Benchmarks eke out slender gains on F&O expiry session

Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday. Buying activity which took place during second half of trade drove the markets higher and key domestic benchmarks managed to keep their head above water. Earlier, markets started the trade at somber note amid weak global cues. Investors remained on sidelines ahead of Reserve Bank of India’s (RBI) monetary policy next week. Depreciation in Indian rupee too dampened the sentiments. The rupee was at 66.12 per dollar at the time of equity markets closing as compared to 65.99 per dollar level on Wednesday.

Also, there was some concern with a World Bank report terming India’s urbanisation as “messy and hidden” and calling for initiatives at the policy and institutional level to tap the economic potential it offers. The World Bank said there has been difficulty in dealing with pressures that increased urban populations put on basic services, infrastructure, land, housing and environment. However, markets entered into green terrain in late afternoon deals as investors opted to buy beaten down but fundamentally strong stocks. Sentiments got some support with chief economic adviser Arvind Subramanian’s statement that India does not need further fiscal stimulus to revive the economy, despite record low inflation and growth seen at the lower end of an 8.1-8.5 percent target this financial year.

On the global front, European markets were trading mostly in red in early deals, as investors remained cautious ahead of a report on Germany's business climate and as European Central Bank President Mario Draghi's comments made yesterday continued to weigh. Asian markets ended mostly in red on Thursday after more dour economic news in China and the United States prompted a bruising selloff the previous day.

Back home, some support also came after Economic Affairs Secretary Shaktikanta Das, while expressing optimism that the growth in the current fiscal will exceed 7.5 percent, has said that the government will not wait for the Budget and will continue with reforms measures to make India an attractive investment destination. Marketmen also drew some comfort with RBI proposing to allow domestic companies to borrow money from pension funds; sovereign wealth funds (SWFs) and insurance funds as part of the ECBs, in order to encourage overseas funding.

Buying in software and pharmaceutical stocks too aided sentiment as rupee dropped against the dollar. Stocks related to auto counter too edged higher after Union Minister Nitin Gadkari said that the government is watching the developments related to emission cheating scandal involving Volkswagen in the US but the issue is not a concern right now. On the flip side, port sector stock ended lower despite the government reporting a 8.7 percent increase in revenue generation from 12 major ports in the country during 2014-15, and stating that the trend showed a reversal in performance of the shipping industry's sub-segment.

The NSE’s 50-share broadly followed index Nifty rose by over twenty points and ended near the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over forty points to finish above the psychological 25,850 mark. Broader markets too managed to end in green terrain with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,442 shares on the gaining side against 1,245 shares on the losing side while 118 shares remain unchanged.

Finally, the BSE Sensex gained 40.51 points or 0.16% to 25863.50, while the CNX Nifty added 22.55 points or 0.29% to 7868.50.

The BSE Sensex touched a high and a low 25949.90 and 25670.96, respectively. The BSE Mid cap index was up by 0.22%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were IT up by 2.02%, Consumer Durables up by 1.98%, TECK up by 1.59%, FMCG up by 0.98% and Healthcare up by 0.74%, while Metal down by 1.37%, Capital Goods down by 1.13%, PSU down by 0.96%, Oil & Gas down by 0.76% and Bankex down by 0.45% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 3.55%, GAIL India up by 2.51%, Infosys up by 2.22%, Bajaj Auto up by 1.91% and ITC up by 1.88%. On the flip side, ONGC down by 3.71%, Coal India down by 2.79%, Tata Steel down by 2.58%, Larsen & Toubro down by 2.25% and Tata Motors down by 2.11% were the top losers.

Meanwhile, economic Affairs Secretary Shaktikanta Das has expressed his optimism that the growth in the current fiscal will exceed 7.5 percent. He said that the government will not wait for the Budget and will continue with reforms measures to make India an attractive investment destination, adding that policy initiatives are round the clock, a 24x7 exercise, and will continue.He also said that the government will initiate a series of reforms measures from time to time, the direction of these reforms and administrative measures is to strengthen the initiative towards Make in India and second is to ensure revival of demand by giving a boost to more and more investment. He added that for Make in India the government has taken various steps including ease of doing business, simplification of procedures and rules.

Though, he ruled out any fiscal incentive to boost demand and said that it cannot be done by resorting to fiscal expansionary measures, but by promoting investment. He said that 'we cannot resort to fiscal expansionary measures which were initiated 5-6 years ago when the financial crisis hit the world market... Today we don't have that fiscal room to adopt that kind of expansionary policies because beyond a point, it produces negative consequences”.

The CNX Nifty touched a high and low 7894.50 and 7804.10 respectively.

The top gainers on Nifty were Lupin up by 3.62%, Tata Power up by 3.40%, HCL up by 3.12%, Indusind Bank up by 2.50% and GAIL India up by 2.33%. On the flip side, ONGC down by 3.99%, NMDC down by 3.31%, Coal India down by 2.64%, Tata Steel down by 2.53% and Tata Motors down by 2.53% were the top losers.

European Markets were trading in the red; France’s CAC was down by 0.42%, UK's FTSE was down by 0.25% and Germany’s DAX was down by 1.01%. 

The Asian markets closed mostly in red on Thursday, after more dour economic news in China and the United States piled pressure on riskier assets. Stock markets at Indonesia, Malaysia and Singapore were closed on account of holiday. China’s central bank raised the ceiling on cross-border yuan fund flows for multinationals via two-way cross-border yuan cash pooling and cut the threshold to conduct the business. The cap on the net inflow was raised to 50 percent of the total shareholders’ equity in the cash pool. The initial ceiling for inflow was 10 percent and there was no limit on outflow. Japanese Prime Minister Shinzo Abe will announce a plan to raise gross domestic product by around 22 percent to 600 trillion Japanese yen ($5 trillion) as he refocuses on the economy after the passage of controversial security bills that eroded his popularity. Abe wants to turn attention back to the faltering economy after last week’s enactment of unpopular bills that could let troops fight overseas for the first time since 1945, a milestone in his push to loosen the limits of the pacifist constitution.  Japan’s All Industries Activity Index rose to a seasonally adjusted 0.2%, from 0.5% in the preceding month whose figure was revised up from 0.3%.