Benchmarks continue to log fresh highs; Sensex surpasses 27,000 mark

Extending their winning streak to fourth straight session, Indian equity benchmarks scaled yet another lifetime closing high levels on Tuesday, which took Nifty above its crucial 8,050 mark, while Sensex surpassed psychological 27,000 mark with gains of over half a percent. Sentiments remained positive since beginning of the trade and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks.

Sentiments remained up-beat after India’s current account deficit (CAD) for this financial year’s first quarter, April to June,  narrowed sharply to 1.7 per cent of gross domestic product ($7.8 billion) from 4.8 per cent of GDP ($21.8 billion) in the corresponding period of 2013-14. Further, India’s balance-of-payments remained in surplus for the third straight at $11.2 billion for Apr-June 2014. Some support also came in with Prime Minister Narendra Modi’s statement that his government is determined to push tax and financial sector reforms to improve business environment. Moreover, investors shrugged off report that the growth in eight core industries slowed down to 2.7 per cent in July after surging to a nine- month high of 7.3 per cent in June due to decline in production of crude oil, natural gas, refinery products, fertilisers and steel.

Global cues too remained supportive with European markets trading higher in early deals amid speculation that slower growth and low inflation in euro zone will prompt European Central Bank (ECB) to accelerate stimulus. Asian markets too ended mostly in the green on Tuesday led by Japanese markets, up by over a percent, with a weaker yen triggered some hectic buying at several counters.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Some support also came on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 554.14 crore on Monday, as per provisional data from the stock exchanges. Meanwhile, stocks related to Auto space too edged higher as all the major manufacturers have reported good sales numbers for the month of August. Car sales rose by 17.9% in August, driven by top three manufacturers -- Maruti Suzuki, Hyundai Motor India and Honda Cars India, marking the third straight month for a double-digit growth in car sales. Additionally, cement makers remained in demand on expectation of improvement in demand along with an increase in prices once monsoon season ends.

The NSE’s 50-share broadly followed index Nifty rose by over fifty points and ended above the psychological 8,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over one hundred and fifty points to finish above the psychological 27,000 mark. Broader markets traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1738 shares on the gaining side against 1250 shares on the losing side while 125 shares remain unchanged.

Finally, the BSE Sensex surged by 151.84 points or 0.57%, to 27019.39, while the CNX Nifty soared by 55.35 points or 0.69% to 8,083.05.

The BSE Sensex touched a high and a low of 27082.85 and 26886.22, respectively. The BSE Mid cap index was up by 0.84%, while the Small cap index gained 0.91%.

The top gainers on the Sensex were Cipla up by 5.23%, Bharti Airtel up by 4.24%, Sun Pharma up by 2.50%, HDFC Bank up by 2.01% and Hero MotoCorp up by 1.54%. On the flip side, Sesa Sterlite down by 1.87%, Tata Power down by 1.05%, Hindalco down by 0.99%, Wipro down by 0.91% and Tata Steel down by 0.89% were the top losers in the index.

On the BSE Sectoral front, Consumer Durables up by 2.76%, Healthcare up by 1.84%, Infrastructure up by 1.39%, Oil & Gas up by 1.04% and TECK up by 0.76% were the top gainers, while Metal down by 0.80%, Power down by 0.02% and Capital Goods down by 0.01% were the only losers in the space.

Meanwhile, Influencing Japanese investors towards Indian economic growth prospect, Prime Minister Narendra Modi has stated that the government determined to push tax and financial sector reforms in order to improve business environment in the country.

During his ongoing visit to Japan, Prime Minister interacted with the Japan’s corporate leaders and influenced them to invest in India. Narendra Modi invited Japanese businesses to join India's developmental efforts with a promise of non-discriminatory and speedy clearances and also announced setting up of a Special Management Team under PMO to facilitate business from Japan.

After two years of sluggish growth, Indian economy has shown sign of recovery and grew by 5.7% during Q1FY15 as compared to 4.7% growth recorded in Q1FY14. Investments seem to have rebounded with investment activity rising at solid pace and reassured consumers have begun to spend again, indicating the worst slowdown in the last decade may finally be over. The government is also taking various measures to boost economic growth. It has relaxed norms for foreign direct investment in key sectors like defence and railways.

Further, Indian government has also announced that it will soon implement Goods and Services Tax (GST) which will replace existing state and federal levies and will integrate State economies and boost overall growth.

The CNX Nifty touched a high and low of 8,101.95 and 8,036.55 respectively.

The top gainers of the Nifty were Cipla up by 5.38%, Bharti Airtel up by 4.31%, Grasim Industries up by 3.82%, Ambuja Cements up by 3.65% and ACC up by 3.63%. On the other hand, Jindal Steel & Power down by 3.65%, SSLT down by 1.82%, Tata Power Company down by 1.16%, Hindustan Unilever down by 1.02% and Tata Steel down by 0.92% were the top losers.

European markets were trading in green, France's CAC 40 was up by 0.51%, Germany's DAX was up by 0.94% and United Kingdom's FTSE 100 was up by 0.23%.

Asian markets ended mostly in green on Tuesday, with momentum from prior gains fading as investors were left short of cues with the US markets closed on Monday. China’s benchmark stock index rose to a 15-month high, led by defense and technology companies, amid speculation that the government will increase military spending as part of its efforts to bolster economic growth. Japan’s indices rose to a seven-month high as the yen weakened amid speculation a politician in favor of pension reform will be appointed health minister, with duties including overseeing retirement savings. The Bank of Japan is forecast to keep its policy unchanged at a two-day meeting starting tomorrow. BOJ officials expect the premier to proceed with a second sales-tax increase next year following a hike in April to maintain confidence in the government’s finances.

Indonesian manufacturing activity contracted for the first time in a year in August, weakened by declining new orders and production, the HSBC Markit purchasing managers’ index (PMI) survey showed. The index was 49.5 in August, down from 52.7 the previous month and the lowest for Southeast Asia’s largest economy since August 2013. Inflation slowed in August as most raw food prices steadied. Meanwhile, the country posted a trade surplus in July, swinging from a deficit in the previous month. Consumer price inflation in South Korea rose less-than-expected last month. South Korean CPI rose to 0.2%, from 0.1% in the preceding month.