Market Movers: IEX powers up with PTC India as India embarks on new reforms

MUMBAI: While Friday's session dominated by the outcome of the Reserve Bank of India’s monetary policy outcome, the most important headline of the day came from the Ministry of Power.

The government announced the framework for the implementation of Market-based Economic Despatch – Phase 1, a new set of reforms that will nudge the power sector away from power purchase agreements towards market-based price formation.

The move is a shot in the arm of power exchange platform Indian Energy Exchange, as it is likely to see a surge in volume of spot power traded on its platform in the coming years. The move would also be beneficial for the state-owned PTC India, which is in the works to launch a power trading platform of its own.

Investors of both the companies were overjoyed as shares of IEX and PTC India ended 10 per cent and 9 per cent higher, respectively.

Lifting of uncertainty
The 68-year-old ownership of the government over Air India ended on Friday with the announcement of the winning bid for the airliner. The former crown jewel of the Tata Family returns home. The lenders of airliner will also have a sigh of relief, as it gives them hope of recouping some of the loans dished out to the ailing company. Bank of Baroda is likely to be among the prime beneficiaries, as it has substantial exposure to the airliner. Shares of the state-owned lender ended nearly 6 per cent higher in relief.

RIL heading towards $300 billion
Out of the blue, shares of Reliance Industries took it upon themselves to help the benchmark equity indices close at record high levels. The stock surged nearly 4 per cent in one of the biggest one-day moves in recent months aided by optimism for the energy businesses and retail operations. The company also became the first Rs 18 lakh crore company in Indian history and with a little push could now become the first $300 billion company from India.

Good old 'sell the news'
Shares of Piramal Enterprises became victims of the good old adage in the equity market: buy the rumour, sell the news. On Friday, the stock tanked over 5 per cent as investors rushed to book profit following Thursday’s announcement of the company demerging its pharmaceutical business. A lot has been going the way of the Piramal House in recent months thanks to the revival of the real estate sector, the acceptance of its bid for DHFL and now the long overdue demerger of the pharma business. Friday’s profit booking may, in fact, be a chance for investors to be part of a story that seems to have more chapters to it.

Banks are struggling for steam
Even as largecap, midcap and smallcap stocks continued to hit their record high levels, it seems nothing is able to light the same fire under the shares of banking stocks. On a day when Nifty50 rose 0.6 per cent, Nifty Bank ended largely flat. The underperformance on strong market days has become a trend. Investors aren’t able to display the same faith in the sector that they have showered on others. However, analysts hope that the forthcoming September quarter earnings season will help change that narrative.