Benchmarks snap six day losing streak; Sensex regains 25,200 mark

After six straight sessions of feeble performances, Indian benchmark equity indices finally showed some enthusiasm as market bulls eagerly waited for some significant upside triggers to cover the huge pile of short positions that got build up in the recent past. The frontline indices registered a gain of around a percent, recapturing their crucial 25,200 (Sensex) and 7,650 (Nifty) bastions amid tentative improvement in risk appetite of investors who resorted to hefty bottom fishing after the recent brutal risk aversion. Sentiments remained sanguine with report that indirect tax collection jumped 34.3 percent to Rs 4,38,291 crore during the first eight months of current financial year. 

Investors overlooked report that foreign investors continue to sell Indian shares ahead of the US Federal Reserve’s December 16 meeting, where it is widely expected to raise interest rates. Foreign investors have sold Rs. 4,651 crore ($696.49 million) worth of Indian stocks already in December, on track to surpass the Rs 7,074 crore ($1.06 billion) sold in November. Meanwhile, the uncertainty over the crucial GST Bill has loomed back as the hopes of tax reform being passed in the current session of Parliament has faded.

Buying accelerated in last leg of trade as European counters turned green, after a weak start, after crude oil rising from a six-year low. However, Asian equity indices ended mostly in red with Japanese Nikkei share average declining to a five-week closing low as a sudden surge in the yen hit shares of exporters such as Fanuc and Honda Motor, though the trading volume was low.

Back home, 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 Wednesday’s close of 66.83 on the Interbank Foreign Exchange. Rally in real estate stocks too aided sentiments after the Union Cabinet approved the Real Estate (Regulation and Development) Bill, 2015. The Real Estate Bill provides uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector.

Stocks related to the shipping counter too remained on buyers’ radar, as the Union Cabinet has cleared a Rs 4,000-crore package to spur India’s ship building industry, combined with a slew of incentives which include the right of first refusal on all government purchases for Indian shipyards, tax incentives and the ‘infrastructure’ status for shipbuilding and ship repair industry.  Cheviot Company edged higher after the CCEA approved mandatory use of jute packaging material for foodgrains and sugar. CCEA decided that at least 90% of foodgrain output and 20% of sugar production has been reserved for packaging in jute.

The NSE’s 50-share broadly followed index Nifty rose by over seventy points and ended above the psychological 7,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and ten points to finish above the psychological 25,200 mark. Broader markets too were traded with traction throughout the trade and ended the session with a gain of around a percentage point. The market breadth remained in favor of advances, as there were 1,852 shares on the gaining side against 818 shares on the losing side while 184 shares remain unchanged.

Finally, the BSE Sensex surged by 216.27 points or 0.86% to 25252.32, while the CNX Nifty soared by 70.80 points or 0.93% to 7683.30.  

The BSE Sensex touched a high and a low 25289.58 and 25034.14, respectively. The BSE Mid cap index was up by 0.90 %, while Small cap index was up by 1.24%.   

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.89%, Metal up by 1.65%, Realty up by 1.63%, IT up by 1.31%, TECK up by 1.20%, while there was no losers on the sectoral index.

The top gainers on the Sensex were Reliance Industries up by 3.71%, Hindalco up by 2.71%, Tata Steel up by 2.69%, NTPC up by 2.50% and HDFC up by 2.30%. On the flip side, Mahindra & Mahindra down by 1.66%, Lupin down by 1.42%, Tata Motors down by 1.18%, SBI down by 1.02% and BHEL down by 0.83% were the top losers.

Meanwhile, foreign Investment Promotion Board (FIPB) will be taking up17 Foreign Direct Investment (FDI) proposals, in its meeting on December 16.The proposals include those of Cadila Healthcare and Holcim (lndia) followingrecent changes in the FDI policy. Proposals of Cadila Healthcare and Holcim(lndia) were earlier recommended by the FIPB for consideration of CabinetCommittee on Economic Affairs (CCEA), but are listed on the agenda of theDecember 16 meeting.

FIPB had recommended the Rs 5,000 crore Cadila Healthcareproposal for consideration of CCEA. Cadila Healthcare is seeking approval forfresh equity infusion of up to Rs 5,000 crore under FDI route by QIBs throughQualified Institutional Placement on a private placement basis for theexpansion of the business.

Besides these two, the FIPB will also take up 15 otherinvestment proposals including that of HSBC Securities and Capital Markets(lndia), Gulf Quarry General Trading FZC, Sai Life Sciences, and EquitasHoldings. A proposal by Volvo Asset Finance India that was deferred in the lastmeeting will also be taken up.

According to the data of Department of Industrial Policy andPromotion (DIPP), during 2014-15 fiscal, FDI grew 27 percent year-on- year to$30.93 billion compared to that of $24.29 billion in 2013-14 fiscal year. Indiaallows FDI in most of the sectors through automatic route, but in certainsegments considered sensitive for the economy and security, the proposals haveto be first cleared by FIPB.

The CNX Nifty touched a high and low 7691.95 and 7610.00 respectively. 

The top gainers on Nifty were Reliance Industries up by 3.64%, Tata Steel up by 3.11%, Hindalco up by 2.71%, HDFC up by 2.56% and Bajaj Auto up by 2.55%. On the flip side, Lupin down by 1.74%, Mahindra & Mahindra down by 1.50%, Yes Bank down by 1.47%, Tata Motors down by 1.26% and PNB down by 1.04% were the top losers.  

European Markets were trading mostly in green; France’s CAC was up by 0.14% and Germany’s DAX was up by 0.21%, while UK’s FTSE was down by 0.26%.    

Asian equity markets ended mostly in red on Thursday as investors waited to see what the Federal Reserve will do at next week's crucial meeting. Further, the People's Bank of China allowed the yuan to depreciate against the dollar for a fourth consecutive day, sparking fears of competitive devaluations across Asia. Chinese shares ended lower after the China Securities Regulatory Commission said it would push ahead with a long-awaited reform to let companies and investors have more say in new share offerings as early as May. Japanese shares fell sharply to hit five-week lows amid the sudden strength in the yen hit shares of exporters such as Fanuc and Honda Motor, though trading volume was low. Hong Kong shares weakened, driven by continued weakness in resource shares, as investors remained wary of falling commodity prices and ahead of a likely US interest rate rise next week.