Benchmarks extend previous session’s jubilation; Sensex recaptures 26,100 mark

Wednesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges, extending their previous session’s jubilation, garnered gains of around one and a half percent as investors continued to cheer bigger than expected repo rate cut of 50 bps for second day in a row. The central bank has also hiked limit for FPI investment in government bonds to 5 per cent of the outstanding stock by March, 2018, a move that will bring in an additional Rs. 1.2 lakh crore in G-Sec.

Traders also got encouragement with report that India has become the top destination for FDI in the world. With $31 billion of foreign capital inflows, India has surpassed China and the US to take the pole position in attracting largest FDI in the first half of 2015. Some support also came after the Chief Economic Advisor Arvind Subramanian said that the government is committed to contribute its share by adhering to its fiscal deficit target so that inflationary pressures remain under control.

Buying intensified in last leg of trade with European counters making a firm start and CAC, DAX and FTSE were trading with a gain of around two percent in early deals after another revision of the UK GDP has shown that the economy has expanded at an annual pace of 2.4% during the second quarter vs. 2.6% expected and 0.7% inter-quarter. Japan and Hong Kong markets mainly led gains in Asian markets amid expectations for more monetary and fiscal stimulus from Japan after the latest data showed that Japanese industrial output fell unexpectedly for the second straight month in August.

Back home, sentiments remained up-beat since start as key bourses made a gap-up opening and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength, as investors continued their hunt for fundamentally strong stocks. Frontline indices not only extended their rally for second straight session but also ended near intraday high levels, with Sensex recapturing their 26,100 marks, while Nifty ended just shy of 7,950 mark.

Buying in metal counter aided sentiments as commodity prices edged higher overnight. Stocks related to steel counter too remained on buyers’ radar on reports that the domestic steel producers are expected to take advantage of the hike in safeguard duty and increase prices by up to Rs 1,500 per tonne.

The NSE’s 50-share broadly followed index Nifty rose by over hundred points and ended tad below the psychological 7,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around three hundred and eighty points to finish above the psychological 26,100 mark. Broader markets too traded with traction and ended the session with a gain of over a percentage point. The market breadth remained in favour of advances, as there were 1,683 shares on the gaining side against 979 shares on the losing side while 112 shares remain unchanged.

Finally, the BSE Sensex surged by 376.17 points or 1.46% to 26154.83, while the CNX Nifty soared by 105.60 points or 1.35% to 7948.90.

The BSE Sensex touched a high and a low 26179.70 and 25918.21, respectively. The BSE Mid cap index was up by 1.71%, while Small cap index was up by 1.07%.

The top gaining sectoral indices on the BSE were Metal up by 3.36%, FMCG up by 2.36%, TECK up by 2.07%, Realty up by 2.05% and Power up by 1.88%, while Bankex down by 0.44% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 5.24%, Bharti Airtel up by 4.50%, BHEL up by 4.18%, GAIL India up by 3.90% and Coal India up by 3.78%. On the flip side, SBI down by 1.96%, Axis Bank down by 1.68%, Vedanta down by 1.33%, TCS down by 0.10% and Maruti Suzuki down by 0.08% were the top losers.

Meanwhile, finance Minister Arun Jaitley has said that the government efforts are paying off as India has become the highest FDI destination for greenfield projects after the report published in Financial Times, London, titled 'India grabs investment league pole position'. The report stated that the India with $31 billion of foreign capital inflows, has surpassed China having $28 billion and the US $27 billion to take the pole position in attracting largest FDI in the first half of 2015.

India ranked fifth last fiscal in terms of capital investment after China, the US, the UK and Mexico. India is tracking well ahead of where it was at this time last fiscal: it has more than doubled its midyear investment levels, attracting $30 billion in the first half of 2015 compared with $12 billion same period last fiscal. In a year when many major FDI destinations posted declines, India experienced one of 2014's best FDI growth rates, increasing its number of projects by 47 per cent.

The government has relaxed FDI norms in many sectors, including multi-brand retail, telecom and defence. Besides, speedy approvals for businesses have been put in place.

 The CNX Nifty touched a high and low 7957.70 and 7874.50 respectively.

The top gainers on Nifty were Cairn India up by 6.44%, Idea Cellular up by 6.23%, Tata Steel up by 6.21%, Gail India up by 4.90% and Bharti Airtel up by 4.68%. On the flip side, Bank of Baroda down by 2.11%, Tech Mahindra down by 1.92%, SBI down by 1.63%, Tata Power down by 1.44%  and Axis Bank down by 1.33% were the top losers.

European Markets were trading in the green; France’s CAC was up by 2.67%, Germany’s DAX was up by 2.56% andUK's FTSE was up by 2.16%.

The Asian equity markets ended in green on Wednesday after sliding to three and a half year lows the previous day on concerns over a weak outlook for commodities amid slowing economic growth in China. Buying in Japanese market mainly led gains in Asian region with a weaker yen and window-dressing buying at the end of the first half of fiscal 2015 underpinning investor sentiment. Market participants also remained hopeful for more monetary and fiscal stimulus from Japan after the latest data showed that industrial output fell unexpectedly for the second straight month in August and retail sales showed no improvement from a month ago, while housing starts increased for the sixth consecutive month in August, offering some respite to investors worried about deflation and sluggish growth. Moreover, investors await the Bank of Japan’s Tankan survey due on Thursday and household spending figures out Friday to determine whether the central bank will step up monetary policy easing at its October 30 policy meeting. Seoul shares reversed early losses and ended with a gain of over a percent as foreign investors turned net buyers after five consecutive days of selling.