Benchmarks hit fresh high; Sensex surpasses 27,300 mark

Coming out from their consolidation mood, boisterous benchmarks showcased an enthusiastic performance on Monday, by rallying over one percentage point. Sentiments remained up-beat since start as key bourses opened with decent gains 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 stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 8,150 (Nifty) and 27,300 (Sensex) bastions as investors took to hefty across the board buying.

Sentiments remained jubilant on report that provisional data from the exchanges showed that foreign funds were net buyers the previous trading session. Some support came after the Union Power and Coal Minister Piyush Goyal has played down the coal shortages situation and said that the government in 100 days had got the system to produce nearly 22 per cent more electricity and is on track to provide 24x7 power to all in five years. Meanwhile, Reserve Bank of India’s governor Raghuram Rajan said that aggressive monetary policy by developed economies may hurt global growth by pushing emerging markets to pile up foreign-exchange reserves instead of spending.

Supportive cues from US markets provided the much needed support to local markets initially, as lower than estimated jobs data fueled bets that Federal Reserve won’t rush to raise interest rates. Positive closing in Asian markets too supported the sentiments, led by the Japanese market which ended higher, supported by the yen’s weakness, which was subdued against a firmer dollar. However, European markets made a disappointing start and were trading in the red terrain, retreating after an opinion poll showed supporters of Scottish independence from Britain taking the lead for the first time since the referendum campaign began.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Meanwhile, appreciation in Indian rupee against dollar too aided the sentiments. The rupee strengthened to a more than five-week high on Monday, tracking broad overnight losses in the dollar versus major currencies following the weaker-than-anticipated US jobs data.

Rally in public sector oil marketing companies (OMCs) too supported the sentiments. Shares of HPCL, BPCL and IOC edged higher as crude oil prices dropped on Friday. Crude oil futures dropped on Friday after downbeat US jobs data fuelled demand concerns and a ceasefire in Ukraine cooled geopolitical tensions. Additionally, shares of tyre companies like Ceat, Apollo Tyres, JK Tyres and MRF Tyres surged on account of decline in rubber prices. According to Rubber Board of India, domestic rubber prices have seen sharpest fall in five years, hitting Rs 126 per kg. Rubber prices were down 25 percent since average of Rs 169/kg seen in January.

The NSE’s 50-share broadly followed index Nifty gained by around ninety points to end above its psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and ninety points to end above its crucial 27,300 mark. The broader markets too traded jubilantly throughout the session and ended the session with a gain of around one and a half percentage points. The market breadth remained in favour of advances, as there were 2,081 shares on the gaining side against 947 shares on the losing side while 98 shares remain unchanged.

Finally, the BSE Sensex surged by 293.15 points or 1.08%, to 27319.85, while the CNX Nifty soared by 87.05 points or 1.08% to 8,173.90.

The BSE Sensex touched a high and a low of 27354.99 and 27144.56, respectively. The BSE Mid cap index was up by 1.29%, while the Small cap index was gained 2.11%.

The top gainers on the Sensex were Hindalco up by 3.49%, ONGC up by 2.78%, SBI up by 1.94%, HDFC Bank up by 1.80% and Wipro up by 1.66%.On the flip side, NTPC down by 1.61%, Mahindra & Mahindra down by 0.75%, Tata Power down by 0.34% and HDFC down by 0.18% were the only losers in the index.

On the BSE Sectoral front Oil & Gas up by 1.79%, FMCG up by 1.40%, Bankex up by 1.38%, Capital Goods up by 1.29% and Metal up by 1.25% were the top gainers, while Consumer Durables down by 0.22% was the only loser in the space.

Meanwhile, with an aim to boost India’s MSME sector’s growth, Union Cabinet Minister of Micro, Small and Medium Enterprises Kalraj Mishra has stated that the government will soon introduce a new comprehensive policy for the MSME sector after incorporating suggestions from related associations. Highlighting the importance of the MSME sector, the Minister said that the country would become a developed nation on the strength of this sector and the new policy will introduce measures to create progressive environment for small industries’ growth. 

By adding further, Kalraj Mishra stated that the government is making several efforts for addressing issues related to loan sanction for micro industries, skill development, implementing e-governance system to improve governance and introducing mechanism to simplify the process to seek NOC in a time-bound manner.

The MSME sector contributes around 8% of the country's GDP, 45% of the manufactured output and provides employment to over 8 crore people. Further, to boost the country's micro, small and medium enterprises sector (MSMEs), the government has allocated Rs 24,124 crore for sector during the Twelfth Five-Year Plan period (2012-17) which is 133.53 percent higher than allocation of Rs 10,330 crore during the Eleventh Plan.

The CNX Nifty touched a high and low of 8,180.20 and 8,126.15 respectively.

The top gainers of the Nifty were Hindalco Industries up by 4.26%, Asian Paints up by 4.17%, Ambuja Cements up by 2.96%, ONGC up by 2.65% and Grasim Industries up by 2.12%. On the other hand, NTPC down by 1.65%, NMDC down by 1.21%, Tata Power Company down by 0.85%, Mahindra & Mahindra down by 0.82% and Power Grid Corporation of India down by 0.71% were the top losers.

European markets were trading in red, France's CAC 40 was down by 0.31%, Germany’s DAX was down by 0.01% and United Kingdom's FTSE 100 was down by 0.83%.

Asian markets ended mostly in the green terrain on Monday as sentiments remained up-beat after government data out of China showed that the Chinese trade surplus rose to a record $49.83 billion in August from $47.30 billion in July. Exports rose at a bigger than expected 9.4 percent annual pace, while imports unexpectedly fell. Meanwhile, Japanese Nikkei edged higher by around quarter a percent, benefited from the yen’s weakness, which was subdued against a firmer dollar. The greenback has been stronger in recent weeks in reaction to rate normalization expectations. On the economic front, Japan recorded a trade surplus of 416.7 billion yen in July compared to a deficit of 399.1 billion yen in June. Exports rose 8 percent year-over-year, outpacing the import growth rate at 7.6 percent. Though, revised second quarter GDP released by Japan’s Cabinet Office showed a downwardly revised 7.1 percent year-over-year drop compared to the 7 percent decline estimated earlier. On an annualized quarterly basis, GDP was down 1.8 percent, downwardly revised from preliminary estimate of the 1.7 percent drop.

Nikkei 225 was by 36.23 points or 0.23% to 15,705.11, FTSE Bursa Malaysia KLCI increased by 2.63 points or 0.14% to 1,871.09 and Jakarta Composite was up by 29.15 points or 0.56% to 5,246.48. On the flip side Straits Times was declined 6.54 points or 0.20% to 3,335.19, and Hang Seng was down by 49.70 points or 0.20% to 25,190.45.

Stock markets of China, South Korea and Taiwan remained shut for the trade today.