Benchmarks extend winning streak for third straight session

Extending their winning streak for third day in a row, Indian equity benchmarks ended the session with a gain of over half a percent on Wednesday. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the government is willing to scrap the proposed 1% additional tax levy under the goods and services tax (GST) regime, but ruled out putting the new tax rate under GST in the Constitution amendment bill itself or setting up a dispute resolution panel. He also said it is almost certain that the final tax rate in GST will be below 18%. Some support also came in with Arun Jaitley’s statement that the government will achieve its fiscal deficit target without any cuts in the government spending.

Traders overlooked weak India’s merchandise exports data, which shrank for a 12th straight month in November, falling an annual 24.43 percent. Indian exports during November, 2015 were valued at $ 20014.22 million in Dollar terms, over 24 percent lower than the level of $26485.71 million during November.

Global cues remained supportive with European counters making a firm start with CAC, DAX and FTSE were trading in the green in early deals on Wednesday, with investors awaiting the outcome of a crucial rate-setting meeting of the US Federal Reserve for hints about the market's near-term direction. Asian markets rallied, led by over two and a half percent gains in Japanese market after the country’s manufacturing activity continued to expand in December, though at a slightly slower pace than in the previous month.

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. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 66.78 per dollar at the time of equity market closing against the Tuesday’s close of 66.93 on the Interbank Foreign Exchange on the back of dollar-selling by custodian banks. Some support also came with report that the foreign portfolio investors (FPIs) bought shares worth a net Rs 48.67 crore yesterday as per provisional data released by the stock exchanges.

Buying in Oil shares too aided sentiments following slight rebound in global crude oil prices. Shares of PSU oil marketing companies too remained in limelight on account of lower-than-expected cut in petrol and diesel prices. Petrol and diesel prices on Tuesday were cut by 50 paise and 46 paise a litre, respectively, though the government has raised excise duty on petrol and diesel taking advantage of the fall in global crude prices. Also, sugar stocks edged higher for second straight session after a bill was passed by the Lok Sabha to hike the sugar cess ceiling from Rs 25 to Rs 200 per quintal. Shares related to automobile companies were trading mixed on the bourses after the Supreme Court banned registration of luxury diesel cars until March 31, 2016.

The NSE’s 50-share broadly followed index Nifty gained by over fifty points to end above its psychological 7,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and seventy points to end near its crucial 25,500 mark. The broader markets too traded with traction and ended the session with a gain of around one third of a percent. The market breadth remained in favour of advances, as there were 1,426 shares on the gaining side against 1,276 shares on the losing side while 225 shares remain unchanged.

Finally, the BSE Sensex surged by 173.93 points or 0.69% to 25494.37, while the CNX Nifty gained 50.00 points or 0.65% to 7750.90.

The BSE Sensex touched a high and a low 25572.90 and 25372.47, respectively. The BSE Mid cap index was up by 0.35 %, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.71%, PSU up by 1.33%, Power up by 1.30%, TECK up by 1.30% and Bankex up by 1.16%, while FMCG down by 0.58%, Consumer Durables down by 0.58% and Auto down by 0.51% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.99%, Bharti Airtel up by 3.83%, ICICI Bank up by 2.29%, Lupin up by 1.95% and Infosys up by 1.72%. On the flip side, Mahindra & Mahindra down by 5.44%, ITC down by 0.96%, Wipro down by 0.64%, Hindalco down by 0.32% and Hindustan Unilever down by 0.30% were the top losers. 

Meanwhile, for the second time in row, PSU oil marketing companies (OMCs) have slashed price of petrol and diesel by 50 paise per litre and 46 paise per litre respectively. The new rates announced by the oil marketing companies (OMCs) are effective from December 15, 2015. Following the change, petrol will cost Rs 59.98 per litre in Delhi as against Rs 60.48 per litre, while diesel will cost Rs 46.09 as compared to Rs 46.55 now. At the last revision on December 01, OMCs had slashed price of petrol and diesel by 58 paise per litre and 25 paise per litre respectively.

The net impact of the crude oil prices and Rupee depreciation have warranted a reduction of at least Rs 2 per litre but the reduction is much lower than an anticipated decrease as oil companies left cushion for the government to mop up gains accruing from global oil prices dipping to multi-year lows and also the government may like to raise excise duty on the two fuels to mop up its revenues as it has done five times in last one year.

PSU oil marketing companies Indian Oil Corporation, Bharat Petroleum Corp and Hindustan Petroleum Corp revise petrol and diesel prices on 1st and 16th of every month based on average imported cost and rupee-dollar exchange rates in the previous fortnight. The oil companies have said that the movement of prices in the international oil market and INR-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes.

The CNX Nifty touched a high and low 7776.60 and 7715.75 respectively.  

The top gainers on Nifty were Bharti Airtel up by 4.06%, ONGC up by 3.67%, Cairn India up by 3.48%, Power Grid up by 2.97% and Idea Cellular up by 2.69%. On the flip side, Mahindra & Mahindra down by 5.28%, Asian Paints down by 1.55%, ITC down by 1.10%, Hindalco down by 0.82% and PNB down by 0.82% were the top losers. 

European Markets were trading in green; France’s CAC was up by 0.41%, Germany’s DAX was up by 0.21% and UK’s FTSE was up by 0.72%.     

Asian equity markets ended in green on Wednesday, with sentiment helped by broad gains on Wall Street before an expected rise in U.S. interest rates later in the day. Hong Kong stocks rebounded and breaking a nine-session losing streak as energy shares surged. Chinese shares closed higher, with energy stocks gaining ground after China's top planning body, the National Development and Reform Commission, suspended a retail oil price cut that was scheduled for Wednesday and said it would adjust the current pricing mechanism in a bid to combat air pollution, and news that China plans to issue significantly more government bonds next year to aid the economy.