Benchmarks log fresh record highs; Nifty surpasses 8,400 mark

17 Nov 2014 Evaluate

Indian equity benchmarks staged a smart recovery in last leg of trade on Monday and ended the session in green with a gain of around half a percent, supported by short-covering in beaten down but fundamentally strong stocks. Earlier in the day, after opening in red, key benchmark indices languished in the negative territory till early noon trades. The indices even went on to test important psychological 27,900 (Sensex) and 8,350 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon.

Sentiments turned positive after data showed that trade deficit narrowed to $13.35 billion in October from $14.25 billion in the previous month on the back of decline in oil imports. India's imports fell to $39.45 billion from $43.15 billion in September, but on a year-on-year basis, it has increased 3.16 percent. Meanwhile, exports in October hit lowest level since March 2014. It fell to $26.09 billion from $28.90 billion last month. On a year-on-year basis, the fall has been to the tune of 5.04 percent. Some support also came on report that Services exports rose 5.3 per cent to $ 12.94 billion in September this year compared to the same month last year. Meanwhile, industry chamber Assocham has suggested that government must use the opportunity to integrate proposed Foreign Trade Policy with the ‘Make in India’ programme.

However, global cues remained somber with European markets were trading in the red in early deals hit by concern over the pace of global growth after data showed Japan, the world’s third-largest economy, unexpectedly slipped into recession. Asian markets ended mostly lower led by 3% fall in Japanese benchmarks as the country’s economy shrank an annualized 1.6 per cent in July-September, following a 7.3 per cent drop in the second quarter in the wake of a sales tax hike that clobbered consumer spending.

Back home, sentiments remained up-beat on report that foreign institutional investors were net buyers in Indian equities worth Rs 645.90 crore on Friday, as per provisional stock exchange data. Meanwhile, shares of gold jewellery remained on buyers’ radar after reports suggested of RBI was in talks with govt to increase gold import curbs. October gold shipments to India, jumped to about 150 tonnes from less than 25 tonnes a year earlier and 143 tonne in September. Besides, sugar stocks too edged higher after the department of food estimated a total production of 25 million tonnes of sugar in the new sugar season starting October 2014 -September 2015, similar to the production level last year, which is higher than the first advance estimate of 24.5 mn tonne and the increased production is estimated due to higher acreage in Maharashtra and Karnataka and carries over stock of 3-4 lakh tones.

The NSE’s 50-share broadly followed index Nifty gained over forty points to end above the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and thirty points to end above the psychological 28,150 mark. Broader markets too traded with traction throughout the session and ended the today’s trade in the green with a gain of around a percent. The market breadth remained in favour of advances, as there were 1622 shares on the gaining side against 1441 shares on the losing side while 83 shares remain unchanged.

Finally, the BSE Sensex surged by 131.22 points or 0.47%, to 28177.88, while the CNX Nifty soared by 40.85 points or 0.49% to 8,430.75.

The BSE Sensex touched a high and a low of 28205.71 and 27921.34, respectively. The BSE Mid cap index was up by 0.91%, while the Small cap index was up by 1.07%.

The top gainers on the Sensex were SBI up by 5.44%, Tata Motors up by 4.07%, Hero MotoCorp up by 2.15%, NTPC up by 1.71% and Reliance Industries up by 1.47%. On the flip side, ICICI Bank down by 1.27%, HDFC Bank down by 1.05%, Coal India down by 0.95%, Sesa Sterlite down by 0.92% and Mahindra & Mahindra down by 0.67% were the top losers in the index.

On the BSE Sectoral front Infrastructure up by 1.85%, Power up by 1.54%, Auto up by 1.43%, PSU up by 1.41%, Consumer Durables up by 0.91% were the top gainers, while Metal down by 0.55% and Healthcare down by 0.15% were the only losers in the space.

Meanwhile, Services sector which contributes more than 50% to the country’s gross domestic product (GDP) has witnessed its exports rising by 5.3 per cent to $ 12.94 billion in September this year compared to the same month last year. In August 2014, services exports were at $ 12.24 billion.

Import of services during the month of September fell by 9.1 per cent to $ 6.17 billion against the year-ago period, while they increased by 7.5 per cent at $ 6.77 billion in August over the year-ago month. The cumulative receipts of exports in services during April-September stood at $ 79.05 billion, while cumulative payments (or imports) were at $ 43.04 billion.

The government has been prioritizing the sector and the finance minister Arun Jaitley calling services sector is a low-hanging fruit has said that India needs to be aggressive in its approach while expanding services exports. Jaitley had pointed out that sectors such as healthcare, tourism, research and development, education and entertainment have enormous potential.

While service exports were at $151.47 billion in 2013-14, merchandise exports were more than double at $312.61 billion. However, India's share in the world services exports was only 3% as compared to EU's share of 42% and China's 4%. RBI releases the provisional aggregate monthly data on India’s international trade in services with a lag of 45 days. The monthly data on services are provisional and generally undergo revision when the balance of payments (BoP) data are released on a quarterly basis.

The CNX Nifty touched a high and low of 8,438.10 and 8,349.10 respectively.

The top gainers on Nifty were State Bank of India up by 5.53%, Bank of Baroda up by 4.36%, Tata Motors up by 4.06%, Asian Paints up by 2.84% and PNB up by 2.67%. On the flip side, Jindal Steel & Power down by 3.19%, DLF down by 2.39%, UltraTech Cement down by 2.14%, NMDC down by 1.78% and Tech Mahindra down by 1.63% were the top losers.

European markets were trading in red, France’s CAC 40 was down by 0.29%, Germany’s DAX was down by 0.47% and United Kingdom’s FTSE 100 was down by 0.46%.

Asian markets ended mostly in red on Monday, as Japan's economy unexpectedly fell into recession and Hong Kong shares slid as a trading link with Shanghai started. Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election two years before he had to go to the polls. Gross domestic product (GDP) shrank by an annualized 1.6 percent in July-September, after plunging 7.3 percent in the second quarter following a rise in the national sales tax, which clobbered consumer spending. The recession comes nearly two years after Abe returned to power promising to revive the economy with his ‘Abenomics’ mix of massive monetary stimulus, spending and reforms, and is unwelcome news for an already shaky global economy. The world’s third-largest economy had been forecast to rebound by 2.1 percent, but consumption and exports remained weak, saddling companies with huge inventories to work off. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3%, compared to the preceding month. Thai GDP rose to a seasonally adjusted 0.6%, from 0.4% in the preceding month.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2474.01	-4.82	-0.19
Hang Seng	23797.08	-290.30	-1.21
Jakarta Composite	5053.94	4.46	0.09
KLSE Composite	1806.48	-7.31	-0.40
Nikkei 225	16973.80	-517.03	-2.96
Straits Times	3288.67	-27.00	-0.81
KOSPI Composite	1943.63	-1.51	-0.08
Taiwan Weighted	8884.39	-98.49	-1.10

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Benchmarks log fresh record highs; Nifty surpasses 8,400 mark

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