Sensex, Nifty trade in green in opening session: RIL stocks zoom, rallies over 7% after Facebook announces investment

Sensex rose over 200 points in opening trade lifted by strong gains in index heavyweight Reliance Industries even as weak cues from global markets weighed on overall market sentiment.

FP Staff April 22, 2020 10:34:35 IST
Sensex, Nifty trade in green in opening session: RIL stocks zoom, rallies over 7% after Facebook announces investment

Stocks edged higher on Wednesday, lifted by an 8 percent jump in Reliance Industries Ltd after Facebook invested in its digital business, even as broader sentiment remained weak following another meltdown in oil.

The benchmark indices opened in the green on Wednesday.

Sensex rose over 200 points in opening trade lifted by strong gains in index heavyweight Reliance Industries even as weak cues from global markets weighed on overall market sentiment. After hitting a high of 30,856.14, the 30-share index was trading 130.78 points or 0.43 percent higher at 30,767.49.

Similarly, the NSE Nifty advanced 17.50 points, or 0.19 percent, to 8,998.95. RIL-Facebook deal Reliance Industries (RIL) was the top gainer in the Sensex pack, rallying over 7 percent, after Facebook announced an investment of $5.7 billion (Rs 43,574 crore) to buy a 10 percent stake in Jio Platforms.

This deal makes Facebook the largest minority shareholder in Jio Platforms, which is part of Reliance Industries.

Jio Platforms is a wholly-owned subsidiary of Reliance Industries.

Accordingly, the company''s stocks at the BSE gained Rs 83.85 or 6.78 percent to Rs 1.319.90 per share from its previous close.

In the intra-day trade period till now, the stock touched a high of Rs 1,339.20 and a low of Rs 1,300 per share.

On early Wednesday morning, the company announced that social media giant Facebook has entered into binding agreements to invest Rs 43,574 crore into Jio Platforms for a 9.99 per cent stake.

"This investment by Facebook values Jio Platforms at a 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs 70 to a US Dollar)," RIL said in a statement.

"Facebook''s investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis," it said.

Furthermore, the statement said the partnership assumes special significance for India in the wake of the severe disruptions caused by the coronavirus pandemic in the Indian and the global economy.

"In the post-COVID era, comprehensive digitalisation will be an absolute necessity for revitalisation of the Indian economy," the statement said.

"It is our common belief and commitment that no Indian should be deprived of the tremendous new opportunities, including for new employment and new businesses, in the process of India''s 360-degree digital transformation."

Concurrently to the investment, Jio Platforms, Reliance Retail and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail''s New Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.

Gainers and losers

Sun Pharma, Asian Paints, Maruti, Ultratech Cement and Infosys were also trading on a positive note.

On the other hand, ONGC, PowerGrid, Bajaj Finance, IndusInd Bank and HDFC were among the laggards.

In the previous session, the BSE barometer ended 1,011.29 points or 3.20 per cent lower at 30,636.71, while the Nifty plummeted 280.40 points, or 3.03 per cent, to 8,981.45.

Foreign portfolio investors were net sellers in the capital market on Tuesday, as they offloaded equity shares worth Rs 2,095.23 crore, according to provisional exchange data.

According to traders, domestic market was lifted by heavy buying on RIL counter after the USD 5.7 billion Facebook deal.

Broader market sentiment, however, remained weak as concerns over coronavirus pandemic weighed on global investor mood, they said.

BSE midcap and smallcap indices were trading in the red.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with heavy losses in early deals.

Wall Street crashes

On Wall Street, key indices crashed up to 3 percent in overnight session.

Wall Street tumbled for a second straight day on Tuesday as a collapse in U.S. oil prices and glum forecasts by companies worsened fears of a deep economic downturn.

The Dow Jones Industrial Average fell 630.73 points, or 2.67%, to 23,019.71, the S&P 500 lost 86.67 points, or 3.07%, to 2,736.49 and the Nasdaq Composite dropped 297.50 points, or 3.48%, to 8,263.23.

The death toll due to the pandemic rose to 640, while the number of cases in the country climbed to 19,984.

Global tally of the infections has crossed 25 lakh, with over 1.77 lakh deaths.

Meanwhile, the rout in global oil prices continued, with Brent crude futures plunging 13.30 per cent to USD 16.76 per barrel.

--With inputs from agencies

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