Benchmarks log fresh record highs; Sensex surpasses 28,300 mark

Boisterous benchmarks showcased an enthusiastic performance on Friday, by rallying around a percentage point. Markets, after a flat opening, gained ground 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 their hunt for fundamentally strong stocks. Frontline indices not only extended their rally for second straight session but also recorded their all time closing highs, settling comfortably above their crucial 8,450 (Nifty) and 28,300 (Sensex) bastions on account of strong buying in rate sensitive sectors like banks, auto, realty and select metal shares.

Sentiments remained up-beat on fresh capital inflows led by a series of economic reforms announced recently by the government. Also, some support came after Finance Minister Arun Jaitley on Thursday asked the chiefs of public sector banks (PSBs) to increase the flow of credit to various sectors of the economy without being unduly conservative and firmly deal with the issue of rising non-performing assets (NPAs). Moreover, investors will watch out for Monday as the parliament convenes its winter session in which the government is confident of passing legislation to allow more foreign investment in the insurance industry.

Rally in European markets too supported the sentiments with CAC, DAX and FTSE were trading with a gain of around a percent in early deals with traders awaiting speeches from the European Central Bank policymakers for clues as to whether more stimulus may be under way. Speculation about more stimulus from the ECB, pinned on comments by Draghi earlier this week, boosted sentiments. Asian markets shut shop mostly in the green, led by rally in Chinese Shanghai composite as pressure of profit-booking eased and fresh buying was seen in casino stocks. Moreover, Japanese shares edged up after PM Shinzo Abe dissolved parliament's lower house in preparation for an election in which he will seek a fresh mandate for his struggling economic revival strategy.

Back home, International ratings agency Moody’s Investors Service has revised outlook of the country’s non-financial corporates to stable from negative in view of momentum in economic recovery and political stability. Moreover, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 61.81 per dollar at the time of equity market closing against the Thursday’s close of 61.94 on the Interbank Foreign Exchange.

Meanwhile, banking shares public as well as private sectors were in demand after Kotak Mahindra Bank agreed to acquire ING Vysya Bank to create India’s fourth largest private bank. Additionally, shares of companies related to rail business edged higher on reports that the government has released its first order for railway wagons. On the flip side, rupee recovery from eight and half month lows weighed on software and technology stocks.

The NSE’s 50-share broadly followed index Nifty ended higher by around eighty points to end above its psychological 8,450 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by around two hundred and seventy points to above the psychological 28,300 mark. The broader markets, however, struggled to get any traction and ended the session slightly in the red. The market breadth remained in favour of decliners, as there were 1,375 shares on the gaining side against 1,635 shares on the losing side while 120 shares remain unchanged.

Finally, the BSE Sensex surged by 267.07 points or 0.95%, to 28334.63, while the CNX Nifty soared by 75.45 points or 0.90% 8,477.35.

The BSE Sensex touched a high and a low of 28360.66 and 28038.40, respectively. The BSE Mid cap index was down by 0.08%, while the Small cap index was down by 0.10%.

The top gainers on the Sensex were BHEL up by 3.00%, SBI up by 2.68%, ICICI Bank up by 2.66%, Hindalco up by 2.63% and Axis Bank up by 2.17%. On the flip side, Infosys down by 1.79%, Tata Power down by 1.45%, Sun Pharma down by 1.03%, Hindustan Unilever down by 0.92% and Tata Steel down by 0.89% were the top losers in the index.

On the BSE Sectoral front Bankex up by 2.37%, Capital Goods up by 1.32%, FMCG up by 0.90%, Oil & Gas up by 0.86% and Consumer Durables up by 0.84% were the top gainers, while IT down by 0.72%, TECK down by 0.46% and Healthcare down by 0.33% were the only losers in the space.

Meanwhile, the government has approved rural electrification scheme Deendayal Upadhyaya Gram Jyoti Yojana, which would replace the existing Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and would entail an investment of Rs 43,033 crore. The balance work relating of the ongoing scheme of RGGVY till 2022 will get subsumed in this scheme as a distinct component for rural electrification and the Cabinet Committee on Economic Affairs (CCEA), for this purpose, has already approved the scheme cost of Rs 39,275 crore including budgetary support of Rs 35,447 crore. This outlay will be carried forward to the new scheme of DDUGJY in addition to the outlay of Rs 43,033 crore.

The scheme is aimed at strengthening and augmentation of sub transmission and distribution infrastructure in rural areas, including metering of distribution transformers and feeders.  It would have components to separate agriculture and non-agriculture feeders facilitating judicious rostering of supply to agricultural and non-agricultural consumers in rural areas.

The estimated cost of the scheme for two components of Rs 43,033 crore, includes the requirement of budgetary support of Rs 33,453 crore from the government over the entire implementation period.

Further, the scheme is likely to work towards improvement in hours of power supply in rural areas, reduction in peak load and improvement in billed energy based on metered consumption and providing access to electricity to rural households.

The CNX Nifty touched a high and low of 8,489.80 and 8,398.60 respectively.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.70%, BHEL up by 2.93%, ICICI Bank up by 2.86%, State Bank of India up by 2.83% and Hindalco Industries up by 2.69%. On the flip side, Jindal Steel & Power down by 2.56%, Infosys down by 1.93%, Tata Power Company down by 1.68%, Sun Pharmaceuticals Industries down by 1.36% and Tech Mahindra down by 1.28% were the top losers.

European markets were trading in green, France’s CAC 40 was up by 1.07%, Germany’s DAX was up by 1.43% and United Kingdom’s FTSE 100 was up by 0.34%.

Asian markets ended mostly in green on Friday, amid signs the US economy is improving and speculation that China will take steps to prevent a cash crunch before initial public offerings next week. The People’s Bank of China has added money to the banking system as a cash shortage stemming from new share sales drove the benchmark money-market rate up by the most since July. Japan’s stocks rose for a fourth day, as Prime Minister Shinzo Abe dissolved parliament ahead of elections. Abe also scuppered plans for a second increase in the sales tax as he tries to salvage his reform program after data showed Asia’s second-largest economy is in recession. Japanese household investors are putting their money into notes linked to fluctuations in the Indonesia rupiah for the first time as unprecedented Bank of Japan stimulus drags down the yen. Japan’s trade balance rose to a seasonally adjusted -0.98T, from -1.07T in the preceding month.