Benchmarks extend winning streak for fourth straight session

Extending their northward journey, Indian equity benchmarks ended the Wednesday’s session with a gain of over half a percent with key gauges recapturing their crucial 28,700 (Sensex) and 8,700 (Nifty) levels. Sentiments remained up-beat since beginning of the trade and benchmarks managed to fervently gain from strength to strength to end near intraday high levels as investors continued hunt for fundamentally strong but oversold stocks.

Rally in resources stocks such as Coal India and Reliance Industries mainly aided the sentiments. Some support also came with a survey sponsored by RBI projecting the economic growth rate at 7.9 percent for the current fiscal, up from 7.5 percent in 2014-15. The forecasters expect real GVA to increase by 7.5 percent in 2014-15. Also, NITI Aayog vice-chairman Arvind Panagariya has said that nothing has-changed-on the-ground though the economy is showing signs of turnaround. Panagariya also said that it will take some time before major results show up as there is a new government which came with a lot of promises.

On the global front, European counters made a positive opening as a $70 billion mega-deal in the European oil and gas sector stoked the merger and acquisition fever that has gripped investors this week. Asian markets ended mixed, though some of the indices hit nine-month high, led by Hong Kong shares, and the dollar weakened before the Bank of Japan decides policy.

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. Meanwhile, none of the sectoral indices were trading in the red, barring banking, while software and technology witnessed the maximum gain in trade. Metal, oil and gas, fast moving consumer goods, realty, consumer durables and public sector undertakings too were trading significantly.

Meanwhile, rally in real estate stocks too aided the sentiments as the government approved changes to a Bill that seeks to regulate the country's property market. The bill is aimed to protect the interest of consumers from errant developers and ensure timely execution of projects. Stocks related to PSU sector too remained on buyers’ radar after government’s divestment programme for the current fiscal got a flying start with the Offer for Sale (OFS) of 5 per cent stake in state-run REC getting over-subscribed in just about an hour. On the other hand, banking pack remained the lone loser as some of the country’s biggest banks started announcing base rate cuts and traders were worried that it may impact their profit margin.

The NSE’s 50-share broadly followed index Nifty rose by over fifty points and ended above the psychological 8,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and ninety points to finish above the psychological 28,700 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of around a percentage point. The market breadth remained in favor of advances, as there were 1,803 shares on the gaining side against 992 shares on the losing side while 121 shares remain unchanged.

Finally, the BSE Sensex surged by 191.16 points or 0.67% to 28707.75, while the CNX Nifty soared by 54.10 points or 0.62% to 8,714.40.

The BSE Sensex touched a high and a low of 28763.06 and 28566.61, respectively. The BSE Mid cap index was up by 0.65%, while Small cap index was up by 1.79%.

The top gainers on the Sensex were Coal India up by 5.73%, Reliance Industries up by 3.93%, Bharti Airtel up by 3.63%, TCS up by 2.25% and Dr. Reddys Lab up by 2.10%. On the flip side, HDFC down by 2.22%, Sesa Sterlite down by 1.93%, ONGC down by 1.74%, Hero MotoCorp down by 1.32% and Tata Power down by 0.96% were the top losers.

The gaining sectoral indices on the BSE were IT up by 1.98%, TECK up by 1.74%, Metal up by 1.62%, Oil & Gas up by 1.55% and FMCG up by 1.46% while, Bankex down by 0.31% was the only losing indices on BSE.

Meanwhile, India's central bank governor, Raghuram Rajan, being extremely positive on the economy, pointed to the green shoots that have now started showing up in the investment climate. Besides, he also asserted that while the rates of stalled projects were coming down, investment intentions were picking up with the economy beginning to see the start of an investment cycle. Data put out by Centre for Monitoring Indian Economy (CMIE) on Tuesday also points out to a revival in investment growth. He however, cautioned that these were just early signs and not calls for celebration.

Further, the governor also refrained from commenting on the new series on economic growth numbers by the Central Statistics Office (CSO) and said that he was trying to understand the new series as he felt that determining potential growth wasn't that easy with such a short series of data.

The governor emphasized that as the growth process for the country kick-starts, the government would have to be mindful of on issues relating to fuelling such expansion with sufficient funding options. He also drew some attention of government to capital needs of PSU banks and highlighted that there was some room for the banks, especially the state-run ones to access the markets to raise capital from the market over and above what they can do from the government. 

The CNX Nifty touched a high and low of 8,730.50 and 8,679.80 respectively.

The top gainers on Nifty were Coal India up by 6.23%, Bharti Airtel up by 3.64%, Reliance Industries up by 3.62%, Tech Mahindra up by 3.39% and GAIL (India) up by 3.29%. On the flip side, Idea Cellular down by 2.71%, Yes Bank down by 2.31%, Sesa Sterlite down by 2.25%, HDFC down by 2.16% and ONGC down by 1.80% were the top losers.

Most of European Markets were trading in the red; Germany's DAX was down by 0.46% and France's CAC was down by 0.03% while UK's FTSE 100 was up by 0.56%.

The Asian markets closed mixed on Wednesday, with Chinese stocks were higher, as gains in the Financials, Life Insurance and Banking sectors led indices higher. The Bank of Japan on Wednesday decided by an 8 to 1 vote to leave the bank’s policy target unchanged while board member Takahide Kiuchi, who had been opposed to the October 31 easing, called for an even lower simulative target than the one before the last easing. Now that the two-year period is over, Kiuchi proposed that the BoJ should conduct money market operations and asset purchases so that the monetary base and the amount outstanding of its JGB holdings will increase at an annual pace about 45 trillion yen. Japan’s Economy Watchers Current Index rose to a seasonally adjusted 52.2, from 50.1 in the preceding month. Taiwanese Trade Balance fell to a seasonally adjusted annual rate of 4.07B, from 4.56B in the preceding month while Taiwanese CPI rose to a seasonally adjusted annual rate of 0.55%, from 0.01% in the preceding quarter.