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Sensex, Nifty continue to rally; Coal India, Wipro weak


The News International Team

11:55 am Fiscal consolidatiion: Minister of state for finance Jayant Sinha said the government is pursuing a prudent fiscal consolidation roadmap and the rate cut will provide near-term boost to the economy. Echoing the words and sentiment of RBI governor Raghuram Rajan, Sinha too said further rate cut will depend on future data. The goal of the Budget, according to him, is to get the economy to non-inflationary growth. He said the market has moved from a hope rally to a conviction rally. He further stated, this move will come as a huge relief to most as it should bring down loan EMIs significantly and there is room for further easing of rates.

11:30 am Houseview: Telecom stocks are in focus as spectrum auction of 2G and 3G, which may see some aggressive bidding, begins today. One of the biggest aution 2G and 3G airwaves is touted to fetch over Rs 82,000 crore to the government’s coffer.

A total of 380.75 MHz of spectrum in three bands – the premium 900 MHz band, 1,800 MHz and 800 MHz — is put on sale besides 5 MHz in the 2,100 MHz band across 17 out of 22 telecom areas in the country. Licences for Idea Cellular’s 9 circles, 6 circles of Airtel and 7 circles each of Vodafone and Reliance Telecom are coming up for renewal.

IIFL has a buy rating on both Bharti Airtel and Idea Cellular. The brokerage has set a target price of Rs 450 per share, indicating an upside of 26 percent while it thinks Idea may jump 28 percent. IIFL has a target of Rs 195 on Idea.

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The RBI’s surprise rate cut of 25 basis points (bps) powers the Bulls with the Sensex scaling 30000. The Sensex is up 264.44 points or 0.9 percent at 29858.17 and the Nifty gains 62.55 points or 0.7 percent at 9058.80. About 1398 shares have advanced, 906 shares declined, and 165 shares are unchanged.

Rate sensitive banks, auto and real estate stocks lead the way. Sun Pharma, ICICI Bank, Bharti Airtel, HDFC and Tata Motors are top gainers in the Sensex. Among the losers are Coal India, Hindalco, GAIL, Tata Power and Wipro.

Meanwhile, activity in India’s services industry expanded at its fastest pace in eight months in February as improving domestic demand drove a surge in new orders. Increased activity at service firms, which make up over half the economy, is good news for policymakers – especially after last week’s first annual budget from Prime Minister Narendra Modi’s government failed to deliver big-bang reforms.

The HSBC Services Purchasing Managers’ Index, which surveys around 350 private companies and is compiled by Markit, rose to 53.9 in February from 52.4, its highest since June 2014. A reading above 50 indicates growth.

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