Benchmarks extend gaining streak; Nifty regains 8,250 mark

Extending their winning streak for third straight session, Indian equity benchmarks ended the Monday’s trade with a gain of over half a percent with frontline gauges recapturing their crucial 27,300 (Sensex) and 8,250 (Nifty) levels. Markets traded choppy in initial trade, but hectic buying activity which took place during second half of trade mainly drove the markets higher. Sentiments remained up-beat with report that the government is likely to go for a fresh round of consultations on Goods and Service Tax with the Opposition parties after the Bihar elections. Parliamentary affairs minister M Venkaiah Naidu has said that further discussions with the Opposition on passing the bill will be held during the Winter Session of Parliament.

Some support also came after the Department of Disinvestment (DoD) has suggested tax incentives for small investors to attract more retail investors into the stock markets. Rally in Reliance Industries’ shares too aided sentiments with company reporting highest ever quarterly net profit of Rs 6,720 crore for three months ending September 30 on spike in refinery and petrochemicals margins. However, total income of the company has decreased by 35.16% at Rs 72497 crore for quarter under review as compared to Rs 111806 crore for the quarter ended September 30, 2014.

Firm opening in European counters too supported the sentiments. CAC, DAX and FTSE were trading mostly in green in early deals, helped by positive news on names like Metro and Deutsche Bank and as better-than-predicted Chinese growth data and hopes of more stimulus there improved sentiment. Asian markets ended mostly in green, though the Chinese market ended with mild losses, as China's  Gross domestic product grew 6.9 percent year-on-year in the third quarter, slightly slower than the 7 percent expansion seen in the first two quarters.

Back home, traders drew some encouragement with finance ministry’s announcement that it is seeking the views of foreign portfolio investors (FPIs) on measures to simplify the procedures and documentation for registration of FPIs in India. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 66.77 per dollar at the time of equity market closing against the Friday’s close of 66.80 on the Interbank Foreign Exchange. Meanwhile, aviation stocks flied high after no-frills carrier IndiGo’s parent InterGlobe Aviation fixed the price band for its proposed initial public offer (IPO). The company has fixed the price band for its initial share sale at Rs 700-765, through which it could raise up to Rs 3,268 crore. On the flip side, stocks related to metal counter edged lower after a raft of subdued economic data in China.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points and ended above the psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and fifty points to finish above the psychological 27,300 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of over half a percentage point. The market breadth remained in favor of advances, as there were 1,565 shares on the gaining side against 1,157 shares on the losing side while 162 shares remain unchanged.

Finally, the BSE Sensex surged by 150.32 points or 0.55% to 27364.92, while the CNX Nifty gained 36.90 points or 0.45% to 8275.05.

The BSE Sensex touched a high and a low 27387.91 and 27246.79, respectively. The BSE Mid cap index was up by 0.69%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Realty up by 2.57%, TECK up by 1.35%, Healthcare up by 1.26%, IT up by 1.11% and Oil & Gas up by 1.08%, while Capital Goods down by 0.91%, Metal down by 0.56%, Consumer Durables down by 0.36%, Auto down by 0.36% and Bankex down by 0.35% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 5.61%, Bharti Airtel up by 3.96%, Sun Pharma Inds. up by 1.83%, Infosys up by 1.69% and Dr. Reddys Lab up by 1.57%. On the flip side, ONGC down by 2.42%, Tata Motors down by 1.99%, Tata Steel down by 1.78%, Larsen & Toubro down by 1.49% and Hindalco down by 1.31% were the top losers.

Meanwhile, Reserve Bank Governor Raghuram Rajan has said that if India don’t make tremendous investments and improves its supply situation, it will not be able to have a GDP growth of 9 per cent. In order to achieve the growth, he said there is a need for large investments which could lead to higher demand. However, he warned against populist policies saying they are driven by a desperate need for growth while the fact is that the real ways of growth are really hard.

Rajan further said that he see 9 per cent growth as a situation where India is investing tremendous amount and thus creating the supply which will then help the demand. Hence, the country should not just boost the demand but also need to boost supply, which means a lot of work on a number of fronts which currently the government is engaged in.

He however said that 9 per cent growth rate is a steady process and cannot be attained overnight. He stated that there is a need to eliminate the supply constraints including human capital. Besides, Rajan said that “India cannot have much higher levels of growth without inflation and for that the country have to create underlying supply conditions that would allow India to sort of have a much higher demand.

The CNX Nifty touched a high and low 8283.05 and 8239.20 respectively.

The top gainers on Nifty were Reliance Industries up by 5.50%, Bharti Airtel up by 3.85%, HCL up by 2.12%, Hindustan Unilever up by 2.04% and Infosys up by 1.81%. On the flip side, ONGC down by 2.31%, Tata Steel down by 2.00%, Tata Motors down by 1.90%, Ultatech Cements down by 1.84% and Adani Ports &Special down by 1.81% were the top losers. European Markets were trading mostly in the green; France’s CAC was up by 0.26% and Germany’s DAX was up by 0.80%, while UK's FTSE was up by 0.78%. 

The Asian equity markets ended mostly in green on Monday, while China shares fell after the world’s second largest economy expanded at its slowest pace since 2009 in the third quarter. China’s economy will maintain stable growth in the future after growth eased to the slowest since the global financial crisis. China’s exports face increased downward pressure and the government needs time to absorb excess capacity in traditional industries. Chinese GDP fell to an annual rate of 6.9%, from 7.0% in the preceding month. Chinese Industrial Production fell to 5.7%, from 6.1% in the preceding month. Chinese Retail Sales rose to an annual rate of 10.9%, from 10.8% in the preceding month while Chinese Fixed Asset Investment fell to a seasonally adjusted 10.3%, from 10.9% in the preceding month. Japan’s economy is expected to have slowed sharply in the third quarter as demand across Asia ebbed, keeping the Bank of Japan and policymakers under pressure to inject more stimulus to revitalize growth.  The poll of 21 economists predicted the economy grew at an annualized rate of 0.4% in the third quarter, a significant downgrade from last month’s 1.3% forecast. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to the preceding month.