Benchmarks end higher on Monday

Monday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of over half a percent. Barometer gauges, after a gap-up opening, traded in tight band throughout the session with frontline gauges ending near their crucial 27,400 (Sensex) and 8,250 (Nifty). Overall sentiments remained up-beat on report that overseas investors poured in $2 billion in the Indian capital markets this month so far, taking total inflows to $42 billion since January this year. Improvement in the macroeconomic situation and investor sentiment on account of a series of steps taken by the new government helped attract higher FDI.

Some support also came from reports that the Narendra Modi government is set to unleash several big-ticket announcements over the next few weeks, starting with changes in the land acquisition law through an ordinance. Further, Finance Minister Arun Jaitley’s comment that the economy is expected to grow ‘much better’ in 2015-16 as compared with the current financial year also boosted sentiment. He pointed that while Indian economy is expected to grow by 5.3 percent in the September quarter from a year earlier, it would grow 5.5% in the current financial year that ends on March 31.

On the global front, European markets were trading mostly in the red in early deals ahead of the final round of voting in a Greek presidential election. If Prime Minister Antonis Samaras' preferred candidate fails to gain the 180 votes needed to win the election, a snap general election will be called. However, Asian markets ended mostly in the green, buoyed by share gains in the US and new bank rules in China that will help spur lending.

Back home, sentiments also got some boost on reports that foreign institutional investors were net buyers in Indian equities to the tune of Rs 40 crore on December 26, 2014. Meanwhile, metal and mining stocks remained on buyers’ radar on reports of China’s central bank adjusting deposits calculation rules. Stocks related to infrastructure too edged higher on reports that the government plans to exclude 13 central laws to clear several infrastructure and public private partnership projects. Additionally, software and technology counters traded jubilantly as rupee edged lower against the dollar. The rupee was at 63.68 per dollar at the time of equity markets closing as compared to 63.56 per dollar level on Friday.

The NSE’s 50-share broadly followed index Nifty gained over forty points to end near the psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and fifty points to end near the psychological 27,400 mark. Broader markets too traded in-line with benchmarks and ended the session with a gain of over half a percent. The market breadth remained in favour of advances, as there were 1617 shares on the gaining side against 1307 shares on the losing side while 112 shares remain unchanged.

Finally, the BSE Sensex surged by 153.95 points or 0.57%, to 27395.73, while the CNX Nifty gained 45.60 points or 0.56% to 8,246.30.

The BSE Sensex touched a high and a low of 27507.25 and 27266.49, respectively. The BSE Mid cap index was up by 0.87%, while the Small cap index was up by 0.53%.

The top gainers on the Sensex were Sesa Sterlite up by 3.81%, Hindalco up by 3.22%, Coal India up by 2.22%, Tata Motors up by 2.04% and Hero MotoCorp up by 1.86%.On the flip side, Bharti Airtel down by 0.80%, ICICI Bank down by 0.46%, Mahindra & Mahindra down by 0.27%, Axis Bank down by 0.21% and SBI down by 0.08% were the top losers.

On the BSE Sectoral front Metal up by 2.36%, Auto up by 1.50%, Consumer Durables up by 1.02%, HEALTHCARE up by 0.87% and FMCG up by 0.77% were the top gainers, while Bankex down by 0.15% was the only loser in the space. 

Meanwhile, with an aim to fast track the reforms process, the government, after approving key reforms for coal and insurance sectors recently through ordinance route, may soon take the same route to pave the way for auction of iron ore and other minerals as the proposed amendments to the MMRDA Act have been pending since long. 

As mining sector is one of the chosen segments for the ‘Make in India’ programme,  the government has planned to circulate the new bill seeking promulgation of ordinance for bringing changes in Mines and Minerals (Development and Regulation) Act, 1957. A large number of mines have remained shut and the Mines Ministry is of the view that due to absence of a set of guidelines, the government is unable to take decisions. Meanwhile, the ordinance will pave the way for decision-making. 

Mines Ministry has prepared a draft amendment Bill and is now considering moving a proposal to the Cabinet to adopt the ordinance route as the Winter Session of Parliament is over. The Bill sought to introduce competitive bidding through the auction route for iron ore and other minerals and also focuses on attracting private investment and latest technology and eliminating delay in administration. Meanwhile, the provisions for the auction route for the allocation of mines and creation of District Mineral Fund for the welfare of the project-affected people would remain. The Ordinance would also provide for greater decentralization of power to states for allocation of resources. 

The CNX Nifty touched a high and low of 8,279.15 and 8,214.70 respectively.

The top gainers on Nifty were Asian Paints up by 4.36%, Sesa Sterlite up by 4.14%, Jindal Steel & Power up by 4.12%, Hindalco Industries up by 3.22% and Tata Motors up by 2.13%. On the flip side, PNB down by 1.33%, Cairn India down by 1.10%, Bharti Airtel down by 0.95%, Kotak Mahindra Bank down by 0.64% and DLF down by 0.59% were the top losers.

Most of European Markets were trading in red; UK’s FTSE 100 was up by 0.05% while, France’s CAC was down by 0.41% and DAX was down by 0.87%.

The Asian equity benchmarks ended mostly in green on Monday, with Hong Kong shares jumping the most in a year amid speculation that government steps to spur lending will bolster economic growth. Japan’s government approved a 3.5 trillion yen ($29 billion) fiscal stimulus package to boost the economy after April’s sales tax hike caused consumption to slump. The measures include shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses hurt by rising input costs, and will boost gross domestic product by 0.7%, the government estimates. Unexpected falls in output and retail sales in November underscore the continued weakness in the economy. With little sign of a rebound in domestic demand, getting growth back on a recovery track is a priority for Prime Minister Shinzo Abe.

China’s trade growth is seen falling short of target in 2014. According to a report by the Ministry of Commerce, the country’s trade will grow 3.5% in 2014, implying the country will fall short of a current 7.5% official growth target. China’s trade figures have repeatedly fallen short of expectations in the second half of this year, providing more evidence that China’s economy may be facing a sharper slowdown. Thai Industrial Production fell to a seasonally adjusted -3.5%, from -2.9% in the preceding month.