The legend of Mukesh and Anil Ambani assumed larger proportions, as entities promoted by them set a blistering pace in the markets.
Sensex makes biggest single-day gain, Mukesh and Anil’s companies add Rs35,000 crore in paper wealth
MUMBAI: The legend of Mukesh and Anil Ambani assumed larger proportions on Wednesday, as entities promoted by them set a blistering pace in the markets. The brothers may have parted company, but the combined surge in the value of their companies contributed almost 20% to the entire wealth created in the market on Wednesday.
The Ambani companies added Rs35,041 crore to investors’ paper wealth, also fuelling the Sensex to breakneck speeds. The index registered its highest ever single-day gain of 893 points, ending at 19,929 points. That’s about 300 points shy of its all-time intra-day high of 20,238 points, registered on October 30, 2007.
“While there is very little known on companies such as Reliance Industrial Infrastructure and Reliance Natural Resources, we are comfortable with the valuations of Reliance Industries, Reliance Petroleum (both Mukesh-promoted), Reliance Energy and Reliance Communications (Anil-promoted),” said Jignesh Desai, head of institutional sales at SBICAP Securities.
While the combined market cap may be reflective of the clout the brothers individually enjoy in the market, Anil was not a patch on Mukesh on Wednesday. The elder Ambani’s companies’ value rose by Rs26,469 crore, almost thrice as fast as did Anil’s companies.
On the broader market, Desai says that both insurance companies and domestic mutual funds that had been waiting for some stability in the global markets sensed it on Wednesday and poured funds into the market.
“Everybody wants to buy, and everyone waits for a drop and then some stability,” said Desai.
“International markets were extremely favourable today, which was a major setup for our markets. There’s a lot of local momentum/short-term money that found its way into the markets,” added Ambareesh Baliga, vice-president, Karvy Stock Broking.
Short-covering in the latter part of the day also aided the market surge. This means that when the markets rose those who had previously taken a negative call were compelled to take an opposing buy call to nullify their negative call, thus helping the markets further on its way up.
“18,000-21,500 is what I project by the end of December,” said Desai of SBICAP Securities.
Baliga, meanwhile, says it’s difficult to predict anything beyond tomorrow. “This is a market where everyone gets swayed by the way the markets move. There are investors who’ve turned traders,” he said.
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