Sensex surges 236 points on Moody's ratings upgrade

BL Internet Desk Chennai | Updated on January 09, 2018 Published on November 17, 2017

Realty, metal stocks steal the show

The Sensex surged over 230 points as international rating agency Moody’s has upgraded India’s sovereign bond rating to Baa2 from Baa3 with a stable outlook and also noted continued progress on economic and institutional reform will enhance India's high growth potential.

It also raised India's long-term foreign-currency bond ceiling to Baa1 from Baa2, and the long-term foreign-currency bank deposit ceiling to Baa2 from Baa3.

Positive global cues also buoyed the domestic sentiment.

The 30-share Sensex soared to the day’s high of 33,520.82, but profit-taking activity towards the end in heavyweights made the index settle at 33,342.80, up 235.98 points, or 0.71 per cent. The gauge had rallied 346 points in the previous session.

The 50-share Nifty after racing past the key 10,300-mark during the day gave up some ground to close up 68.85 points, or 0.67 per cent, at 10,283.60.

For the week, the Sensex climbed 28.24 points, or 0.08 per cent, while the Nifty shed 38.15 points, or 0.36 per cent.

Barring IT and TECk, all other BSE sectoral indices ended in the positive zone. Among them, realty index was the star-performer and was up 3.7 per cent, followed by metal 1.8 per cent, consumer durables 1.47 per cent and banking 1.17 per cent. On the other hand, IT index was down 1.38 per cent and TECk 1.1 per cent.

Top five Sensex gainers were Cipla (+2.64%), HDFC (+2.23%), Maruti (+2.15%), Tata Steel (+2.14%) and Tata Motors (+1.92%), while the major losers were Infosys (-1.79%), TCS (-1.33%), ONGC (-1.03%), Wipro (-0.97%) and Asian Paints (-0.76%).

“The long overdue sovereign rating upgrade for India is an endorsement of institutional and structural transformations ushered in by the government in the last few years while maintaining fiscal prudence,” Rana Kapoor, Managing Director and Chief Executive of YES Bank said in an email.

“Such global ratifications will lower the cost of borrowing and boost investor confidence and conviction in the economy.”

“Moody's rating upgrade is certainly positive for the markets and the rupee. In terms of bonds, market borrowing will remain a concern, along with crude oil prices and the U.S. rate hike worries,” said Sunil Sharma, Chief Investment Officer of Sanctum Wealth Management.

“I think it is up to the government now to respond with a fiscal plan that makes sense.”

Financials accounted for more than half the gains on the NSE index, with the Nifty finance index climbing 2 per cent and the Nifty PSU Bank index up 2.4 per cent.

IT stocks, however, fell as the rupee firmed, with the Nifty IT index down 0.9 per cent. A stronger rupee hurts returns from the US market, the biggest source of revenue for Indian IT companies.

Asian shares rose on Friday as strong US earnings and a step forward in the US Congress on tax reform brightened the mood, even though investors noted that many more hurdles must be passed to reach a final deal on tax cuts.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent while Japan's Nikkei gained 0.9 per cent, extending its recovery from a near three-week intraday low hit the previous day.

Wall Street's main indexes rose sharply on Thursday, boosted by strong gains in Wal-Mart and Cisco following their earnings. The S&P 500 advanced 0.82 per cent to turn positive for the week, a day after hitting a three-week low, while the Nasdaq Composite added 1.3 per cent to a closing record high of 6,793.29.

(With inputs from Agencies)

Published on November 17, 2017

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