Benchmarks add half a percent gain; Sensex recaptures 25,100 mark

Indian equity benchmarks ended the volatile day of trade with a gain of around half a percent on Monday with frontline gauges recapturing their crucial 25,100 (Sensex) and 7,650 (Nifty) levels. After a gap-down opening, markets showed great amount of resilience to enter into green terrain, as investors took encouragement from report that Industrial output grew by 9.8 per cent in October on the support of robust demand for manufactured products in the festival month compared to just 3.6 per cent in September. Some support also came with report that foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has surged by 20 percent to $1.46 billion (Rs 9,404 crore) during April- September 2015 as compared to $1.22 billion in the same period last fiscal. The services sector contributes over 60% to the India’s Gross Domestic Product (GDP) and receives high foreign inflows.

However, gains remained capped as anxiety continues to prevail at the D-Street ahead of the US Federal Reserve meet due later this week. Also, oil prices sank to fresh seven-year lows with Brent below $39 a barrel for the first time since December 2008 after the IEA, warned that demand growth was starting to slow. Weakness in Indian rupee too dampened sentiments as greenback strengthened on prospects of a US Federal Reserve hike.

On the global front, European counters were trading mostly in green in early deals ahead of euro zone industrial production data and ECB president Mario Draghi speech for hints on any potential future monetary policy moves. Asian markets ended mostly in red amid growing anxiety over this week’s Federal Reserve interest-rate decision.

Back home, bout of volatility was witnessed in dying hour of trade with benchmarks managing to regain crucial levels despite entering into red terrain. Some support also came in with wholesale inflation coming at -1.99 percent in November compared to -3.81 percent in October. In November last year, the WPI-based inflation was (-) 0.17 per cent. However, wholesale food price inflation in November doubled to 5.20 percent year-on-year as compared to October on account of sharp rise in prices of pulses, onions and vegetables.

Buying in banking counter too aided sentiments on report that the government is likely to empower the proposed Bank Board Bureau to select audit firms for public sector banks as part of its larger initiative to strengthen their corporate governance practices. Shares of steel companies remained on buyers’ radar after the government imposed import duties for five years on some stainless steel imports from China, the European Union and the United States on Friday. Shares of sugar companies remained on buyers’ radar after the government plans to increase the cess on sugar by almost Rs 100 per quintal to fund its ambitious programme of paying Rs 4.50 per quintal directly into the bank accounts of growers.

The NSE’s 50-share broadly followed index Nifty rose by around forty points and ended above the psychological 7,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over hundred points to finish above the psychological 25,000 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,490 shares on the gaining side against 1,148 shares on the losing side while 217 shares remain unchanged.

Finally, the BSE Sensex surged by 105.92 points or 0.42% to 25150.35, while the CNX Nifty gained 39.60 points or 0.52% to 7650.05.   

The BSE Sensex touched a high and a low 25194.15 and 24867.73, respectively. The BSE Mid cap index was up by 0.66 %, while Small cap index was up by 0.40%.    

The top gaining sectoral indices on the BSE were Metal up by 2.40%, IT up by 0.83%, TECK up by 0.79%, Healthcare up by 0.71% and Auto up by 0.40%, while Realty down by 0.19%, Capital Goods down by 0.15%, Oil & Gas down by 0.14% and Bankex down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 3.01%, Coal India up by 2.62%, Hindustan Unilever up by 1.98%, Maruti Suzuki up by 1.97% and Mahindra & Mahindra up by 1.96%. On the flip side, Axis Bank down by 2.02%, Tata Motors down by 1.65%, ONGC down by 0.95%, Bharti Airtel down by 0.92% and Larsen & Toubro down by 0.77% were the top losers.

Meanwhile, India has signed an agreement with Japan for amending the double taxation avoidance agreement (DTAA) and for preventing fiscal evasion that was originally signed in 1989. This move will help in reducing tax avoidance and act as a deterrent against tax evasion and will also enable assistance in collection of taxes between India and Japan.

Revenue Secretary Hasmukh Adhia and Ambassador of Japan Kenji Hiramatsu signed the agreement on behalf of the two countries. Finance Ministry has said that the protocol provides for internationally accepted standards for effective exchange of information on tax matters, including bank information and information without domestic tax interest.

Further, it also allows for sharing of information received from Japan in respect of an Indian resident with other law enforcement agencies with authorisation of the competent authority of Japan and vice versa. As per the agreement, it is envisaged that both India and Japan will lend assistance to each other on collection of revenue claims. The protocol allows exemption of interest income from taxation in the source country with respect to debt claims insured by the government or government-owned financial institutions.

The CNX Nifty touched a high and low 7663.95 and 7551.05 respectively. 

The top gainers on Nifty were Adani Ports &Special up by 5.70%, Hindalco up by 3.67%, Coal India up by 3.07%, ZEEL up by 2.69% and Ambuja Cement up by 2.62%. On the flip side, Axis Bank down by 2.13%, Tata Motors down by 1.57%, Bharti Airtel down by 1.15%, ONGC down by 0.86% and SBI down by 0.75% were the top losers.

European Markets were trading in green; France’s CAC was up by 1.17%, Germany’s DAX was up by 0.43% and UK’s FTSE was up by 0.51%.    

Asian equity markets closed mostly lower on Monday, as investors remain focused on the mid-week decision from the US Federal Reserve. Japan markets closed in negative territory as global oil prices extended their decline. However, Chinese markets closed in positive territory due to encouraging industrial output and retail sales data illustrating signs of stabilization in the world's second-largest economy, and the China Foreign Exchange Trade System (CFETS), a division of the country's central bank, said the yuan could remain stable in medium to long term. China's industrial output grew 6.2% year- over-year in November, the highest level since June, and retail sales jumped 11.2% to beat forecasts, offering some respite for markets worried about the economy.