India Sensex Tops 18,000 for First Time; World's Biggest Mover
India's Sensitive Index rose above 18,000 for the first time after buying from overseas funds added 1,000 points in only eight sessions. The billionaire Ambani brothers' companies including Reliance Industries Ltd. led gains.
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The tremendous amount of liquidity coming into the markets is why we are seeing sharp rallies,'' said Jayesh Shroff, who helps manage the equivalent of about $6.4 billion of assets at SBI Funds Management in Mumbai. ``Anyone who bought Reliance companies and power stocks would have made a killing.''
Reliance Industries, India's biggest company controlled by Mukesh Ambani, and younger brother Anil's Reliance Communications Ltd. and Reliance Energy Ltd. have contributed 40 percent of the index points in the eight-day rally.
The Sensex rose 788.85, or 4.5 percent, to a record 18,280.24, the biggest fluctuation among markets included in global benchmarks. The index jumped 1040.62 points from its day's low. It posted its biggest daily gain since June 15, 2006.
Stocks also rose after the government and the Communist parties met today to iron out differences over a nuclear energy accord with the U.S. and agreed to meet again on Oct. 22.
The S&P/CNX Nifty Index on the National Stock Exchange added 242.15, or 4.8 percent, to 5,327.25. Nifty futures for October delivery climbed 5.1 percent to 5,338.
Equity markets in seven other Asian countries also rose to records. The Morgan Stanley Capital International Asia-Pacific Index gained 0.5 percent to 166.69 as of 8:02 p.m. in Tokyo, surpassing the previous all-time high close of 166.41 on Oct. 3.
``Liquidity continued to trace momentum plays in Asia,'' Citigroup Inc. said in a note to clients today. China, Hong Kong and India, the three best-performing markets last month, remain major beneficiaries of record inflows to this region, the report said. Net cash inflows into these three markets added up to US$952 million last week, which is three times the amount put into other country funds, according to the report.
Money to Asian funds held at record levels for the second week. Net inflows in the week ended Oct. 3 totaled $2.9 billion, marginally lower than the $3 billion received in the prior week, Citigroup said in the note.
Reliance Energy, the nation's second-largest power producer, led the rally, climbing 48 percent in the eight trading sessions. The company won a 20 billion rupee ($506 million) order to build a power transmission line, CNBC-TV18 network reported, without saying where it got the information. Reliance Energy climbed 154.15 rupees, or 11 percent, to 1,533.65.
Reliance Industries, which runs the world's third-biggest refinery, gained 183.5 rupees, or 7.6 percent, to 2,600.45.
Companies controlled by Mukesh Ambani, India's richest man, and Anil were the five most active by value in India today.
Concerns that India may be forced to call early elections eased after the meeting between the ruling party and its Communist allies.
The Communists oppose the civilian nuclear accord with the U.S. because they think it would weaken the nation's ability to follow an independent foreign policy. If the Communists, whose support provides Prime Minister Manmohan Singh with a parliamentary majority, don't yield to the government's plan on the accord, the country may be forced to hold early elections.
Bharti Airtel Ltd. and Reliance Communications led phone- service providers higher after Citigroup Inc. lifted its price estimates on the stocks on expectations subscriber additions will boost earnings.
``Mobile-phone subscriber additions have been strong month on month. That will reflect in their earnings,'' said R.K. Gupta, who manages $75 million of stocks at Credit Capital Asset Management in New Delhi.
Bharti, the nation's largest mobile phone service provider, gained 55.5 rupees, or 5.6 percent, to 1,040.3. Reliance Communications, the second-biggest contributor to the Sensex's rally past 18,000, rose 64.95 rupees, or 10 percent, to 705.85. Idea Cellular Ltd., the mobile-phone operator controlled by billionaire Kumar Mangalam Birla, added 3.7 rupees, or 2.8 percent, to 135.5.
Citigroup raised its estimate on Bharti by 14 percent to 1,200 rupees a share and on Reliance Communications and Idea by 25 percent to 750 rupees and 11 percent to 155 rupees, respectively. The brokerage boosted its subscriber growth estimates for India by 4 percent to 437 million by the year ended March 31, 2010.
The following shares rose. Stock symbols are in brackets after company names:
Bharat Heavy Electricals Ltd. (BHEL IN) added 46 rupees, or 2.1 percent, to 2,236.75. India's biggest maker of power equipment won a 3.94 billion rupee order to build a power plant in the southern state of Andhra Pradesh.
ICICI Bank Ltd. (ICICIBC IN) gained 29.4 rupees, or 2.9 percent, to 1,045.75. India's most valuable lender rose after the company said the central bank approved a plan to expand the number of branches, the bank said in a statement.
ICICI has received permission to open 425 new branches and install more than 2,500 automated teller machines, or ATMs, the Economic Times reported, without saying where it got the information. The bank has 950 branches and about 2,500 ATMs now.
IVRCL Infrastructures & Projects Ltd. (IVRC IN) climbed 27.6 rupees, or 6.7 percent, to 440.25. The Indian builder had its stock price estimate raised by 20 percent to 524 rupees a share at UBS AG.
Tata Motors Ltd. (TTMT IN) rose 27.35 rupees, or 3.6 percent, to 791.75. India's biggest truck and bus maker raised prices of commercial vehicles by as much as 2.5 percent, Debasis Ray, a spokesman for Tata Motors, said in an e-mailed statement.
Tata Power Ltd. (TPWR IN) surged 77.45 rupees, or 8.6 percent, to 977.9. Citigroup raised the stock's rating to ``buy'' from ``hold'' and increased its price estimate by 66 percent to 1,078 rupees a share.
REF : India & Pakistan