New Delhi, December 5
The Sensex and the rupee rallied today as the exit polls showed the main Opposition party, the BJP, leading in four assembly elections.

The Sensex surged 249 points to a one-month high on Thursday after the exit polls and the rupee strengthened by 30 paisa to end at 61.75 versus dollar, hitting a five-week high.

The Sensex opened on a strong note and vaulted as much as 457 points to an intra-day high of 21,165 points. Profit booking pared the gains and the index closed at 20,957.81, just below the 21,000 mark, adding 249.10 points or 1.2%.

ICICI Bank and HDFC Bank together contributed 163 points to the gains on the Sensex, which was also lifted by Larsen & Toubro and Reliance Industries. BHEL and Maruti Suzuki were among the 20 index shares that moved up.

Nine of the 13 BSE sectoral indices advanced, with a strong performance in bank and capital goods stocks. The index is at the highest closing level since 20,974.79 on November 5.

Most exit polls indicated gains for the BJP in Delhi, Chhattisgarh, Madhya Pradesh and Rajasthan.

Bank of America Merrill Lynch said in a report if the results are in line with the exit polls, "We think it would be positive for the market". The report said the market is looking for a strong, stable government post 2014 elections and it seems these results will likely make the market think that BJP could emerge as the lead party in the 2014 elections. The election results will be announced on December 8.

UBS Securities said in a note that history suggests a gap move on election results is not ruled out. "Based on our discussions with investors, the market is positively inclined towards the Narendra Modi-led BJP and the recent rally implies markets no longer view it as a low-probability scenario", UBS said.

UBS said a new government will take steps to correct the course of the economy, but market moves pre and post elections may differ.

Shrikant Chouhan, Head, Technical Research, Kotak Securities, said the market opened up with a huge gap which was beyond the expected uptick on the back of exit polls.

During the day, capital goods, infrastructure, metal stocks and banks did well, whereas pharmaceuticals and FMCG stocks remained weak. Technology stocks also showed weakness on the back of steep appreciation of the rupee, he added.

New Delhi, December 5
Prime Minister Manmohan Singh today stressed on the need to strengthen the domestic manufacturing base in electronics and telecommunications which would help bring down the import bill.

Inaugurating India Telecom 2013, organised by Ficci and the DoT here, the Prime Minister said, "I would like to take today's opportunity to repeat a point that I made last year. India needs to develop a strong domestic manufacturing base in electronics and telecommunication. It is estimated that by 2020 India will be importing electronics products worth $300 billion, which will be more than the value of our oil imports”.

"We need to act now to avoid a situation where we face difficulties in financing these imports. India should have manufacturing facilities which result in a balanced trade in electronics products and are part of global supply change," the Prime Minister said.

Talking about policies in the telecom sector, Singh said National Telecom Policy 2012 has brought clarity on number of issues in the sector.

"I understand the DoT has already started issuing Unified Licences and will shortly issue the Merger and Acquisitions (M&A) guidelines," he said.

The Prime Minister also expressed concern with the country's teledensity.

"With a rural teledensity of just over 40%, there are millions whose life still remains untouched by the telecom revolution. And this is a challenge that should worry all of us," he said.

"This deficit is further magnified when it comes to Internet connectivity. On a per-capita basis, the usage of Internet is quite low in India. Both the availability and reliability of Internet services outside the major cities leave much to be desired," he added.

Elaborating on use of telecom technologies for modernising systems, Singh touched upon Telecom Ministry's plan to provide 3G connectivity with computers for students.

Telecom Minister Kapil Sibal said the government was looking at addressing the immediate concerns of the industry by firming up new rules.

New Delhi, December 5
Global ratings agency Moody's today cautioned that there could be downward pressure on India's sovereign rating if growth weakens further and high inflation persists.

The ratings agency expects a 'slow' recovery in India's economic growth in the second half of 2014 provided the global economy recovers and while domestic inflation and interest rate decline.

"Downward pressure on the rating could develop if the medium-term growth and fiscal outlook weakens further or there is a material decline in foreign exchange reserve coverage of external debt and imports," Moody's Investors Service said in a report.

Also a persistent high inflation affecting growth and government finances could have a downward pressure on the country's rating. — PTI

New Delhi, December 5
The Labour Ministry has relaxed investment norms for retirement fund manager EPFO, but refrained from allowing the body to invest a part of its huge corpus of around Rs 5 lakh crore in equity markets.

According to a recent notification of the ministry, the Employees' Provident Fund Organisation (EPFO) will be allowed to invest up to 55% of its funds in debt securities issued by banks and financial institution and other body corporates.

As per the practice, EPFO parks its funds in accordance with the investment pattern notified by the labour ministry.

Earlier, as per the investment pattern notified by the Ministry in July, 2003, EPFO was allowed to invest up to 30% of funds in PSU debt.

The notification, however, will not be applicable to private PF trusts regulated by EPFO. The ministry would issue a separate notification for these trusts as was done way back in 2003. There are around 2,700 such trusts which manage around Rs 2 lakh crore social security funds.

The Finance Ministry has long been pitching for investment of EPFO funds in equity markets to maximise the yields on investments. However, following strong opposition from unions against the volatile nature of investments in stocks, EPFO did not opt for equity investment. — PTI

Tokyo, December 5
Japanese Prime Minister Shinzo Abe's cabinet approved a $182 billion package on Thursday to pull the economy out of deflation, but doubts remain about the impact.

The package has a headline value of 18.6 trillion yen ($182 billion), which is an exaggerated figure as the bulk of the package includes loans from government-backed lenders and spending by local governments that was already scheduled.

The core of the package is 5.5 trillion yen in spending measures which Abe ordered in October to bolster the economy ahead of a national sales-tax hike in April. — Reuters

New Delhi, December 5
The follow-on-public offer of Power Grid Corporation was subscribed 4.77 times on the third day of offer today with institutional buyers lapping up the shares.

For the 78.70 crore shares offered for sale, the total number of bids received was 375.73 crore at close today. The number of bids at cut off price was 16.88 crore, as per data available. — PTI

BRIEFLY

NTPC pre-closes Rs 1,750-cr tax-free bond issue
New Delhi: NTPC on Thursday said it has pre-closed its Rs 1,750-crore bond issue which received a thumping response from investors by getting oversubscribed 3.3 times. "The company has exercised the option of early closure of its public issue of tax-free secured redeemable non-convertible bonds which was opened on December 3 and was scheduled to close on December 16. The issue will now close today," NTPC said.— PTI

No plans to sell stake in Bharti Airtel: Vodafone
New Delhi: Vodafone Group has ruled out selling its around 5% stake in the holding company of Bharti Airtel in the near future as there is no buyer. "That's not a stake in Bharti. It's a stake in holding company privately owned by the Mittal family and I think its sitting there and one day it will be worth something but for the time being there is no buyer," Vodafone Group CEO Vittorio Colao said. — PTI

India ranks 98 in Forbes list on best countries for biz
New York: India has been ranked 98th in the Forbes list of world's best countries for doing business that has cited poverty, corruption and discrimination against girls among the challenges facing the country. Ireland topped the list, followed by New Zealand which slipped to the second position. Hong Kong was third for the second straight year. — PTI

Gold bounces back on seasonal demand
New Delhi: Snapping two days of losses, gold prices rose by Rs 450 to Rs 31,250 per 10 gram in the national capital on Thursday on emergence of buying by stockists at existing lower levels for the ongoing marriage season amid a strong global trend. Silver, however, fell for the third straight session by losing Rs 200 to Rs 43,800 per kg on lack of buying support from coin makers and industrial units. — PTI