Sensex rebounds 260 points to close at three-week high of 25,850
The 30-share Sensex settled higher by 259.65 points, or 1.01%, at 25,850.30 -- its highest closing since December 3.business Updated: Dec 23, 2015 23:28 IST
Lack of sell-off from foreign portfolio investors, encouraging fiscal numbers and positive global cues pulled up stock markets on Wednesday, spreading the enthusiasm to newly-listed stocks Alkem Laboratories and Dr Lal Pathlabs, which rose 31% on their debuts, in one of the few strong listings in India this year.
The Sensex rose 260 points, or 1%, to a three-week high of 25,850.30, while the Nifty gained 79.85 points, or 1%, to 7,865.95.
“Markets tracked strong global cues and recovery in index majors on the domestic front. Narrower current account deficit also boosted sentiment,” said Jayant Manglik, president, retail distribution at Religare Securities.
India’s current account deficit — a measure of the difference between the inflows and outflows of a foreign currency — narrowed to $8.2 billion, or 1.6% of GDP, in the July-September quarter, from $10.9 billion, or 2.2% of GDP, a year ago.
The rupee gained for the seventh straight session against the dollar, rising 12 paise to 66.21, which added to positive sentiment.
Gail India was the biggest gainer among Sensex stocks (up 5.8%). Other major gainers included Tata Steel, Bharti Airtel Sun Pharma and BHEL which rose in the range of 2.5-3.5%.
Dr Lal Pathlabs opened at Rs 717 on the BSE against its issue price of Rs 550. It hit a high of Rs 842.40 during the day and closed at Rs 824.15.
Alkem, India’s fifth-largest pharma company, opened on the BSE at Rs 1,380, compared to its issue price of Rs 1,050. It touched a high of Rs 1,410, before closing at Rs 1,381.45, up 31.6%.
Drug maker Alkem has raised Rs 1,350 crore through its initial public offer (IPO), which closed on December 10. The issue was oversubscribed 44 times. Dr Lal Pathlabs, which operates a chain of 172 laboratories across the country, raised Rs 632 crore through the IPO, which also closed on December 10.
“Dr Lal Pathlabs’s business is a combination of a hub and spoke model that both yields economies of scale and is scalable for future growth, an instrument-leasing model that results in lower capital expenditure for diagnostic equipment and a network whose size enhances its purchasing power with suppliers,” HDFC Securities said in a report.
Analysts are also bullish on Alkem, and cite its strong research and development capabilities, domestic market leadership in various therapeutic areas and enhanced focus on exports. It is ranked number one in anti-infectives and is third largest in market share in gastro-intestinal medicines, analysts said, citing IMS Health data.
The IPO market in India in has seen a revival in 2015 due to an improvement in capital markets amid economic reforms pursued by the government. According to VC Circle, about $1.7 billion was raised in 2015, excluding the funds generated by Alkem Labs and Dr Lal Pathlabs through their respective IPOs that closed on December 10. More wealth from high net worth individuals was channelled into equities, analysts said.