Post Session: Quick Review

Markets rebounded sharply after two consecutive session of fall on Thursday, which lifted both Sensex and Nifty above psychologically crucial 26,500 and 7,950 levels respectively, with hefty gains of around 1.50% after Fed's September meeting minutes released late on Wednesday suggested it was in no hurry to raise rates, which increased the appeal of all the emerging markets assets, including local equities. Notably, these gains came ahead of the release of August IIP data and Infosys’ September quarter earnings tomorrow, hinting of a potential positive surprise being in store. Meanwhile, sentiments were also buoyed after the International Monetary Fund (IMF), akin to World Bank, raised the country's growth forecast to 5.6% for 2014 from its earlier estimate of 5.4% and forecasted a higher 6.4% growth in 2015 on the back of renewed confidence in the market due to a series of economic reforms pursued by the new Government. Throughout the session, the markets went from strength to strength and end at day’s highest point on sustained buying activities by funds and retail investors. Meanwhile, broader indices also participating into the broad-based rally, went home with gains over 1.50%-2.00%.

On the global front, Asian pacific and European shares rallied on expectations that the U.S. Federal Reserve will keep interest rates low for a longer period. Meanwhile, European shares also rebounded sharply from two months low which on account of weak-run of German economic data, which added to fears that the region’s economy is stagnating.

Closer home, all the sectoral indices on BSE ended into positive territory, nevertheless prominent gainers included Banking, Realty and Power counters. In stock-specific activity, Sugar stocks were the flavor of the session after the government was prepared to extend export subsidy and give additional interest-free loans to clear cane arrears, if the mill owners could furnish the government the guarantee to pay cane arrears to the farmers. Shares of ITC, L&T and Axis Bank rose on buzz of stake sale by the government in these companies. The market breadth on the BSE remained in the favour of advances; where advancing and declining stocks were in a ratio of 1998:941, while 102 scrips remained unchanged. (Provisional)

The BSE Sensex ended higher by 360.30 points or 1.37% at 26607.09 after trading in a range of 26394.21 and 26688.70. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.82%, while Small cap index up by 1.54%. (Provisional)

The gaining sectoral indices on the BSE were Capital Goods up by 3.01%, Bankex up by 2.41%, Realty up by 2.27%, Power up by 2.25% and Metal up by 1.76%, while there were no losers on the BSE sectoral index. (Provisional)

The top gainers on the Sensex were BHEL up by 8.44%, Hindalco up by 5.85%, SBI up by 2.66%, ICICI Bank up by 2.62% and Larsen & Toubro up by 2.59%. On the flip side, Wipro down by 0.75%, Mahindra & Mahindra down by 0.61%, NTPC down by 0.52% and ITC down by 0.22% were the top losers. (Provisional)

Meanwhile, the Government has announced that its ambitious Smart City project will be primarily driven by private sector and some hilly regions will be part of the scheme.

Urban development secretary Shankar Aggarwal asserted that the project will be executed in PPP model and the government will contribute as viable gap funding (VGF) for the project. By adding further, the Minister revealed that the government is in the process of identifying cities to be part of the Smart Cities project and the process will be completed in a month. All state capitals, union territories and satellite towns of all metros would be included in the smart city list and the scheme would be rolled out in the next six months.

The new government’s first budget had announced a mega project of developing 100 smart cities with modern amenities over the years. Smart City entails facilities like modern sewerage system, continuous water supply, solid waste management and infrastructure development among other advanced facilities. Total expected investment requirements for providing these services is around Rs 7.5 lakh crore over 20 years which means the government requires Rs 35,000 crore in a year.

India VIX, a gauge for markets short term expectation of volatility declined 6.78% at 13.15 from its previous close of 14.11 on Wednesday. (Provisional)

The CNX Nifty ended higher by 117.85 points or 1.50% at 7960.55 after trading in a range of 7886.50 and 7972.35. There were 41 stocks advancing against 9 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 8.39%, Hindalco up by 6.08%, Zee Entertainment up by 4.94%, Ambuja Cement up by 3.65% and ACC up by 3.54%. On the flip side, Tech Mahindra down by 2.49%, Wipro down by 1.06%, NMDC down by 0.56%, BPCL down by 0.44% and NTPC down by 0.35% were the top losers. (Provisional)

European Markets were trading in the green; UK’s FTSE 100 was up 0.45%, France’s CAC was up 1.12% and Germany’s DAX was up by 0.52%.

All the Asian equity indices, barring Japanese Nikkei, ended the Thursday’s trade in the green terrain. The sentiment remained up-beat after minutes of the September 16-17 FOMC meeting offered a dovish outlook for U.S. monetary policy, with some Fed officials expressing concerns about global economic weakness and the impact of a stronger U.S. dollar. Meanwhile, Chinese Shanghai edged higher by over quarter a percent to end near a 20-month high, as investors looked forward to trade and inflation data due next week. Moreover, investor sentiment got a boost after Premier Li Keqiang said the government would launch some key projects in areas such as water conservation and environmental protection this year to support economic growth.

However, Japanese Nikkei ended lower, erasing earlier gains as the yen hit a three-week high against the dollar. On the economic front, Japanese core machinery orders climbed 4.7 percent in August from the previous month, government data showed, exceeding forecasts for an increase of 0.5 percent. The leading gauge of capital spending rose for the third straight month, helping ease concerns the economy is losing traction.