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Abu Dhabi, UAESaturday 23 June 2018

India's Sensex headed for a record high

Indian savers are shifting more money to financial assets as prices of gold and property have moderated

A screen displaying the Sensex on the Bombay Stock Exchange in Mumbai. Rajanish Kakade / AP Photo
A screen displaying the Sensex on the Bombay Stock Exchange in Mumbai. Rajanish Kakade / AP Photo

India’s benchmark stock index was headed for a record high Monday, with Reliance Industries contributing most to the gain on speculation the launch of its Jio feature phone will be a disrupter for the telecommunications industry.

The S&P BSE Sensex Index rose 0.6 per cent to 32,203.79 at 10:26am in Mumbai as Reliance advanced 2.1 per cent, poised to close at an all-time high. Software exporter Wipro climbed 1.8 per cent, adding to its biggest rally in four years Friday after the company said it plans to buy back shares, while drugmaker Lupin rose 1.3 per cent.

Foreign inflows have picked up pace as emerging markets continue to benefit from the US Federal Reserve’s paced interest-rate increases, while Indian savers are shifting more money to financial assets as prices of gold and property have moderated after the government’s ban on high-value currency notes. Indian shares have hit multiple records this year amid optimism about the prime minister Narendra Modi’s policies, with the economy expanding at about seven times the pace of Japan’s.

“It is the liquidity that is driving the market,” said Devam Modi, a research director at Equirus Securities. “India’s growth prospects and government efforts to improve fundamentals provides it an upside for investment. Inflows both domestic and foreign flows remain strong, which has stretched valuations. However, we aren’t in bubble territory.”

Reliance Jio Infocomm, the wireless unit of the billionaire Mukesh Ambani’s retail-to-refining conglomerate will offer a data-enabled feature phone for 1,500 rupees (Dh84.48) starting August 15, he told shareholders in Mumbai on Friday. The handset, or JioPhone, will come with tariff plans as low as 23 rupees for two days or 153 rupees monthly. The unit will also start giving separate earnings statement from the quarter ending September along with the parent’s results.

“The company has disrupted again by launch of 4G feature phone Jio aimed to capture the feature phone market,” Nitin Tiwari, said the analyst at Antique Stock Broking wrote in a note. “We expect launch of feature phones to increase Jio’s subscriber base faster than estimated earlier.”