Benchmarks snap three days losing streak; Sensex regains 27,000 mark

Snapping three day’s losing streak, boisterous benchmarks showcased an enthusiastic performance on Thursday, by rallying around a percentage point. Markets, after a gap-up opening, showed steady trade 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 ended near their intraday high levels, settling above their crucial 8,150 (Nifty) and 27,000 (Sensex) bastions, supported by the surge in other global markets.

Sentiments remained up-beat with government measures to control inflation, as the Finance Minister at an inter-ministerial group meeting, in view of spiking pulses prices said that the government has decided to invoke the Rs 500-crore Price Stabilisation Fund that will be used to pay for transportation, handling, milling and processing -- aimed at reducing the cost of imported pulses. Some support came with the government approval of one-time financial assistance for incomplete and languishing national highway (NH) projects. Projects where half of the construction was complete till November 2014 will be eligible for this one-time financial assistance.

Global cues too remained supportive with European counters making strong start and CAC, DAX and FTSE were trading with a gain of around a percent in early deals on hopes that poor economic data will persuade the Federal Reserve to hold off raising rates until next year. Asian markets ended in green, as weak data out of US reinforced expectations that the Federal Reserve will hold off on raising interest rates.

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. Foreign portfolio investors (FPIs) bought shares worth a net Rs 121.75 crore October, 14, 2015, as per provisional data released by the stock exchanges, too added positive milieu. Appreciation in Indian rupee also aided sentiments. The rupee was at 64.85 per dollar at the time of equity markets closing as compared to 65.03 per dollar level on Wednesday. Strong Q2 earnings from some of the corporate entities too supported the upmove of the markets, Lakshmi Vilas Bank and LIC Housing Finance came up with good set of numbers. Lakshmi Vilas Bank has posted a rise of 42.32% in its net profit at Rs 44.83 crore for the quarter ended September 30, 2015 as compared to Rs 31.50 crore for the same quarter in the previous year, while LIC Housing Finance has reported 20.62% rise in its net profit at Rs 411.73 crore for the quarter ended September 30, 2015 as compared to Rs 341.35 crore for the same quarter in the previous year.

The NSE’s 50-share broadly followed index Nifty rose by over seventy points and ended above the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over two hundred and thirty points to finish above the psychological 27,000 mark. Broader markets too traded with traction and ended the session with a gain of around one and a half percentage point. The market breadth remained in favour of advances, as there were 1,534 shares on the gaining side against 1,191 shares on the losing side while 147 shares remain unchanged.

Finally, the BSE Sensex surged by 230.48 points or 0.86% to 27010.14, while the CNX Nifty soared by 71.60 points or 0.88% to 8179.50.

The BSE Sensex touched a high and a low 27037.95 and 26836.77, respectively. The BSE Mid cap index was up by 0.79%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Auto up by 2.33%, PSU up by 1.54%, Oil & Gas up by 1.51%, Metal up by 1.40% and Capital Goods up by 1.22%, while IT down by 0.14% was the only losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 8.06%, BHEL up by 3.02%, Maruti Suzuki up by 3.01%, Tata Steel up by 2.94% and Hero MotoCorp up by 2.37%. On the flip side, Wipro down by 0.86%, Mahindra & Mahindra down by 0.86%, Hindalco down by 0.85%, Hindustan Unilever down by 0.84% and Cipla down by 0.83% were the top losers.

Meanwhile, the government has approved one - time financial assistance for ‘physically incomplete and languishing’ national highway (NH) projects. The highway projects which will be eligible for this assistance are those where construction has been 50% completed till November 2014. The one-time infusion will help complete around 15 projects, involving about Rs 15,000 crore of investment. This will be executed through a tripartite agreement between the funding agency, the National Highways Authority of India NHAI and the concessionaire. The move could act as an impetus to the ailing highway sector.

The assistance will be provided on a loan basis at bank rate plus 2%. A robust third-party evaluation mechanism will be developed by the NHAI to determine the eligibility of the concerned project and the extent of bridge fund required to complete it. All such cases and the bridge fund required in each case shall be approved by the NHAI, on a case to case basis. This is expected to revitalize the highways sector.

Further, the conditions being offered to concessionaires, including the interest rate, are also on the softer side. The concessionaire seeking such relief will approach NHAI with an application clearly stating the financing plan required for completion of the project construction and justifying the infusion.

After steel sector, roads sector has the highest Non Performing Assets (NPAs) for banks. Recently, the government approved an exit policy for highway developers planning to exit the project after two years of completion. Policy decisions such as the recent exit clause and now the fund infusion will help the stressed assets. Since Prime Minister Narendra Modi took up a charge in May 2014, the number of stuck projects was nearly 77. Out of which, 34 contracts have been cancelled where work did not start, three have been terminated and 16 are languishing while the remaining are being sorted out.

The CNX Nifty touched a high and low 8190.55 and 8129.80 respectively.

The top gainers on Nifty were Zee Entertainment up by 7.95%, Tata Motors up by 7.86%, BPCL up by 3.97%, Bank of Baroda up by 3.75% and BHEL up by 3.31%. On the flip side, Cipla down by 1.15%, Mahindra & Mahindra down by 1.08%, Wipro down by 0.85%, TCS down by 0.60% and Hindustan Unilever down by 0.54% were the top losers.

European Markets were trading in the green; France’s CAC was up by 1.19%, Germany’s DAX was up by 1.35% and UK's FTSE was up by 0.84%. 

The Asian equity markets ended in green on Thursday, as weak US economic data could delay Fed rate hike. China’s economic planner stated that consumer prices will continue to growth at a mild pace in coming months, amid investors’ concerns about deflationary pressures in the economy. The National Bureau of Statistics (NBS) data showed that the consumer price index (CPI) rose 1.6% in September from a year earlier, lower than expectations of 1.8% and down from August’s 2%. China’s non-financial outbound direct investment (ODI) increased to 16.5% year-on- year to $87.3 billion in the first three quarters of 2015 as Chinese companies invested more under the Silk Road initiative. Foreign-contracted projects rose to $137.6 billion during the January-September period, up 26.5% from last year. The accomplished turnover climbed 9.2% to $100.8 billion.  Japan’s industrial production fell to a seasonally adjusted -1.2%, from -0.5% in the preceding month.

South Korea’s central bank has cut its economic growth forecast for the fourth time this year and left interest rates at a record low, as a lengthening export slump overshadowed a pick-up in domestic activity. The BOK shaved its economic growth forecast for this year to 2.7%, from the 2.8% it had predicted back in July. It is the fourth reduction since the start of the year, when it had estimated 3.9% growth. The bank also left its key interest rate unchanged at 1.5% -- a decision that had been widely expected following a cut of 25 basis points in June.