Markets snap the November series with impressive gains

The F&O expiry session on Thursday depicted its true trend and the benchmark indices kept moving in and out of the red terrain, though it was largely a range bound trade and traders remained cautious ahead of the release of key economic data. The government will issue gross domestic product (GDP) data for the September quarter and fiscal deficit data for October on 28 November, while the Reserve Bank of India (RBI) will announce its monetary policy on 2 December. Traders overlooked an S&P note saying that Asia-Pacific economies are losing momentum as they approach the finish line in 2014, but India is bucking the trend. Also, an another ratings agency Moody's in its report expects the country's GDP to grow at 5.3 per cent in the July-September quarter of the current fiscal, better than 4.8 per cent clocked in the year-ago period.

The global cues were mixed and while the US markets ended with modest gains overnight, most of the Asian stocks hit a one-month high on Thursday, betting on more central bank stimulus in China and Europe that could shore up the global economy, however Japanese shares retreated on a stronger yen. The European markets made a cautious but positive start ahead of a speech by European Central Bank President Mario Draghi that may give further indication on stimulus measures.

Back home, markets mood remained volatile till the end and the last hour short covering finally took the leading benchmarks end the session with gains of around a quarter percent, while posting huge gains of around 4 percent for the series. The broader markets outperformed benchmarks throughout the session and Midcaps remained an outperformer for the series as well. The realty stocks that had rallied in last session after government's approval for hike in floor area ratio (FAR) in Delhi, too witnessed some profit booking in the early trade. However, they bounced back with the Reserve Bank of India (RBI) easing norms to fund low-cost housing by permitting banks to extend loans against long-term infrastructure bonds. On the same time the PSU oil marketing companies were in a jubilant mood after Brent crude fell to a four-year low under $76.30 a barrel on Thursday as it became increasingly unlikely that Opec would cut output in support of prices.BPCL and IOC were up by about 2%, while HPCL gained over 3%. Power stocks were in most jubilant form, as the government articulated its blueprint for energy security which guarantees adequate supply at affordable prices. Power minister Piyush Goyal and oil minister Dharmendra Pradhan moved to speed up an action plan to prevent stranded gas-fired generation stations from turning into bad investments. The plan is expected to increase generation by 15%. In final hours the auto index too showed some spurt on report that government may extend excise duty concessions for carmakers beyond December 31

Finally, the BSE Sensex surged by 52.72 points or 0.19%, to 28438.91, while the CNX Nifty gained 18.45 points or 0.22% 8,494.20.

The BSE Sensex touched a high and a low of 28498.30 and 28307.58, respectively. The BSE Mid cap index was up by 0.51%, while the Small cap index was up by 0.55%.

The top gainers on the Sensex were BHEL up by 4.35%, Hindustan Unilever up by 2.71%, Hindalco up by 2.07%, Tata Power up by 1.99% and Infosys up by 1.61%. On the flip side, Bharti Airtel down by 1.91%, Tata Steel down by 1.12%, Sesa Sterlite down by 1.08%, ONGC down by 0.91% and Larsen & Toubro down by 0.89% were the top losers in the index.

On the BSE Sectoral front IT up by 1.08%, Power up by 0.78%, TECK up by 0.73%, Healthcare up by 0.64% and Auto up by 0.35% were the top gainers, while Consumer Durables down by 0.99%, Realty down by 0.30%, Metal down by 0.18%, Capital Goods down by 0.18% and Oil & Gas down by 0.02% were the top losers in the space.

Meanwhile, Indirect tax collection is likely to fall short of annual target by an estimated Rs 90,000 crore in the current fiscal, mainly because of subdued industrial activities. Indirect taxes include customs duty, central excise duty and service tax.

Indirect tax revenue during the month of October rose 7.5% to Rs 44,384 crore from Rs 41,290 crore in the corresponding month a year ago, indicating woes of economic slowdown might not be over yet. Customs collection grew 19.5% to Rs 16,800 crore in October on high imports and softening crude oil prices. Excise collection grew 1.4% to Rs 14,169 crore in October because of the slowdown in manufacturing sector even in the festival month. Services tax collection also rose 1.2% to Rs 13,415 crore.

Further, indirect tax collection so far this fiscal is 45.7% of the Budget estimate of Rs 6.23 lakh-crore. For the first seven months of FY15, customs revenue rose 7.5 % to Rs 1.06 lakh-crore, 52.6 % of the Rs 2.02 lakh-crore Budget estimate. Excise collection shrunk 1.2 % to Rs 88,330 crore, 43% of the Rs 2.05-lakh-crore estimate and, service tax collection was only 42% of the target Rs 2.16 lakh-crore.

Tax collection is the major source of revenue for the government. The Budget aims to mobilise Rs 6.23 lakh crore in FY15, which requires a growth rate of 25% over FY14. If indirect tax collection does not rise in coming months, with disinvestment and spectrum sales not forthcoming, it could become difficult for the government to contain the fiscal deficit at 4.1% of the gross domestic product (GDP) without big spending cuts. India’s fiscal deficit widened to 82.6% to cross Rs 4.38 lakh crore during April-September this fiscal as against Rs 5.31 trillion Budget Estimates for 2014-15. In the corresponding year-ago period, fiscal deficit was 76% of the budget estimate.

The CNX Nifty touched a high and low of 8,506.75 and 8,456.35 respectively.

The top gainers on Nifty were BHEL up by 5.86%, PNB up by 3.47%, Hindustan Unilever up by 2.76%, Tata Power Company up by 2.09% and HCL Technologies up by 1.93%. On the flip side, DLF down by 3.06%, Bharti Airtel down by 1.69%, Grasim Industries down by 1.59%, Ambuja Cements down by 1.33% and Tata Steel down by 1.23% were the top losers.

Most of European markets were trading in green, Germany’s DAX was up by 0.66% and United Kingdom’s FTSE 100 was up by 0.15%, while France’s CAC 40 was down by 0.18%.

Asian markets ended mixed on Thursday, the Chinese Shanghai Composite gained amid signs the Chinese government is loosening monetary policy further after cutting interest rates for the first time since 2012. China’s central bank refrained from selling repurchase agreements for the first time since July, loosening monetary policy further as a report showed industrial companies’ profits fell by the most in two years. The industrial profits in China fell 2.1 percent from a year earlier in October, the biggest decline since August 2012. However, the gross domestic product is forecast to increase 7.4 percent in 2014, down from an average 10.2 percent in the past decade.

The Japanese shares retreated, as drop in oil weighed on energy companies as well as the dollar fell against the yen for a third day, the longest streak in a month, after data raised concern the US economic recovery has plateaued. The yen rose versus most of its 16 major peers as trading patterns signaled its recent declines were excessive amid speculation traders are reducing bearish positions into month-end.