Reliance Comm pushes Sensex up by 74 points

Recovering from early losses, the Bombay Stock Exchange benchmark (BSE) Sensex today ended 74 points up at a six-week high on fag-end buying by funds in bluechips, particularly Reliance Communications (RComm) and Sterlite Industries.

Rising for the fifth straight day, the 30-share barometer of the Bombay Stock Exchange ended higher by 74.66 points, or 0.43%, at 17,412.83.

The bellwether opened on a weak note and remained in the negative zone during the first half of trade, after sentiment across the globe was dampened on renewed concerns over the eurozone debt crisis after Moody's lowered Greece's credit rating.

It hit a low of 17,249.46, after European stocks opened in the red.

However, the sentiment turned positive on Dalal Street after US futures opened positive and Europe dramatically swung into the green. Late buying at the lower level in the final hours also lifted markets, helping the Sensex to end near the
day's high of 17,442.50.

Encouraging advance tax numbers from India Inc also helped the market offset the downgrade of Greece by Moody's, brokers said.

The 50-share Nifty Index of the National Stock Exchange also settled 0.47% higher at 5,222.35 points.

"Indian markets are moving in line with the global peers, but there are enough triggers at the domestic front, which has lifted investor sentiment," Anand Rathi Financial Services vice-president (research—retail) DD Sharma said.

Extending gains for another day, Anil Ambani-led Reliance Communications rose 4.2% to Rs186.6 after the telecom major said it is restructuring its unit, Reliance Infratel, by demerging its tower assets into a new entity. The scrip had gained 3.71% in previous trade. RCom was the top gainer in the Sensex components today.

Concerns over accounting policies, high net debt (Rs280 billion) and fiercely competitive Indian telecom markets has been a big overhang on the stock for the past 15 months.

However, according to reports, RComm can get as much as Rs150 billion in cash and partial ownership in the new entity
post demerger. "The cash raised would help in retiring debt, which is positive for RCOM shareholders," brokerage  Prabhudas Lilladhar said in a note.

Reliance Infrastructure, another ADAG firm, also rose and settled higher by 2%.

Metal stocks were shining today, with Sterlite Industries climbing 3.41%, Tata Steel 1.42%, Hindalco 1% and Jindal Steel 1.30%. Meanwhile, the nation's most valued private firm Reliance Industries, which has been on gaining streak since its entry into the telecom space, continued the rise for another session and ended 0.17% higher at Rs1,065.20.

In the BSE sectoral indices, realty, PSU, FMCG and metals were the top gainers, whereas oil & gas, IT and auto were the top losers.

Marketmen said that PSU counters were in demand today as the government cleared the divestment proposals of mining companies Coal India and Hindustan Copper. The step pushes the government's agenda to raise Rs 40,000 crore this fiscal
through a stake sale in PSUs. The BSE's PSU Index rose 147.19 points to 9,265.66.

DLF advanced nearly 3%, ITC 1.94% and HUL 1.92%. L&T was higher by 1.22%.

In the BSE-30 pack, 21 stocks ended with gains, while the remaining 9 closed in the red.

After a recent rally, auto stocks saw profit taking. All leading auto stocks, barring Hero Honda, ended in the red. Maruti lost 0.89%, Tata Motors 0.03% and M&M 0.80%. Hero Honda rose 0.82%.

Most of the IT stocks, which were high yesterday, dropped today. TCS lost 1.92% and Infosys 0.41%.
Wipro, however, ended with a 1.09% gain.

ONGC sank 2.55% and was the biggest loser on the Sensex.

On the global front, all the Asian bourses ended in the green and Europe was also trading in positive zone at mid-session.