June 19, 2017 9:47 pm JST

Lenders lead India's benchmark index to fresh record highs

MUMBAI (NewsRise) -- India shares rose to new lifetime highs on Monday, helped by gains in lenders amid optimism about the central bank's efforts to tackle a mounting bad debt situation at home.

The benchmark BSE Sensex advanced 0.8%, or 255.17 points, to 31,311.57, while the broader NSE Nifty 50 ended up 0.7%, or 69.50 points, at 9,657.55. Both indexes posted their largest single session gain since May 26.

"RBI's insistence that the banks start bankruptcy proceedings will improve their asset quality and strengthen balance sheets," said Vinod Nair, Head of Research at Geojit Financial Services. "The relaxation in return filing timeline to minimize the impact of transition to GST also buoyed sentiment today."

New Delhi on Sunday said it will let companies file late returns for two months after the new Goods and Service Tax regime takes effect. India's long-awaited nationwide GST will be implemented on July 1 and will require firms to file three online returns every month.'

Twenty-one of the 30 constituents of the Sensex ended higher, while declining issues edged past advancing ones 1,468 to 1,197 and 194 stocks were unchanged.

Financial stocks, with the heaviest weighted sector on the benchmark index, led gains on Monday. The BSE Bankex rose 1%, also closing at a record high, after media reports cited sources as saying the Reserve Bank of India has directed banks to begin bankruptcy proceedings against 12 large loan defaulters.

Private lenders HDFC Bank and ICICI Bank rose 1.3% each, while Axis Bank ended 1.9% higher at 519.90 rupees. State Bank of India, the country's biggest state-run lender, added 0.9% to 288.50 rupees.

Meanwhile, Lanco Infratech, which is among the 12 defaulters flagged by the RBI, fell 20% to a record low. The company confirmed over the weekend that its lead lender, IDBI Bank, had been instructed to initiate insolvency proceedings under the Insolvency and Bankruptcy Code.

Bhushan Steel and Amtek Auto, also reportedly among the defaulters identified by the central bank, shed at least 16.2% each.

Hotels-to-tobacco conglomerate ITC rose1.4% to 310.45 rupees. Investors cheered the GST council's decision to impose a 28% tax on rooms with a tariff above 7,500 rupees against the earlier proposed 5,000 rupees. Royal Orchid Hotels also rose by 10.1%.

Tata Steel surged 3.4% to 519.30 rupees. Holding company Tata Sons said it will buy the steelmaker's stake in Tata Motors on or after June 23. The holding company will buy about 83.6 million Tata Motors shares held by Tata Steel at the prevailing stock price on the data of the deal. Tata Motors slipped 0.7%.

Adani Ports and Special Economic Zone advanced 3.1% to 373.70 rupees after global ratings agency Moody's Investors Service revised its outlook on the stock to stable from negative.

Bajaj Auto, the world's fourth largest three-and-two-wheeler maker rose 0.4% to 2,820 rupees after the Maharashtra state government lifted a ban on the issue of fresh licenses for auto-rickshaws and taxies in Mumbai and other major cities.

Larsen & Toubro rose 1.6% to 1,754.25 rupees after the company said it bagged orders worth 22.31 billion rupees.

Among other key movers, software exporter Infosys declined 1.2% to 929.45 rupees. JP Morgan in a note flagged leadership issues within the company, highlighting President Sandeep Dadlani's exit as "worrying."

Dr Reddy's Laboratories declined 0.8% to 2,656.85 rupees after it said on Friday that the U.S. Food and Drug Administration had made an observation regarding manufacturing practices at the drugmaker's Srikakulam plant in the southern Indian state of Andhra Pradesh. Sun Pharmaceutical Industries - the biggest drug maker by sales - slipped for a second session, also dropping 0.8% to 525.05 rupees.

In the rest of Asia, China's Shanghai Composite index ended 0.7% while Japan's Nikkei climbed 0.6%. Hong Kong's Hang Seng index closed up 1.2% and South Korea's Kospi index ended 0.4% higher.

--Dhanya Ann Thoppil

Asia300

ICICI Bank Ltd.

India

Market(Ticker): BOM(532174)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 27,067.16M
Shares: 6,416.96M
Asia300

State Bank of India

India

Market(Ticker): BOM(500112)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 33,386.30M
Shares: 8,632.05M
Asia300

Tata Steel Ltd.

India

Market(Ticker): BOM(500470)
Sector:
Industry:
Non-Energy Minerals
Steel
Market cap(USD): 10,655.92M
Shares: 971.21M
Asia300

Tata Motors Ltd.

India

Market(Ticker): BOM(500570)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 21,134.99M
Shares: 3,395.85M
Asia300

Bajaj Auto Ltd.

India

Market(Ticker): BOM(532977)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 14,543.88M
Shares: 289.36M
Asia300

Larsen & Toubro Ltd.

India

Market(Ticker): BOM(500510)
Sector:
Industry:
Industrial Services
Engineering & Construction
Market cap(USD): 24,774.56M
Shares: 1,400.54M
Asia300

Infosys Ltd.

India

Market(Ticker): BOM(500209)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 32,948.86M
Shares: 2,296.99M
Asia300

Dr. Reddy's Laboratories Ltd.

India

Market(Ticker): BOM(500124)
Sector:
Industry:
Health Technology
Pharmaceuticals: Generic
Market cap(USD): 6,085.81M
Shares: 165.87M

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