Indian markets close strong

Mon, 1 Sep Closing

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Extending the strong rally in afternoon trade, the Indian benchmark indices closed today on a positive note. The broader markets have consistently outperformed benchmarks during the day.

Except FMCG, all the other sectoral indices have closed on a firm note with stocks from the metal and capital goods space closing the day on a thumping note. Both the BSE Mid Cap and the BSE Small Cap indices gathered steam and were up by 1.6% and 1.3% respectively. The BSE Sensex closed higher by 229 points. The NSE-Nifty too was seen up by 73 points.

On the global front, the Asian indices closed the day on a mixed note. The European indices have mostly opened in red. The rupee was trading at Rs 60.47 to the dollar at the time of writing.

Except Bank of Maharashtra, all the other PSU bank stocks have closed the day in green today. Andhra Bank and Oriental Bank of Commerce have led the rally reporting robust gains today. A leading financial daily has reported that the state-run United Bank of India turns out to be the first bank to declare debt-ridden Kingfisher Airlines and its promoter Vijay Mallya as willful defaulters. This implies that the entity and its authorities would not be able to borrow from the bank in future. The Untied bank's exposure to Kingfisher Airlines was around Rs 3.5 bn as part of consortium led by State Bank of India. Subsequently, other lenders namely; State Bank of India, IDBI Bank and Punjab National Bank are also expected to follow suit. The consortium of 17 banks has an outstanding debt of about Rs 40.22 bn. Banks in February last year had decided to sell a portion of the collateral with them, including shares of its group companies United Spirits Ltd and Mangalore Chemicals & Fertilizers Ltd, Mallya's Goa villa, Kingfisher House in Mumbai and the Kingfisher brand as part of the recovery process.

Except AGC Networks, all the Telecom stocks today have closed on an optimistic note. The strong rally was lead by ADC India Comm and Himachal Futuristic that topped the pack of gainers today. As per a leading financial daily, Bharti Infratel is said to be eyeing the acquisition of Vodafone and Idea towers in India. Reports state that the telecom tower infrastructures provider is in initial talks with both the companies for part or complete buyout while exploring various fundraising options. For the deal to go through, Bharti Infratel would require to raise capital to the tune of Rs 50 bn. The current cash flows of the company stands above Rs 20 bn. The company aims to scale up in terms of number of towers. While the deal completion date stands as November, the process may get delayed due to high valuations.