Benchmarks log fresh record highs on F&O expiry day; Nifty surpasses 7,950 mark

Indian stock markets closed the August futures and options series on a strong note with a massive gain of around three percent. Moreover, the expiry session turned out to be a fabulous day of trade for the Indian equity markets, which scaled fresh all time closing highs for yet another session amid sustained foreign fund inflow. The markets, on the August F&O expiry day, remained remarkably steady with Sensex confining itself to a range of around 100 points. Though, some volatility was witnessed in last leg of trade but frontline gauges managed to log their new all time closing highs.

Overall, sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the General Anti Avoidance Rules (GAAR) were being revisited and that a decision would be taken soon, adding that the date of GAAR coming into force would also be looked at afresh. India Inc also cheered the announcement of Reserve Bank of India (RBI) simplifying external commercial borrowing (ECB) norms. The central bank also allowed companies to raise fresh funds through ECBs where the average maturity period (AMP) exceeds the residual maturity of the existing ECB under automatic route, with certain riders. However, gains remained capped on Moody’s report stating India’s sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery. Further, caution ahead of the release of Q1FY15 GDP data and possibly even Current Account Deficit (CAD) numbers later this week, also underpinned investors to be on the sidelines.

On the global front, European markets were trading in the red in early deals, as investors focused on further data releases for hints about the European Central Bank's likely policy moves. Asian markets ended mostly in the red as investors remained sidelines ahead of U.S. economic data and possible policy announcements from Japan.

Back home, sentiments remained up-beat on report that foreign institutional investors remained aggressive buyers in Indian equities infusing around Rs 77,684 crore in the past seven months since February and Rs 6,408 crore for this month till August 26, as per regulatory data. Meanwhile, public sector oil marketing companies (OMCs) gained after the government removed the restriction of one subsidized LPG cylinder per month for each consumer. The restriction of 12 subsidized cylinders per consumer per annum continues. Additionally, railway-related stocks edged higher after the government notified the liberalised foreign direct investment (FDI) norms for rail infrastructure, allowing 100% FDI through automatic route in the sector.

The NSE’s 50-share broadly followed index Nifty edged higher by around twenty points to end above its psychological 7,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around eighty points to finish above the psychological 26,600 mark. Broader markets, however, ended mixed. The market breadth remained in favour of decliners, as there were 1376 shares on the gaining side against 1553 shares on the losing side while 117 shares remain unchanged.

Finally, the BSE Sensex surged by 77.96 points or 0.29%, to 26638.11, while the CNX Nifty gained 18.30 points or 0.23% to 7,954.35.

The BSE Sensex touched a high and a low of 26674.38 and 26573.69, respectively. The BSE Mid cap index was down by 0.30%, while the Small cap index was up by 0.10%.

The top gainers on the Sensex were BHEL up by 5.04%, GAIL India up by 1.96%, ONGC up by 1.73%, Larsen & Toubro up by 1.62% and Wipro up by 1.39%. On the flip side, Tata Power down by 1.97%, Tata Steel down by 1.78%, SBI down by 1.70%, NTPC down by 1.18% and Hindalco down by 1.10% were the top losers in the index.

On the BSE Sectoral front, Capital Goods up by 1.43%, Oil & Gas up by 1.06%, FMCG up by 0.74%, INFRA up by 0.45% and PSU up by 0.32% were the top gainers, while Realty down by 1.91%, Metal down by 0.85%, IT down by 0.57%, TECK down by 0.34% and Healthcare down by 0.31% were the top losers in the space.

Meanwhile, in a bid to accelerate the implementation of highway projects, the government gave full authority to the road transport and highways (RTH) ministry to ease the rigid Model Concession Agreement (MCA) in order to fast-track the development of highway projects. RTH Ministry can now decide on the mode of delivery and amendments in regard to agreements with developers.

The CCEA, chaired by the Prime Minister Narendra Modi, empowered the RTH Ministry so that the MCA can be amended as required from time to time and decide which mode is the best for effective delivery of road projects. MCA is the document that governs any road contract and management of project till the time a private player operates. Till now, even small changes in the MCA were referred to inter-ministerial group (IMG) for approval which adversely impacted timely road development in the country.

India needs widespread highway infrastructure to prevent the sector from becoming hurdle to its economic growth. Over the past five years, the highway road development in the country remained sluggish with physical achievement falling short of its intended target and getting further delayed with time. During FY14, the National Highways Authority of India (NHAI) has managed to award around 1,436 km lengths of road projects as against the set target of 4,030 km, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km. Financial constraints, delay in land acquisition and environmental clearances, lack of project planning and compexities are the leading factors impacting road infrastructure development in the country.

The CNX Nifty touched a high and low of 7,967.80 and 7,939.20 respectively.

The top gainers of the Nifty were BHEL up by 3.99%, BPCL up by 2.32%, Larsen & Toubro up by 1.91%, Dr. Reddy's Laboratories up by 1.79% and ONGC up by 1.76%. On the other hand, Jindal Steel & Power down by 4.50%, DLF down by 3.20%, Tata Power Company down by 2.43%, Tata Steel down by 1.90% and Bank of Baroda down by 1.77% were the top losers.

European markets were trading in red, France's CAC 40 was down by 0.77%, Germany's DAX was down by 1.28% and United Kingdom's FTSE 100 was down by 0.44%.

Asian markets ended mostly in red on Thursday, as a rising yen dragged Japan’s indices lower, ahead of the release of industrial output and inflation data for July. The value of mergers and acquisitions in China hit a record in the first half of this year. The M&A deals, including domestic, outbound and inbound, rose 19% from the same period a year ago to $183 billion, while the number of deals was flat at 2,648. The National Bureau of Statistics stated that China’s industrial profits rose 13.5% in July after climbing 17.9% in June, the fastest pace since September. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of -3.1%, from -6.9% in the preceding month. Philippines GDP rose to a seasonally adjusted annual rate of 6.4%, from 5.6% in the preceding month whose figure was revised down from 5.7%. The latest data bolsters expectations the central bank will follow up on July’s rate hike - the first in three years - as early as next month to stay on top of rising prices.