Benchmarks end near day’s high; bulls wake-up in late trade

Tuesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around half a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 25,300 (Sensex) and 7,700 (Nifty) bastions. Earlier, domestic bourses traded listless for most part of the day’s trade near their previous closing levels as sentiments remained dampened on the report that retail inflation rose to 5.41 per cent in November, 4th straight month of uptick as prices of vegetables, pulses and fruits went up further to push the rate of price rise above the Reserve Bank’s comfort level.

However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Traders drew some encouragement with report that Global rating agency Fitch has retained India's sovereign rating at BBB-/Stable -- the lowest investment grade and said that the country will continue to post good growth despite subdued prospect for the Asia Pacific region. Meanwhile, market participants will keenly watch the proceedings of the two-day US Federal Reserve meet which begins later today. The US central bank is widely expected to raise interest rates for the first time in almost a decade.

Positive opening in European counters too supported the sentiments. CAC, DAX and FTSE indices were trading with traction in early deals. The Paris market was helped by French pharmaceuticals group Sanofi, which climbed 4 per cent after it said it would swap some assets with Boehringer Ingelheim. Asian Markets ended the session mixed after crude oil prices which have been on the decline lately, rose in US trading session. Moreover, investors remained on sidelines ahead of an expected hike in US interest rates later this week.

Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 66.97 per dollar at the time of equity market closing against the Monday’s close of 67.11 on the Interbank Foreign Exchange. Some support also came from report that foreign institutional investors net bought index futures worth Rs 165 crore and stock futures worth Rs 124 crore on the NSE on Monday.

Buying in oil counters aided sentiments following slight rebound in global crude oil prices. FMCG stocks too edged higher despite rise in November consumer price inflation. Auto shares recouped early losses after witnessing selling pressure in early trades on concerns that the proposed ban on diesel vehicles by the NGT in Delhi could spill on to other states. On the flip side, select stocks from banking counter remained under pressure in anticipation of the rate hike by the US.

The NSE’s 50-share broadly followed index Nifty ended higher by around fifty points to end above below its psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over one hundred and seventy points to regain the psychological 25,700 mark. The broader markets too traded in-line with benchmarks and ended the session with a gain of over half a percent. The market breadth remained in favour of advances, as there were 1,584 shares on the gaining side against 1,062 shares on the losing side while 203 shares remain unchanged.

Finally, the BSE Sensex surged by 170.09 points or 0.68% to 25320.44, while the CNX Nifty gained 50.85 points or 0.66% to 7700.90.    

The BSE Sensex touched a high and a low 25342.78 and 25075.54, respectively. The BSE Mid cap index was up by 0.56 %, while Small cap index was up by 0.69 %.      

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.50%, Auto up by 1.31%, FMCG up by 1.05%, Realty up by 0.93% and Oil & Gas up by 0.73%, while Metal down by 0.22% and TECK down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.44%, Hindustan Unilever up by 2.28%, Reliance Industries up by 2.14%, ONGC up by 2.06% and Tata Motors up by 2.04%. On the flip side, Wipro down by 1.53%, ICICI Bank down by 1.04%, NTPC down by 1.02%, GAIL India down by 0.78% and Vedanta down by 0.77% were the top losers.   

Meanwhile, in order to boost the Make in India campaign, the government is considering a proposal to include micro, small and medium enterprises (MSMEs) in its definition of startups. The Department of Industrial Policy and Promotion (DIPP) is leading the exercise of formulating the startup policy, along with ministries such as finance, skill development and MSME among others.

Including MSMEs, collectively one of the biggest employers of people in India, is seen as positive for manufacturing and therefore employment generation, key aims of the Make in India programme. Besides, officials are also discussing specific criteria that would make an MSME eligible to be called a startup which would determine eligibility for incentives such as fewer compliance conditions, cheaper credit and tax benefits. In order to qualify as a startup, an entity would also have to meet certain financial standards besides having a level of innovation in its product or service.

The Start-Up India initiative is scheduled to be announced by Prime Minister Narendra Modi in January 2016 and the policy needs to be finalised by then. India wants to create an ecosystem that encourages entrepreneurship and is collecting suggestions from the startup community for steps that need to be taken to ensure that the Start-Up India initiative is a success.

The Start-Up India initiative announced by Modi in his Independence Day speech assumes significance given the thrust by the government toward employment generation. Startups are expected to create 250,000 jobs in India by 2020, up from 80,000 now.

The CNX Nifty touched a high and low 7705.00 and 7625.10 respectively.  

The top gainers on Nifty were Bosch up by 3.09%, Hindustan Unilever up by 2.64%, Lupin up by 2.35%, ONGC up by 2.30 and Reliance Industries up by 2.19%. On the flip side, Tech Mahindra down by 4.10%, PNB down by 2.73%, Idea Cellular down by 2.22%, Wipro down by 1.51% and ICICI Bank down by 1.33% were the top losers. 

European Markets were trading in green; France’s CAC was up by 2.28%, Germany’s DAX was up by 2.10% and UK’s FTSE was up by 1.66%.    

Asian equity markets ended mixed on Tuesday after crude oil prices which have been on the decline lately, rose in US trading session. Japanese shares though declined to a 7-1/2-week low, as investors avoided riskier assets ahead of the historic Federal Reserve meeting ending Wednesday. The US central bank is widely expected to raise its target range for the federal funds rate to 0.25-0.50 percent, bringing an end to the seven-year period of near-zero interest rates. Chinese stocks too ended slightly lower, with a correction in banking and resource shares countering a surge in property firms that was triggered by hopes of more support measures for the real estate market.