Benchmarks end at record closing highs; Sensex surpasses 28,000 mark intraday

Resuming their northward journey, Indian equity benchmarks ended the Wednesday’s trade at record closing high levels with Sensex surpassing its crucial 27,900 bastion, while Nifty ending tad below its crucial 8,350 mark. Overall, sentiments remained up-beat on falling global crude oil prices which dipped to its lowest closing point since October 2011. Besides, World Bank’s report, which recently ranked India 142nd in its ease of doing business list, saying the ranking will improve by at least 50 notches if one includes the best practices followed at the state level, also influenced the trading sentiment. Some support also came after foreign portfolio investors bought shares worth a net Rs 1413.34 crore during the previous trading session on Monday as per provisional data released by the stock exchanges. Meanwhile, there was some buzz in PSU sector after Finance Minister Arun Jaitley said that the government is open to privatisation of certain loss-making public sector companies.

However, up-side remained capped as investors remained cautious on the National Council of Applied Economic Research’s (NCAER) latest projection, where it has lowered India’s GDP growth forecast to 5 percent in the current financial year on weak economical fundamentals and uncertainties in growth prospects. On the macro economic front, the disappointing services PMI data dampened the investor sentiment. Growth in India’s dominant service industry stalled last month as new orders came in at a weaker pace, adding to pressure on the government to drive through economic reforms. The HSBC Purchasing Managers’ Index (PMI) fell to 50 in October from September’s 51.6, the lowest in six months and right on the break-even point between growth and contraction.

Global cues too remained supportive with European markets making a green start, reversing most of the previous session's losses, as a raft of positive results from companies. However, Asian markets ended mostly in the red after China’s Services Purchasing Managers Index fell to 52.9 from 53.5 in September. Though, Japanese Nikkei rose to new seven-year highs as heavyweight Fast Retailing Co surged on strong monthly sales, while exporters got a boost as the dollar rose against the yen after US mid-term election results showed Republicans made major gains.

Back home, banks which are a proxy to the economy witnessed buying interest from investors after global rating agency Standard & Poor’s (S&P) upgraded  India’s credit outlook to ‘stable’ from ‘negative’. Additionally, fertilizer stocks edged higher on reports that the Fertilizer Ministry has invited fresh proposals for setting up urea plants as well as increasing the capacity of existing ones under the recently notified New Urea Investment Policy for increasing domestic production. On the flip side, shares of most of the frontline automobiles companies continue to trade in red after reporting drop in vehicle sales during the month of October.

The NSE’s 50-share broadly followed index Nifty gained over ten to end above the psychological 8,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over fifty points to surpass the psychological 27,900 mark. Broader markets too traded with traction and ended the session with gain of around half a percent. The market breadth remained in favour of advances, as there were 1634 shares on the gaining side against 1382 shares on the losing side while 109 shares remain unchanged.

Finally, the BSE Sensex gained 55.50 points or 0.20% to 27,915.88, while the CNX Nifty gained 14.15 points or 0.17% to 8,338.30.

The BSE Sensex touched a high and a low of 28010.39 and 27857.65, respectively. The BSE Mid cap index was up by 0.23%, while the Small cap index gained 0.76%.

The top gainers on the Sensex were Axis Bank up by 2.93%, SBI up by 2.24%, Dr. Reddys Lab up by 2.24%, Sun Pharma Inds up by 2.10% and ICICI Bank up by 1.84%. On the flip side, Hindalco down by 4.10%, Sesa Sterlite down by 3.79%, Coal India down by 3.15%, Bharti Airtel down by 2.70% and Tata Steel down by 2.29% were the top losers.

On the BSE Sectoral front Bankex up by 1.41%, IT up by 0.73%, Healthcare up by 1.01%, Capital Goods up by 0.57% and FMCG up by 0.32%, while Metal down by 3.03%, Power down by 0.91%, Infrastructure down by 0.86%, Oil & Gas down by 0.66%, PSU down by 0.40% were the top losers in the space.

Meanwhile, the existing foreign trade policy is likely to continue till the end of this year as the Directorate General of Foreign Trade (DGFT) has floated an internal proposal for extending the current FTP provisions till December 31. Now, the Government is examining the option to address uncertainties faced by exporters due to delay in the new policy. 

The FTP includes both an annual plan and a five-year long-term policy. Though FTPs are usually announced soon after the Union Budget is presented, the new Government, which came in power in May, has not yet been able to do so. Heavy work agenda of Commerce Ministry and elections in a number of States have resulted in the delay to present new FTP. The delay in new FTP has started impacting domestic exports as exporters are unsure about the continuity of the existing export incentive schemes, like the focus product and focus market schemes, which give them a competitive edge in the global market. After recording a double-digit growth in May and June, export growth slowed down in subsequent months with a growth rate of just 2.73 percent in September.

Although most of the existing incentive schemes will continue till a new policy is announced. Therefore, a formal extension of the schemes is required to provide confidence to exporters that the schemes will not change before the given date.

The CNX Nifty touched a high and low of 8,365.55 and 8,323.50 respectively.

The top gainers on Nifty were Axis Bank up by 2.85%, BPCL up by 2.24%, Dr. Reddys Lab up by 2.22%, HCL Tech up by 2.18% and SBI up by 2.15%. On the flip side, Cairn India down by 4.97%, Jindal Steel & Power down by 4.50%, Sesa Sterlite down by 4.35%, Hindalco down by 4.31% and NMDC down by 3.89% were the top losers.

European markets were trading in green, France’s CAC 40 was up by 1.16%, United Kingdom’s FTSE 100 was up by 0.90% and Germany’s DAX was up by 1.17%.

Asian markets ended mostly in red on Wednesday, with China’s stocks dropping for the first time in seven days on concern that recent gains were excessive of valuations. Bank of Japan Governor Haruhiko Kuroda stated that reaching a sustained level of 2% inflation in two years is a hard task for any central bank but Japan needs to find a way end a deflationary spiral. Kuroda added that the BoJ board’s projection in its latest semi-annual outlook report released has been revised down slightly; CPI inflation is still projected as likely to reach around 2% in or around fiscal 2015. He also lauded a weaker yen as benefiting exports and stated that it reflects Japan’s fundamentals. Indonesian GDP fell to a seasonally adjusted annual rate of 5.01%, from 5.12% in the preceding month. Taiwanese CPI fell to a seasonally adjusted annual rate of -0.18%, from 0.10% in the preceding quarter. Philippines CPI rose to a seasonally adjusted annual rate of 0.1%.