Sensex Opens Higher; Bharti Airtel & Tata Motors Surge Over 4%

Wed, 13 Jan 09:30 am

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Asian share markets opened higher today as investors bet on economic recovery. The Nikkei is trading up by 0.6% while the Shanghai Composite is up 0.2%.

In US stock markets, Wall Street indices fluctuated not far from its record highs. The Dow Jones Industrial Average rose 0.2% and the Nasdaq Composite added 0.3%.

Back home, Indian share markets have opened on a positive note, following the trend on SGX Nifty.

Market participants are tracking Infosys share price and Wipro share price as these companies are slated to release their Q3 numbers today.

The BSE Sensex is trading up by 223 points. Meanwhile, the NSE Nifty is trading higher by 76 points.

The NSE Nifty reached another milestone yesterday. The index price-to-earnings (P/E) multiple reached an all-time high of 40x when it made an intra-day high of 14,590.65.

This is first time in 25 years that a benchmark index in India is trading at a P/E multiple of 40x or higher. The BSE Sensex had last traded at 40x or higher in October 1994.

Bharti Airtel is among the top gainers today. Bajaj Auto, on the other hand, is among the top losers today.

The BSE Mid Cap index has opened up by 0.4%. The BSE Small Cap index is trading up by 0.7%.

Barring consumer durable stocks, all sectoral indices are trading on a positive note with stocks in the metal sector and telecom sector witnessing most of the buying interest.

The rupee is trading at 73.15 against the US$.

Gold prices are trading up by 0.7% at Rs 49,376 per 10 grams.

After posting gains of over 25% in 2020, gold prices have suffered wild swings from the start of this year.

After hitting a high of Rs 51,800 per 10 grams last Tuesday, gold futures on MCX fell to Rs 48,635 yesterday.

Speaking of the precious yellow metal, in one of his videos, Vijay Bhambwani talks about why gold and silver prices crashed last week on Friday.

What does this event mean for the long-term trend in prices? Should traders change their bullish stance?

Vijay answers these questions in the below video. Tune in to find out more:

In news from the telecom sector, Bharti Airtel on Tuesday informed exchanges that it is initiating the process to revise its foreign investment limit, as notified to its depositories, to 100% with immediate effect.

"Further to our intimation dated January 21, 2020, we wish to inform you that in compliance of the FDI approval dated January 20, 2020 granted to the company by the Department of Telecommunications, the company has received approvals for its relevant downstream investments," it said in a statement.

Reports state that higher foreign investment limit can lead to an increase in Airtel's weight in the global indices, resulting in about US$ 600 - US$ 700 million of inflows.

Bharti Airtel share price has opened the day up by 4.7%.

In other news, Tata Communications is among the top buzzing stocks today.

Rakesh Jhunjhunwala bought shares of Tata Communications in the December quarter of FY21, data available with BSE showed.

Data showed that Rakesh Jhunjhunwala's wife Rekha Jhunjhunwala held 3.2 million shares or a 1.12% stake in Tata Communications at the end of Q3FY21.

In September 2019, Rekha Jhunjhunwala had bought 1.97 million shares, or 0.7% stake in the company, at Rs 370 apiece. Companies are mandated to post names of shareholders having over 1% stake in the company.

Rakesh Jhunjhunwala, who invests both, in his and his wife's name, holds stake in four other Tata Group firms, Tata Motors, Titan, Indian Hotel Company and Rallis India.

Besides Jhunjhunwala, foreign institutional investors (FIIs) and mutual funds (MFs) have increased stake in the firm during the October-December quarter. FIIs have raised the stake to 17.65% in the December quarter from 17.56% at the end of September quarter.

Meanwhile, MFs' holding in the company stood at 0.41% in Q3FY21 as against 0.38% in Q2FY21. Promoter holding remained unchanged at 74.99%.

Tata Communications share price has opened the day down by 2.1%.

Speaking of Tata Communications, have a look at the chart below to see how the stock has performed over the past few years:

Here's what Tanushree Banerjee wrote about it in one of the editions of the Profit Hunter:

• What is the reason for this euphoria about the stock?
  
  Well, Tata Communication finds itself among the hallowed group of companies that are called 'Stay at-home' businesses today.
  
  In the US, stocks like Microsoft, Amazon, Facebook, Apple, and Netflix find themselves in this camp.
  
  These business are uniquely positioned among the essentials in a post Covid-19 world.
  
  This is simply because millions will now choose to work, shop, study, and carry out most activities without leaving their homes.
  
  Telecom and digital businesses no doubt have taken centerstage. Therefore, even a stock like Tata Communications, with no track record of profits, is trading at premium valuations.
  
  But if you ask me, this is a classic case of euphoria. Bull markets are known to thrive in such euphoria about stocks following the latest fad.

In June 2020, Tanushree recommended a traditional Indian company to her StockSelect subscribers. The company is competing in the digital space with its latest offerings.

You can access the report here. (requires subscription).

And if you are not a StockSelect subscriber, here's where you can sign up.

Moving on to news from the financial markets, as per a leading financial daily, several pre-budget proposals for providing tax relief for Covid-19 treatment have come to the revenue department and these are being actively examined.

If the proposal is accepted, it may form a part of budget proposals for 2021-22.

The proposal is now being considered to include expenses made on Covid-19 treatment under the prescribed diseases category as per section 80DDB and therefore, qualify such expenditures for getting income tax deduction benefits.

How the above developments pan out remains to be seen. Meanwhile, we will keep you updated on the latest news from this space.

Speaking of the Budget, in his latest video for Fast Profits Daily, Vijay Bhambwani talks about the Union Budget 2021.

In the video, Vijay cover the sectors which would basically see the highest amount of expectation, buying and selling momentum.

Which stocks can you expect to move pre- and post-budget?

Tune in to the video to find out more:

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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