Benchmarks stage splendid performance on Thursday

Indian equity benchmarks staged an enthusiastic performance on Thursday, by rallying around one and a half percentage point and reclaiming their lots of psychological levels in their northward journey. Sentiments remained positive since beginning of the 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 with investors continued hunt for fundamentally strong but oversold stocks owing to strong global cues. The rally came after traders cheered the wave of policy reform announcements by the government. The Cabinet Committee on Economic Affairs (CCEA) approved a 10 per cent stake sale in Coal India, an initial public offering at Cochin Shipyard and a five-year interest subsidy scheme to boost sagging exports. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects.

Some support also came with Chief Economic Adviser Arvind Subramanian’s statement that Inflation is completely under control and it is well within the target of the Reserve Bank. Subramanian also added that India needs to boost its growth with public spending and as well as private investment. The central bank has targeted an inflation level of 5.8 percent by January 2016.

Global cues too remained jubilant with European counters making firm start, led by Sodexo after a solid update and were helped by strong gains among mining stocks. Asian markets rallied after the US Federal Reserve's meeting minutes sent strong signals of a rate increase in December, a vote of confidence in the health of the world's largest economy and a boon for the banking sector.

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. Frontline indices managed to settle near intraday high levels with Sensex and Nifty recapturing their crucial levels of 25,800 and 7,800 respectively. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 66.19 at the time of equity markets closing as compared to Wednesday’s close of 66.29 on increased selling of the US currency by exporters and banks.

Buying in software pack too aided sentiments after Infosys rebounded around 3 per cent today coming off its losses in last few sessions. Export oriented companies, especially the textile stocks remained in lime light with the government announcing 3 per cent interest subsidy scheme for exporters. Shares of railway-related companies too remained in focus after the government approved Rs 8,349 crore investments on rail freight lines in three states. On the flip side, sugar stocks suffered profit taking after moving higher for last couple of days.

The NSE’s 50-share broadly followed index Nifty rose by over one hundred and ten points and ended near the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around three hundred and sixty points to finish above the psychological 25,800 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 1,785 shares on the gaining side against 919 shares on the losing side while 187 shares remain unchanged.

Finally, the BSE Sensex surged by 359.40 points or 1.41% to 25841.92, while the CNX Nifty soared by 110.95 points or 1.43% to 7842.75. 

The BSE Sensex touched a high and a low 25884.52 and 25603.10, respectively. The BSE Mid cap index was up by 1.20 %, while Small cap index was up by 1.30 %. 

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.93%, IT up by 1.84%, TECK up by 1.78%, Oil & Gas up by 1.74 and Auto up by 1.46%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Bajaj Auto up by 3.16%, Vedanta up by 2.80%, HDFC up by 2.78%, Infosys up by 2.69% and Maruti Suzuki up by 2.60%. On the flip side, Dr. Reddys Lab down by 2.63%, Sun Pharma down by 1.46%, Coal India down by 0.36% and Axis Bank down by 0.13% were the top losers.

 Meanwhile, in order to bridge the yawning revenue gap and meet the disinvestment targets, the Union Cabinet has approved a 10 per cent stake sale in Coal India (CIL), one of the country's highest dividend paying companies. The government is facing ignominy of missing the disinvestment target for the sixth year, with so far raking up just 18 per cent of the Rs 69,500 crore disinvestment target in the current fiscal.

The stake sale in Coal India will be carried out through the offer for sale mechanism, the timing of which will be decided by the finance ministry.  At the current market price, a 10 per cent stake sale could fetch around Rs 21000 crore. This would still be lower than the Rs 22,600 crore that the Centre raised in the last financial year from a 10 per cent sale in the public sector behemoth. It was the largest single stake sale of a public sector firm by the government ever. The government is in the process of appointing merchant bankers for stake sale in Coal India, in which it currently holds 78.65% share.

For the current financial year, the government has budgeted to raise Rs 69,500 crore through disinvestment. Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale. For April- October month of the ongoing fiscal, the government has been able to raise Rs 12,600 crore through stale sale in four PSUs as volatile market conditions have dented disinvestment plans. For disinvestment in 2015-16, the government has a pipeline of over 20 PSUs for which it has the Cabinet approval. These include 10 per cent stake sale each in OIL, Nalco, NMDC, and 5 per cent each in NTPC, ONGC and BHEL.

The CNX Nifty touched a high and low 7854.90 and 7765.45 respectively.

The top gainers on Nifty were Tech Mahindra up by 3.55%, Bajaj Auto up by 3.49%, GAIL up by 3.43%, Zee Entertainment up by 3.40% and HCL up by 3.32%. On the flip side, Dr. Reddys Lab down by 2.02%, Sun Pharma down by 1.36%, Idea Cellular down by 1.04%, Coal India down by 0.34% and Bank Of Baroda down by 0.21% were the top losers.

European Markets were trading mostly in the green; France’s CAC was up by 0.96%, Germany’s DAX was up by 1.66% and UK’s FTSE was up by 1.32%.  

The Asian markets closed higher on Thursday, after minutes from the Federal Reserve showed growing confidence in the US economy, ramping up the chances of a December interest rate hike. The Bank of Japan maintained its current pace of monetary stimulus, clinging to hopes that an economic recovery is in sight despite soft domestic capital expenditure and challenging global business conditions. The central bank also kept intact its assessment that while exports and output were feeling the pain from weak emerging market demand, Japan’s economy has continued to recover moderately. As widely expected, the BOJ reiterated its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($650 billion) through purchases of government bonds and risky assets. Japan’s trade balance rose to a seasonally adjusted -0.20T compared to -0.31T in the preceding month whose figure was revised up from -0.36T. Japan’s All Industries Activity Index fell to a seasonally adjusted -0.2% compared to -0.1% in the preceding month whose figure was revised up from -0.2%.

Indonesia’s total outstanding foreign debts grew at a slower pace through the third quarter, with both the government and the private sector reluctant to take on more overseas loans amid a weakening economy. As of the end of September, total outstanding foreign debts in Indonesia stood at $302.4 trillion, up by 2.7 percent from the same period last year. That compares to 6.2 percent year-on-year growth at the end of June, when foreign debt stood at $304.5 trillion.