Benchmarks extend winning streak to seventh straight session; Nifty surpasses 8,800 mark

Extending their winning streak to seventh straight session, Indian equity benchmarks scaled yet another lifetime closing high levels on Friday, which took Nifty above its crucial 8,800 mark, while Sensex surpassed psychological 29,250 mark with gains of around a percent. Sentiments remained positive since beginning after the European Central Bank launched a landmark bond-buying stimulus programme that buoyed investors’ risk appetite. Though, some amount of profit booking witnessed at record high levels but markets found strong support near their crucial 8,800 (Nifty) and 29,200 (Sensex) levels.

Sentiments got some support after finance minister Arun Jaitley said that the economy is set to clock a 6.5 per cent growth next year and then take off to reach 8-9 per cent in the years to come on the back of huge public support for reforms initiated by the government. He also added that the government will keep up the pace of reforms but said he doesn’t want to build expectations in the run up to the Budget. Some support also came in from reports that foreign institutional investors were net buyers in Indian equities worth Rs 593 crore on Thursday, as per provisional stock exchange data.

Global cues too remained supportive with European markets trading higher in early deals, gaining ground for the seventh consecutive session, as investors cheered the European Central Bank’s decision to buy government bonds. Asian markets too ended the session in the green terrain on hopes of additional foreign investments after the European Central Bank launched a landmark bond-buying stimulus programme.

Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 61.58 per dollar at the time of equity market closing against the Thursday’s close of 61.69 on the Interbank Foreign Exchange. Meanwhile, banking stocks remained on buyers’ radar as Reserve Bank is expected to come out with more monetary easing in the coming months if inflation remains in the comfortable zone.

The NSE’s 50-share broadly followed index Nifty rose by over seventy points and ended above the psychological 8,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over two hundred and seventy points to finish above the psychological 29,250 mark. Broader markets, however, struggled to get any traction and ended the session slightly in the red. The market breadth remained in favour of decliners, as there were 1137 shares on the gaining side against 1802 shares on the losing side while 103 shares remain unchanged.

Finally, the BSE Sensex surged by 272.82 points or 0.94%, to 29278.84, while the CNX Nifty soared by 74.20 points or 0.85% to 8,835.60.

The BSE Sensex touched a high and a low of 29408.73 and 29165.56, respectively. The BSE Mid cap index was down by 0.14%, while the Small cap index was down by 0.73%.

The top gainers on the Sensex were Tata Power up by 6.86%, Tata Motors up by 3.81%, Bharti Airtel up by 3.72%, Cipla up by 3.15% and Larsen & Toubro up by 2.58%. On the flip side, GAIL India down by 1.80%, BHEL down by 1.67%, ONGC down by 1.09%, Dr. Reddys Lab down by 0.49% and TCS down by 0.44% were the top losers.

On the BSE Sectoral front INFRA up by 1.51%, Auto up by 1.51%, Realty up by 1.48%, Capital Goods up by 1.32% and Power up by 1.17% were the top gainers, while Consumer Durables down by 0.25% and PSU down by 0.03% were the only losing indices on BSE.

Meanwhile, to present a more accurate and realistic price situation, the government will release next month a new series of Consumer Price Index (CPI) with 2012 as base year for computing retail inflation rate.

The Central Statistics Office (CSO) is in the process revising the Base Year from 2010=100 to 2012=100 so that the gap between Price Reference Year (Base Year) and the Weight Reference Year has been minimised. The first series (revised) would be compiled for January which will be released on February 12 and from January 2016 onwards, inflation rates would be compiled using the actual CPI of the revised series.

Besides, the government has notified a number of methodological improvements have been introduced in the revised series. Prices of Antyodaya Anna Yojanna (AAY) have also been included in addition to Above Poverty Line (APL) & Below Poverty Line (BPL) prices being taken in the existing series. The weight of food and beverages would be 45.86 in the new series compared to 47.58 in 2010 series for national index. The weight of fuel and light segment would be 6.84 in the new series which is 9.49 in the 2010 series. The weight of clothing and footware segment would be increased to 6.53 from 4.73.

The weight of housing will also be increased to 10.07 from 9.77. Further, the weight of pan, tobacco and intoxicants will be increased to 2.38 from 2.13 in 2010 series. Similarly the weight of miscellaneous will also be increased to 28.32 from 26.31 in the new series. The number of priced items has been changed from 437 to 448 in rural and from 450 to 460 in urban at all India level. In the revised series, 11 new priced items have also been added, without dropping any item, in rural sector at all India level. In case of urban, 7 priced items have been dropped and 17 new priced items have been added.

The CNX Nifty touched a high and low of 8,866.40 and 8,795.40 respectively.

The top gainers on Nifty were Tata Power Company up by 6.24%, DLF up by 5.65%, Cipla up by 4.15%, Cairn India up by 3.98% and Jindal Steel & Power up by 3.68%. On the flip side, PNB down by 2.68%, BHEL down by 1.90%, GAIL (India) down by 1.87%, Lupin down by 1.29% and HCL Technologies down by 1.18% were the top losers.

European Markets were trading in the green; France's CAC was up by 1.60%, Germany's DAX was up by 1.47% and UK's FTSE 100 was up by 0.33%.

The Asian equity benchmarks ended in green on Friday, after European Central Bank President Mario Draghi expanded stimulus. Chinese stocks in Hong Kong climbed to a three-year high as an unexpected gain in a manufacturing gauge signaled the world’s second-largest economy is stabilizing. The bad debt ratio of Chinese banks climbed to 1.6% as of the end of 2014, a level not seen since the global financial crisis and underscoring building financial pressures as China’s economy cools. China’s labour market was stable last year even as its economic growth plumbed a 24-year low, with the urban unemployment rate little changed at 4.1% at the end of December. An economic adviser to Japanese Prime Minister Shinzo Abe stated that Japan could see some concrete movement in its real economy in 2015, adding that inflation expectations have been rising under the Bank of Japan’s monetary stimulus. Taiwanese Industrial Production rose to a seasonally adjusted annual rate of 7.33%, from 6.86% in the preceding month. South Korean GDP fell to a seasonally adjusted annual rate of 2.7%, from 3.2% in the preceding month.