India's Sensex Advances to Record as Rival Index Suffers Outage

  • Investors may have covered shorts after Sebi rule: RAAY Global
  • National Stock Exchange suffered its longest technical outage

Employees walk past electronic ticker boards at the National Stock Exchange in Mumbai, India.

Photographer: Dhiraj SIngh/Bloomberg

Indian shares rose, and the benchmark index rallied its second record high in three sessions, after a regulator tightened rules for offshore derivatives and banned so-called “naked” bets. The National Stock Exchange, the country’s largest bourse, suffered its longest technical outage, handing over the volumes to rival BSE Ltd.

The benchmark S&P BSE Sensex climbed 1.1 percent to close at 31,715.64 by 3:30 p.m. in Mumbai, led by Bharti Airtel Ltd.’s 5.4 percent rally on BSE Ltd. The nation’s largest wireless carrier said it will invest as much as 20 billion rupees to upgrade its stores. National Stock Exchange of India Ltd.’s problems persisted and prices didn’t update even as the bourse resumed trades after a nearly three-hour delay.

Read more on NSE trading outage

The Securities and Exchange Board of India late Friday banned holders of offshore derivatives tied to the nation’s equities from taking unhedged exposure and said existing bets must be liquidated by the end of 2020 or by the date of maturity of the instrument. That prompted speculation that some traders who had previously sold stock short were undoing positions, because of the clamp-down.

“The market rally indicates two things: one is that some investors are covering their short positions after the regulator’s directives and second is the bullish trend, that’s willing to ignore the negatives,” said Sushant Kumar, a fund manager at RAAY Global Investments Pvt. in Mumbai.

Foreign and domestic funds have purchased more than $14 billion net of Indian shares in 2017, according to data compiled by Bloomberg. That’s helped push the Sensex to multiple records this year and made it the best-performing major market index in Asia.

Trading volume on BSE Ltd. surged almost 77 percent from Friday to about 571 million shares, while NSE saw a decline of 76 percent.

The S&P BSE MidCap Index gained 0.7 percent, while the S&P BSE SmallCap Index rose 0.4 percent to a record. Twelve of the 13 sector indexes compiled by BSE Ltd. advanced, led by the S&P BSE Communication Technology Index and the S&P BSE Information Technology Index, which gained about 3 percent each.

Summary (all BSE prices)

  • AU Small Finance Bank Ltd. surges 51% in its debut; the company offered shares in IPO at 358 rupees apiece
  • IDFC Ltd. drops 5.7% after announcing plans to merge businesses with Shriram Capital Ltd.; Shriram Transport Finance Co. -3.3%, Shriram City Union Finance Ltd. -5.6%
    • NOTE: IDFC-Shriram Deal May Be Negative for Shareholders: Street Wrap
  • Rolta India Ltd. jumps 15% after it proposed to restructure of some bonds
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