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Indian stocks rise on boost from Reliance

Staff Report/Dubai
Filed on June 19, 2020
Shares of Reliance Industries Ltd rose 0.85 per cent in early trade to a record high after the company said it had become net debt free. - Reuters

The NSE Nifty 50 index rose 0.58 per cent to 10,146.75 by 0349 GMT, while the benchmark S&P BSE Sensex was up 0.51per cent at 34,387.71.

India's main indexes rose on Friday, riding on gains in Reliance shares after the oil-to-telecoms conglomerate said it had become net-debt free, taking some focus away from rising coronavirus infections and border tensions with China.

The NSE Nifty 50 index rose 0.89 per cent to 10,180.95 by 0617 GMT, while the benchmark S&P BSE Sensex was up 0.82 per cent at 34,490.85. Both indexes were on track to finish the week higher.

Shares of Reliance Industries Ltd rose as much as 2 per cent to a record high on the company's announcement of being net debt free after raising over 1.69 trillion rupees ($22.15 billion) over the last few weeks via stake sales in its digital arm and a rights issue.

However, there are widespread concerns about India's economic growth, which is already languishing at multi-year lows and faces further challenges from rising Covid-19 cases at home and abroad.

As of Friday, Covid-19 cases in India were over 380,500 and deaths were well past 12,500.

"In case, hopes of a V-shaped recovery in earnings growth in the second half of fiscal year 2020-21 does not materialize, the market can face a steep correction," said Ajay Bodke, chief executive officer and chief portfolio manager (PMS) at Prabhudas Lilladher in Mumbai.

"Caution is being thrown to the winds with market ignoring heightened geopolitical risks and being wildly optimistic about a sharp bounce back," Bodke added.

Tensions between Indian and China have grown following deadly clashes between the two sides over a contested border.

Financial stocks rose with the Nifty PSU Bank Index , which tracks state-owned lenders, adding 2.5 per cent, while the Nifty Private Bank Index rose 1.6 per cent.

India's small-cap and mid-cap shares rose over 1 per cent each.

The Nifty realty index, which tracks real estate firms, jumped 4.02 per cent with shares of Godrej Properties Ltd advancing over 4.5 per cent.

Meanwhile, broader Asian shares were choppy, with MSCI's broadest index of Asia-Pacific shares outside Japan easing 0.06per cent as worries over spike in Covid-19 cases dampened expectations of a speedy economic recovery.

As of Thursday, Covid-19 cases in India had neared 367,000 and deaths were over 12,200.

Indian shares closed higher on Thursday, rising sharply in afternoon trade after Beijing said a fresh coronavirus outbreak was under control. The positive news helped markets overlook rising cases back home as well as border tensions with China. The NSE Nifty 50 index ended 2.13 per cent higher at 10,091.65 and the benchmark S&P BSE Sensex closed up 2.09 per cent at 34,208.05.

The Nifty PSE index, which tracks state-owned firms, surged nearly 3 per cent after the news and closed up 2.32 per cent.

In Mumbai trading, the Nifty banking index and the financial index jumped nearly 4 per cent each. Shares of oil-to-telecom conglomerate Reliance Industries Ltd settled 2.51 per cent higher, a record close.

Meanwhile, Indian rupee has erased early losses and trading at day's high at 76.21 per US dollar to quote at Dh20.76, amid volatile trade seen in the domestic equity market. Domestic unit opened 14 paise lower at 76.28 per dollar against previous close of 76.14.
- With inputs from Reuters, business@khaleejtimes.com

 


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