Sensex rises to all-time high; rupee ends lower

Indian shares rose to a fresh record, paced by a rally in telecom shares, after a debt-restructuring plan boosted embattled carrier Reliance Communications.The benchmark S&P BSE Sensex advanced 0.2% to an all-time high of 34,010.61 at the close in Mumbai. The NSE Nifty 50 Index climbed 0.4% to 10,531.50, also a record. Bharti Airtel – the nation’s top wireless carrier – rallied 2.7%, the steepest among Sensex and Nifty companies.Bharti’s smaller rival Reliance Communications said it planned to cut its total debt to Rs60bn from Rs450bn in the next three months by selling several assets including airwaves and land. The shares surged 32%, helping fuel the S&P BSE Telecom Index’s 2.3% rally, the most among the 13 sector gauges compiled by BSE. A price war in the sector has hurt profits and is pushing smaller players out of business, improving the prospects for larger companies going forward.“Telecom stocks rose on optimism that Reliance Communications is in advanced stages of signing definitive agreements for asset sale to existing competitors,” said Nilesh Rai, founder of Blue Sapphire Consultants in Mumbai.India’s markets re-opened yesterday after a three-day weekend. Trading volumes on the Nifty 50 were about 15% lower than the 30-day average as activity slowed in the final week of 2017 with the holiday season continuing into the New Year.In dollar terms, the Sensex and Nifty are neck and neck with South Korea’s Kospi and Kosdaq indexes as the best performers this year among major Asian equity gauges. Overseas and local investors have bought a record $25bn of Indian equities so far in 2017.“Markets are likely to remain range-bound with a positive bias on expectations that the result season will continue to show improvement in company earnings and the federal budget will focus on rural economy, jobs and infrastructure development,” said Vaibhav Sanghavi, co-chief executive officer at Mumbai-based Avendus Capital Alternate Strategies.Indian companies will start reporting their earnings for the October to December quarter next month and the government is expected to announce its federal budget in February. It will be the last budget for a full financial year, which runs April to March, as the nation will vote for a national government in 2019. Meanwhile the rupee yesterday closed marginally lower against US dollar in a thinly traded market as many dealers were on leave for the year end.The home currency closed at 64.08 a dollar, down 0.05% from its Friday’s close of 64.05. The currency opened at 64.03 and touched a high and a low of 64.02 and 64.12 respectively. On Monday, markets were closed due to Christmas. The 10-year bond yield ended at 7.275%, compared to its previous close of 7.271%. Bond yields and prices move in opposite directions.So far this year, the rupee has gained 6%, while foreign institutional investors have bought $7.71bn and $22.83bn in equity and debt, respectively.Asian currencies were trading mixed. South Korean won was up 0.29%, China offshore 0.08% and Taiwan dollar rose 0.06%. However, China renminbi was down 0.19%, Indonesian rupiah 0.13% and Thai baht fell 0.1%.