Benchmarks snap five-day losing streak; Nifty regains 8,150 mark

Snapping five days losing streak, Indian equity benchmarks staged an enthusiastic performance on Thursday, by rallying over one and a half percentage point and breaking lots of psychological levels in their northward rally. Sentiments remained positive since beginning of the trade and markets traded jubilantly throughout the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. The rally came mainly after the US Fed said it was on course to raise interest rates, though not right away. Some support also came as Russia’s rouble stabilised after dramatic falls this week, reducing some of the fears of financial contagion to emerging markets.

Sentiments also remained up-beat with cabinet approving a constitutional amendment bill to rationalise state and central indirect taxes into a harmonised goods and services tax (GST). The bill is likely to be tabled in the ongoing winter session of Parliament that concludes on December 23. Also, the Asian Development Bank has said that India is on track to achieve projected 5.5 percent economic growth rate in 2014-15 as declining oil prices present a golden opportunity for many beneficial reforms.

Global cues too remained supportive with European counters making a jubilant start and Asian markets ending mostly in the green, tracking a rally on Wall Street after the US Federal Reserve gave an upbeat assessment of the economy and said it would take a patient approach towards raising interest rates.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle near intraday high levels with Sensex and Nifty recapturing their crucial 27,100 and 8,150 levels respectively. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 63.15 at the time of equity markets closing as compared to Wednesday’s close of 63.61.

Meanwhile, stocks related to Real estate sector traded jubilantly after the Cabinet deferred a decision on setting up a regulator for the sector. Metals and power stocks remained on buyers’ radar after the government came out with draft rules for e-auction of 101 (higher from 92 earlier) cancelled coal mines in the first phase, fixing a floor price of Rs 150 per tonne for sectors like steel, sponge iron, cement and captive power. Additionally, shares of sugar companies edged higher after the government ratified the methodology used for fixing the export subsidy on raw sugar during April-September period of the 2013-14 marketing year.

The NSE’s 50-share broadly followed index Nifty rose by around one hundred and thirty points and ended above the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over four hundred and ten points to finish above the psychological 27,100 mark. Broader markets too were traded with traction and ended the session with a gain of around three percentage points. The market breadth remained in favour of advances, as there were 2,172 shares on the gaining side against 683 shares on the losing side while 96 shares remain unchanged.

Finally, the BSE Sensex surged by 416.44 points or 1.56%, to 27126.57, while the CNX Nifty soared by 129.50 points or 1.61% to 8,159.30.

The BSE Sensex touched a high and a low of 27180.92 and 26900.57, respectively. The BSE Mid cap index was up by 2.66%, while the Small cap index was up by 3.28%.

The top gainers on the Sensex were BHEL up by 4.91%, Hindalco up by 4.31%, GAIL India up by 4.19%, Maruti Suzuki up by 3.91% and NTPC up by 3.83%. On the flip side, Mahindra & Mahindra down by 0.46%, Dr. Reddys Lab down by 0.31% and Hindustan Unilever down by 0.05% were the only losers.

On the BSE Sectoral front Consumer Durables up by 5.26%, Power up by 3.26%, INFRA up by 3.18%, Capital Goods up by 2.78% and Bankex up by 2.49% were the top gainers, while there were no losers in the space. 

Meanwhile, with an aim to produce globally competitive products, India is planning to set up reverse special economic zones (SEZs) in Iran, mainly in the fertiliser and petrochemical sector. India is keen to explore the possibilities of setting up of reverse SEZs under which domestic firms mainly related to fertiliser and petrochemical sector will be encouraged to set up plants in other countries where raw material is in abundance and available at cheaper rates, while the final product will be imported back.

Minister of Chemicals and Fertilizers Ananth Kumar has asserted that a Joint Working Group between India and Iran in these areas with officials from both the countries will work out a roadmap for cooperation. Meanwhile, some state-run firms include RCF and GNFCL are already working on a proposal to set up a urea-ammonia plant.

The Ministry is of the view that Iran could be an ideal place to start reverse SEZ project since many refineries in India already import crude from Iran and have working business relationship with Iranian companies. Meanwhile, India is also likely to extend the reverse SEZs project to Myanmar and Mozambique as these countries have abundance of oil and gas resources, a key feedstock for petrochemicals and petroleum industry.

The CNX Nifty touched a high and low of 8,174.30 and 8,084.90 respectively.

The top gainers on Nifty were Jindal Steel & Power up by 7.83%, Bharat Heavy Electricals up by 5.53%, Bank of Baroda up by 5.12%, Cairn India up by 5.06% and ICICI Bank up by 4.35%. On the flip side, Grasim Industries down by 0.81%, Mahindra & Mahindra down by 0.65%, UltraTech Cement down by 0.36%, Hindustan Unilever down by 0.33% and Coal India down by 0.01% were the only losers.

European markets were trading in green, France’s CAC 40 was up by 2.34%, Germany’s DAX was up by 1.92% and United Kingdom’s FTSE 100 was up by 0.75%.

The Asian equity benchmarks ended mostly in green on Thursday, after the Federal Reserve pledged patience on interest-rate increase and the yen weakened. China’s foreign exchange regulator expressed concerns over the devaluation of the Russian ruble, asking Chinese entities to take measures to avoid risks. China’s economy showed mild signs of stabilization in the fourth quarter but corporates remained cautious on investment, a business survey found, highlighting stubborn resistance to efforts from Beijing to reinvigorate growth. China’s new home prices fell again in November and a business survey showed a deep drop in real estate investment plans, adding gloom to a slumping property market that has so far defied government efforts to revive it. Average home prices in 70 major Chinese cities fell by an annual 3.7% last month following a 2.6% fall in October, the biggest drop since 2011 and a threat to economic growth.

Japan will spend up to $30 billion in a stimulus package to revive the country’s regions but will keep new bond issuance in check, highlighting the tough balance Prime Minister Shinzo Abe must strike between lifting growth and fixing Tokyo’s tattered finances. A finance ministry’s key fiscal panel has called for drastic steps to cut government spending and secure revenue to meet Tokyo’s aim of halving the primary budget deficit next year, describing the goal as quite difficult. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to the preceding month.