, including oil refineries, ended higher on the back of higher volumes. Hindustan Petroleum Corp. Ltd (HPCL) was up 6.4%, Bharat Petroleum Corp Ltd 5.8% (BPCL), Indian Oil Corp. Ltd 4.3%, Petronet LNG Ltd 4.5%, Oil India Ltd 2.8%, Reliance Industries Ltd 1.13%, and GAIL India Ltd 1.1%.

Tata Motors Ltd gained 4% to Rs.503.90 after it reported a 12.24% increase in its Jaguar Land Rover sales to 39,467 units in July, compared with 35,162 units in the same month last year.

Shares of Tata Power Co. Ltd rose 1.43% to Rs.92. The Maharashtra Electricity Regulatory Commission (MERC) has granted distribution licence to Tata Power for Mumbai area for 25 years, from 16 August 2014 to 15 August 2039.