The government has been working on certain amendments to the Electricity Act that will focus on reforming India’s crippling power distribution companies. The reforms, as and when implemented could act as a panacea for the sector.
Prospects of reforms, of course, were not the only trigger. The power sector is also benefitting from a rotation of funds by high net worth and retail investors to the sectors where valuation comfort is highest. The strength of the move in the BSE Power index is reflected in the fact that it made an 11-year breakout on the daily charts. The BSE Power index closed 3.5 per cent higher at 3,182.7 points.
Sun Pharma gets moving
Dhares of the country’s largest pharmaceutical company are finally making a move to take out their all-time highs hit more than six years ago. The stock on Wednesday surged 4.5 per cent and made a 5-year breakout in daily charts. A move this strong is usually a sign of better things to come and with the company’s specialty drugs business looking up, investors are getting in early to win big.
Metals get a short squeeze
Metal companies don’t have much going for themselves when it comes to fundamentals. China’s problems are the commodity world’s problem and concerns are rising over both demand and pricing power for the sector. For Wednesday’s session, though, short squeeze provided a fillip to the sector as traders who had initiated short positions in metal stocks throughout the September series rushed to cover their positions ahead of the expiry of the monthly derivative series on Thursday. The Nifty Metal index, therefore, closed 2.3 per cent higher.
Benevolence of promoters
Vodafone Idea’s stock ended nearly 4 per cent higher as the company gathered its shareholders virtually for its annual general meeting. The mood at the meeting is likely to be the most optimistic it has been in five years as the government’s recent sops for the industry have provided clarity on the company’s survival.
Importantly, the telecom operator’s CEO Ravinder Takkar told a business news channel that the company’s promoters have expressed their interest in helping the company get the much-needed capital. For Aditya Birla Group and Vodafone, who were unwilling to make any infusion in the company a few months ago, that is quite a benevolent turn.
