Benchmarks bid adieu 2014 on an optimistic note; garner 30% gains in CY’14

Indian equity indices concluded the last trading session of calendar year 2014 in the green terrain and garnered massive gains of around thirty per cent on annual basis. After a cautious start, domestic gauges traded with strength throughout the session and ended near their intraday high levels. Sentiments got some support with the government stating that to boost manufacturing sector, it intends to develop industrial corridors and smart cities for providing infrastructure based on modern technology with high-speed communication. While, there is good news for foreign investors too, as the government in its quest for attracting maximum foreign investment, has amended the Arbitration Act to make it mandatory for a judge presiding over commercial disputes to settle cases within nine months. Meanwhile, the Government, based on the recommendations of Foreign Investment Promotion Board (FIPB), has cleared eight Foreign Direct Investment (FDI) proposals worth about Rs 34.77 crore. The proposals include that of CSC Computer Sciences International Operations and Life Positive.

Rally got extended after European counters made a positive on Wednesday in a shortened trading session, with many of the region’s markets either closed or having only a half-day. Asian markets ended mostly in the green on Wednesday, led by Chinese market which rose over two percent despite country’s factory gauge sinking to a seven-month low in December.

Back home, sentiments remained up-beat on report that foreign institutional investors were net buyers in Indian equities worth Rs 277.92 crore on Tuesday, as per provisional stock exchange data. Appreciation in Indian rupee too aided the sentiments. The partially convertible rupee was trading at 63.14 per dollar at the time of equity market closing against the Tuesday’s close of 63.38 on the Interbank Foreign Exchange.

Meanwhile, power and infra stocks extended previous session’s gains witnessed after  Union Cabinet approved an ordinance to amend the contentious land acquisition act, which would relax some limitations including a 'consent clause' which so far has acted as obstacle for power, highways, housing, defence and infrastructure projects, thereby holding up the economy's growth potential. Telecom stocks too remained on buyers’ radar after regulator Telecom Regulatory Authority of India recommended a base price of Rs 2720 crore per Mhz for pan India 3G spectrum. Additionally, stocks of Defence equipment makers edged higher after Union defence minister reportedly said changes in the Defence Procurement Policy to legalise representatives from foreign defence firms will be done in another month and a half. On the flip side, Auto shares ended lower after the Finance Ministry decided not to extend excise duty cuts on automobiles and consumer durables beyond December 31.

The NSE’s 50-share broadly followed index Nifty ended higher by over thirty points to end above its psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over ninety points to end near the psychological 27,500 mark. The broader markets traded jubilantly during the trade and ended the session with a gain of over a percentage point. The market breadth remained in favour of advances, as there were 1,692 shares on the gaining side against 1,177 shares on the losing side while 123 shares remain unchanged.

Finally, the BSE Sensex surged by 95.88 points or 0.35%, to 27499.42, while the CNX Nifty gained 34.45 points or 0.42% to 8,282.70.

The BSE Sensex touched a high and a low of 27527.24 and 27346.00, respectively. The BSE Mid cap index was up by 1.11%, while the Small cap index was up by 1.06%.

The top gainers on the Sensex were BHEL up by 2.65%, Dr. Reddys Lab up by 2.02%, NTPC up by 1.69%, Reliance Industries up by 1.20% and Hindalco up by 0.93%. On the flip side, Mahindra & Mahindra down by 1.85%, Bajaj Auto down by 0.66%, Maruti Suzuki down by 0.63%, HDFC Bank down by 0.42% and Larsen & Toubro down by 0.13% were the top losers.

On the BSE Sectoral front INFRA up by 1.23%, Power up by 1.02%, Realty up by 1.01%, Consumer Durables up by 0.93%, Oil & Gas up by 0.70% were the top gainers, while Auto down by 0.28% was the only loser in the space. 

Meanwhile, with an aim to boost the domestic manufacturing sector, the government has stated that it intends to develop industrial corridors and smart cities for providing infrastructure based on modern technology. 

Commerce and Industry Ministry highlighted that existing infrastructure in the country would be strengthened. Highlighting that strengthening infrastructure is one of the four pillars of 'Make in India' initiative, the Ministry said that innovation and research activities will be supported through fast paced registration system and the infrastructure of Intellectual Property Rights registration set-up has been upgraded. The other three pillars of the initiative include improving ease of doing business, focus on 25 identified sectors and new mindset.

Commerce Ministry further noted that the government will act as facilitator instead of regulator and partner with the industry in economic development of the country. About e-Biz project, the Ministry cleared that more government services such as PAN and TAN services of CBDT and Employer Registration Service of EPFO among others will be integrated shortly. Referring to the industrial corridor, it stated that significant progress has been made for Delhi Mumbai Industrial Corridor (DMIC ) and final environmental clearance has already been obtained from the Ministry of Environment for three DMIC nodes. Further, efforts have been also made for other corridors including Chennai Bangalore Industrial Corridor, Vizag Chennai Industrial Corridor (VCIC) and Bengaluru Mumbai Economic Corridor.

The CNX Nifty touched a high and low of 8,291.00 and 8,243.75 respectively.

The top gainers on Nifty were BHEL up by 3.35%, Cairn India up by 2.13%, UltraTech Cement up by 1.72%, Dr. Reddy's Laboratories up by 1.59% and DLF up by 1.51%. On the flip side, Mahindra & Mahindra down by 1.81%, Bajaj Auto down by 1.02%, Tech Mahindra down by 0.70%, Ambuja Cements down by 0.63% and Maruti Suzuki India down by 0.60% were the top losers.

European Markets were trading in green; UK’s FTSE 100 was up by 0.22% and France’s CAC was up by 0.54%

The Asian equity benchmarks ended mostly in green on Wednesday, as Chinese stocks rallied, capping the best year for the benchmark index since 2009. Markets in Japan, Philippines, South Korea, Thailand and Indonesia are shut today for holidays. Activity in China’s factory sector shrank for the first time in seven months in December, highlighting the urgency behind a series of surprise easing moves by Beijing in the past two months. The weak performance will add to the debate over whether Beijing needs to roll out more support measures to avert a sharper economic slowdown or fast-track market reforms to stimulate demand - or both. The report puts a final sluggish stamp on what has been a surprisingly grim fourth quarter for the world’s second-largest economy, which is expected to grow at its slowest pace this year in nearly a quarter of a century. The final HSBC/Markit Purchasing Managers' Index (PMI) for December came in at 49.6, just below the 50.0 level that separates growth from contraction. South Korean CPI remained unchanged at 0.0%.