Benchmarks end higher for third straight session

Extending their winning streak for third day in a row, Indian equity benchmarks ended the volatile day of trade with a gain of around half a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 27,550 (Sensex) and 8,300 (Nifty) bastions. Earlier, domestic bourses traded listless for most part of the day’s trade near their previous closing levels as traders were cautious ahead of key retail inflation and industrial output data due later in the day that will likely to set the tone for the Reserve Bank of India’s (RBI’s) move on interest rates in its next policy review in February. IIP data is likely to expand to 2.2 per cent in November, while the CPI inflation should accelerate to 5.4 per cent in the month of December as compared to 4.4 per cent reported in the month of November. Reports suggesting foreign institutional investors turning net sellers of $311.79 million worth shares this month, too weighed down sentiments.

However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Some solace also came after the World Bank has estimated that Indian economy is likely to grow by 6.4% in 2015 and accelerate further in the next year on the back of steps being taken by the Narendra Modi-led NDA government.

Positive opening in European counters too supported the sentiments. CAC, DAX and FTSE indices were trading firm in early deals, buoyed by increased mergers and acquisition activity in the healthcare sector. Asian shares ended mostly in red following a soft finish on Wall Street though the sentiment was supported by speculation the Federal Reserve would be patient in tightening policy given the weakness of wages apparent in the jobs numbers.

Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 62.23 per dollar at the time of equity market closing against the Friday’s close of 62.31 on the Interbank Foreign Exchange. Meanwhile, banking shares too remained on buyers’ radar ahead of retail inflation and IIP data to be released later in the day. Telecom stocks were in focus after the Department of Telecommunications (DoT) issued notice inviting applications (NIA) for auction of spectrum in 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands. Additionally, Oil exploration firms declined along with fall in crude oil prices.

The NSE’s 50-share broadly followed index Nifty ended higher by around forty points to end above its psychological 8,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over one hundred and twenty points to regain the psychological 27,550 mark. The 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 1651 shares on the gaining side against 1253 shares on the losing side while 120 shares remain unchanged.

Finally, the BSE Sensex surged by 126.89 points or 0.46%, to 27585.27, while the CNX Nifty soared by 38.50 points or 0.46% to 8,323.00.

The BSE Sensex touched a high and a low of 27620.66 and 27323.74, respectively. The BSE Mid cap index was up by 0.58%, while the Small cap index was up by 0.83%.

The top gainers on the Sensex were Hindustan Unilever up by 3.84%, Larsen & Toubro up by 2.29%, Infosys up by 1.98%, HDFC up by 1.57% and ICICI Bank up by 1.27%. On the flip side, Coal India down by 4.54%, Hindalco down by 2.55%, Bajaj Auto down by 2.03%, Bharti Airtel down by 1.92% and Hero MotoCorp down by 1.90% were the top losers.

On the BSE Sectoral front Capital Goods up by 1.55%, FMCG up by 1.42%, IT up by 1.32%, TECK up by 0.91%, Bankex up by 0.90% were the top gainers, while Metal down by 1.68%, Oil & Gas down by 1.19%, PSU down by 0.42%, INFRA down by 0.24% and Realty down by 0.03% were top losers in the space. 

Meanwhile, persuading global investors to invest in India, Prime Minister Narendra Modi has promised to make India the easiest destination to do business with a stable tax regime and a predictable, transparent and fair policy environment. Stressing that the government is working to provide a policy-driven governance, Narendra Modi has stated that a single window clearance for projects is being set up at both central and state level to boost the manufacturing sector. India has low-cost and high quality manpower and global players must have to leverage this opportunity.

Prime Minister added that government is actively working to revive the economy and listed out recent initiatives taken by his government. He added that FDI in construction has been liberalised, 100 percent foreign investment has been allowed in railways, defence sector has been opened for FDI up to 49 percent and a hiked FDI to 49% in the insurance sector. To boost the infrastructure development, a fast track PPP mechanism is being put in place to speed up the implementation of roads, gas grids, electricity and water systems, farm irrigation projects.

Indian economic growth had slowed down to below 5% over the last two financial years amid concerns like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects. However, the domestic economy has shown signs of nascent recovery and expanded at 5.5% during H1FY15 as compared to 4.9% H1FY14.

The CNX Nifty touched a high and low of 8,332.60 and 8,245.60 respectively.

The top gainers on Nifty were IndusInd Bank up by 4.24%, Hindustan Unilever up by 3.98%, Tech Mahindra up by 2.91%, Larsen & Toubro up by 2.18% and HCL Technologies up by 1.91%. On the flip side, Coal India down by 4.28%, Cairn India down by 2.96%, Hindalco Industries down by 2.58%, Jindal Steel & Power down by 2.52% and Bharti Airtel down by 1.98% were the top losers.

Most of European Markets were trading in the green; UK's FTSE 100 was up by 0. 0.48% and Germany's DAX was up by 1.54%, while France's CAC was down by 1.90%.

The Asian equity benchmarks ended mostly in red on Monday, with Chinese stocks falling for a third day, the longest losing streak since November, amid concern a rally for the world’s best-performing equities market over the past year has been excessive relative to the outlook for the economy. Japan’s Stock Exchange was closed on account of ‘Coming of Age (Adults) Day’ holiday. Japan’s government will propose a record budget for next fiscal year of more than $800 billion but cut borrowing for a third year as Prime Minister Shinzo Abe seeks to maintain growth while curbing the heaviest debt burden in the industrial world. Shinzo Abe stated that Japan is on course to meet his promise of halving the primary budget deficit - excluding new bond sales and debt servicing - in the next fiscal year. Japanese Economics Minister Akira Amari notified that he expects real wages to turn positive in the fiscal year starting April as the economy recovers from nearly two decades of mild deflation. Japan’s index of leading economic indicators rose to a seasonally adjusted 103.8, from 104.5 in the preceding month whose figure was revised up from 104.0.