The stock markets cheered the upgrading of the country’s telecom stocks by Credit Suisse amidst an overall improving sentiment in markets worldwide, leading to the benchmark Sensex gaining 182 points, or 1.0 per cent, to close at 17,834.
An upgrade of Bharti Airtel from “neutral” rating to “outperform” drove sentiments and the company’s share price rose by 10.4 per cent intra-day, before closing the day at Rs 308 with a gain of 9.7 per cent.
The Credit Suisse report suggested that post-consolidation of its African business, Bharti was likely to achieve an earning per share of Rs 20 for the third quarter of 2010-11, with 27 per cent earnings growth for the following two years.
Idea Cellular also witnessed a strong rally as its share price rose by 13.3 per cent during the day to close at Rs 67, after Credit Suisse raised its rating to “outperform” from “underperform”.
Tata Teleservices and Reliance Communications also witnessed gains of 5.5 per cent and 2.8 per cent, respectively during the day. The technology index of the Bombay Stock Exchange rose by 2.4 per cent.
Sugar stocks also rose sharply after Agriculture Minister Sharad Pawar said he will propose a decontrol in the sugar industry.
Share prices of Shree Renuka Sugars, Bajaj Hindustan, Balrampur Chini and Triveni Engineering rose between 3 per cent and 5.5 per cent during the day after the decontrol talks.