Key benchmark indices firmed up further and hit fresh intraday high in afternoon trade led by telecom major Bharti Airtel and bank stocks. At 13:25 IST, the barometer index, the S&P BSE Sensex, was up 262.97 points or 0.82% at 32,445.19. The Nifty 50 index was up 78.75 points or 0.78% at 10,175.15. Telecom stocks rallied after Bharti Airtel agreed to take over Tata group's consumer mobile business.
Investors risk appetite improved on anticipation that a rise in industrial production and a steady inflation could increase pressure on the central bank to reduce interest rates to boost economic activity. Positive cues from the Asian market also boosted sentiment.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,444 shares rose and 1,130 shares fell. A total of 126 shares were unchanged. Breadth was strong in morning trade.
Telecom stocks rallied after Bharti Airtel agreed to take over Tata group's consumer mobile business. Idea Cellular (up 5.84%), MTNL (up 0.75%) and Reliance Communications (up 4.32%) gained.
Bharti Airtel jumped 7.54%. Tata Teleservices (Maharashtra) (TTML) hit an upper circuit limit of 10%. Telecom major Bharti Airtel and Tata, India's leading conglomerate, announced after market hours yesterday, 12 October 2017, that they have entered into an understanding to merge consumer mobile businesses (CMB) of Tata Teleservices (TTSL) and TTML into Bharti Airtel. The acquisition is subject to requisite regulatory approvals. As part of the agreement, Bharti Airtel will absorb Tata CMB's operations across the country in nineteen circles (17 under TTSL and 2 under TTML). These circles represent bulk of India's population and customer base.
The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel's overall customer base and network. The merger is being done on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata's towards the DoT, which is to be paid on deferred basis. The employees of Tata will be demerged on the lines of the two businesses i.e. CMB and EFL (enterprise and fixed line and broadband), and post an optimal manpower planning will be moved accordingly. Tata will retain its stake in Viom, and will take care of the liabilities associated with it.
Separately, Bharti Airtel said that its board approved the scheme of amalgamation between Tikona Digital Networks and Bharti Airtel and their respective shareholders and creditors.
Shares of Bharti Infratel rose 3.78%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Cement shares saw mixed trend. ACC (up 1.15%) and UltraTech Cement (up 1.83%) rose. Ambuja Cements (down 0.07%) and Shree Cement (down 0.45%) fell.
Grasim Industries was off 0.46%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
BASF India gained 1.84% after the company said that BASF SE, Germany signed an agreement to acquire significant parts of Bayer's seed and non-selective herbicide businesses. The announcement was made during market hours today, 13 October 2017.
BASF India said that it has received information from its parent company, BASF SE, Germany that it has signed an agreement to acquire significant parts of Bayer's seed and non-selective herbicide businesses which are being divested by Bayer in the context of its planned acquisition of Monsanto. The all-cash purchase price by BASF SE is EUR5.9 billion, subject to certain adjustments at closing. The transaction is subject to the closing of Bayer's acquisition of Monsanto and approval by relevant authorities. The transaction is expected to close in the first quarter of 2018.
On the macro front, India's industrial production grew 4.3% in August 2017 over August 2016, while showing sharp improvement in growth from 0.9% increase in July 2017. The manufacturing sectors production improved 3.1% in August 2017, snapping decline in output for last two straight months. The electricity generation increased at improved pace of 8.3% and mining output also gained 4.3% in August 2017. The growth for July 2017 has been revised downwards to 0.9% from 1.2% reported earlier. The data was unveiled after market hours yesterday, 12 October 2017.
The all-India general consumer price index (CPI) inflation was flat at 3.28% in September 2017 compared with 3.28% in August 2017, after rising for last two months from 1.5% in June 2017. The data was unveiled after market hours yesterday, 12 October 2017.
The Election Commission (EC) yesterday, 12 October 2017, announced elections in Himachal Pradesh, but held off on making an announcement for Gujarat. Voting for the 68-seat Himachal Pradesh assembly will take place on 9 November 2017 and the results will be declared on 18 December 2017. Gujarat polls, Chief Election Commissioner (CEC) A K Joti reportedly said, will be announced later, but he added voting will wind up before Himachal results are declared. While Gujarat Assembly's term ends on 22 January 2018, Himachal Pradesh's finishes on 7 January 2018. The EC normally holds elections together in states where the incumbent governments are completing their five-year term within six months. The poll dates for these states are announced simultaneously.
Overseas, European shares rose in early trade helped by some well-received earnings updates and gains in Bayer after BASF agreed to buy significant parts of Bayer's seed and non-selective herbicide businesses for 5.9 billion euros in cash. Asian stocks were trading higher. Investors were cautious ahead of US and Chinese economic data as well as the Chinese Communist Party congress next week.
The US stock finished slightly lower on Thursday, even as Wall Street banks turned in generally upbeat results. The Dow Jones Industrial Average fell 0.14%. The S&P 500 shed 0.17%, while the Nasdaq Composite dropped 0.18%.
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