Sensex, Nifty hit fresh record highs; Vodafone Idea climbs over 10% as Cabinet approves big bang reforms

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Benchmark equity indices BSE Sensex and NSE Nifty scaled their fresh record high in the early trade on Thursday amid the ongoing bull run on Dalal Street. The 30-share index Sensex traded 128 points or 0.22% up at 58,851 in the early trade, while the 50-share Nifty index was up nearly 45 points or 0.26% at 17564.25. Broader indices BSE Midcap and BSE Smallcap were also traded higher by over half a percent.

As many as 22 stocks in the Sensex pack were traded in the green. With a rally of 3.22%, IndusInd Bank was among the top gainers in the index. It was followed by ITC (up 2.15%), Tata Steel (up 0.81%), State Bank of India (up 0.60%), Kotak Mahindra Bank (up 0.60%) and Power Grid (up 0.59%). On the other hand, Tech Mahindra, TCS, NTPC, HDFC, Titan and Infosys were down between 0.30% and 0.65%.

VK Vijayakumar, chief investment strategist, Geojit Financial Services said, “The clear message from yesterday’s package for the telecom industry and PLI scheme for autos is that the government is on fast-forward mode as far as reforms are concerned. These reform initiatives justify the market’s confidence in India’s potential growth and earnings outperformance.”

Meanwhile, shares of Vodafone Idea jumped over 13% after the Union Cabinet on Wednesday approved a big-bang relief package for the stressed telecom sector that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100% foreign investment through the automatic route. However, Bharti Airtel was down 0.25% at 723.75.

Among the sectoral indices on BSE, the FMCG index was up 1.42%. Telecom, Consumer Discretionary, Auto, Bankex, Basic Materials, Metal, Industrials and Consumer Durables were up between 0.25% and 1.20%. On the other hand, the BSE IT, Oil & Gas, Utilities and Power indices were down over 0.10%.

“The bold reforms in India’s two crucial sectors have the potential to add to India’s GDP growth in the coming years. The timing of the PLI scheme for autos has to be seen in the context of investment leaving China due to a regulatory crackdown. India is firmly on the road to becoming part of the global supply chains for the auto industry. The exuberance in the market is partly justified by the bold reform initiatives. The overconfidence of the bulls, however, emanates from the lack of any moves on the horizon that will sharply reduce liquidity in the market,” Vijayakumar said.