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

Thursday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of over 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 25,800 (Sensex) and 7,800 (Nifty) bastions. Key domestic indices started the day firmly tailing the global rally after the US Federal Reserve raised interest rates for the first time in nearly a decade and signalled its tightening cycle would be ‘gradual’. But the early euphoria fizzled out and markets turned choppy as the government appeared reconciled to miss the April 1 deadline to roll out the ambitious tax reforms with the Congress cold shouldering parliamentary affairs minister M Venkaiah Naidu’s call to meet afresh for talks on the GST bill.

Sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Sentiments remained up-beat after Fitch Ratings said that India’s less dependence on exports and improved external balances makes it better placed than many of its peers after the American central bank -- the US Federal Reserve -- raised its key interest rates. Credit rating agency also said that India is not immune to potential market jitters on account of interest rate hike by the US Fed, but favorable economic growth outlook makes it attractive for foreign investors. Some support also came with Chief Economic Adviser Arvind Subramanian’s statement that the rate hike by the US Federal Reserve is in line with global expectations and its impact on India will be ‘very minimal’ due to strong macroeconomic conditions.

Positive opening in European counters too supported the sentiments. CAC, DAX and FTSE all indices were trading in the green terrain in early deals, after investors saw the US Federal Reserve's move to raise interest rates for the first time in nearly a decade as a sign of confidence in the world's biggest economy. Asian markets rallied on Thursday, led by around two percent rise in Chinese benchmark, as the country allowed its currency to slip for a tenth straight session to hit its lowest since June 2011. The steady decline in turn puts pressure on other Asian currencies to depreciate to stay competitive.

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 66.50 per dollar at the time of equity market closing against its previous close of 66.73 on the Interbank Foreign Exchange on the back of heavy dollar-selling by custodian banks. Meanwhile, select stocks from metal and mining counter edged higher as the government has approved allotment of coal blocks to public sector entities for commercial mining, taking the industry a step closer to complete deregulation and allowing private entry. However, industrial commodities including base metals and energy might decline further following a 25 basis point interest rate hike by the US Federal Reserve.

The NSE’s 50-share broadly followed index Nifty ended higher by around a hundred points to end above its psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by around three hundred and ten points to regain the psychological 25,800 mark. The broader markets too traded with traction and ended the session with a gain of over one and a half percent. The market breadth remained in favour of advances, as there were 1,946 shares on the gaining side against 743 shares on the losing side while 212 shares remain unchanged.

Finally, the BSE Sensex surged by 309.41 points or 1.21% to 25803.78, while the CNX Nifty soared by 93.45 points or 1.21% to 7844.35.     

The BSE Sensex touched a high and a low 25831.31 and 25448.32, respectively. The BSE Mid cap index was up by 1.56%, while Small cap index was up by 1.72%.

The top gaining sectoral indices on the BSE were Metal up by 2.46%, Power up by 1.44%, Healthcare up by 1.39%, Auto up by 1.33% and Realty up by 1.30%, while there was no losers sectoral index on the BSE. 

The top gainers on the Sensex were Tata Steel up by 4.76%, Vedanta up by 3.75%, Hindalco up by 3.44%, Reliance Industries up by 3.10% and Bajaj Auto up by 2.96%. On the flip side, ONGC down by 0.97%, Axis Bank down by 0.45%, GAIL India down by 0.28%, Lupin down by 0.14% and Coal India down by 0.06% were the top losers.

Meanwhile, amid fall in global crude prices, the government has raised excise duty on petrol and diesel, to shore up its revenues without stoking inflation. The duty on petrol has been raised by 30 paise a litre while that on diesel is up a steeper Rs 1.17 per litre. This move can add an extra Rs 2,500 crore to the exchequer for the rest of the fiscal, helping it bridge the expected deficit in the direct taxes in the current fiscal.

After including additional and special excise duty, the total levy on unbranded petrol will be Rs 19.36 per litre as against the earlier Rs 19.06. On unbranded or normal diesel, total excise duty after including special excise duty will be Rs 11.83 per litre compared to Rs 10.66 earlier. Basic excise duty on branded petrol has been raised from Rs 8.24 per litre to Rs 8.54 a litre and the same on branded diesel from Rs 7.02 to Rs 8.19 per litre. This is the second increase in excise duty in less than six weeks. Earlier on November 7, the government had raised excise duty on petrol by Rs 1.60 per litre and on diesel by 30 paise a litre.

The government’s receipts from excise duty collection during April-November period rose 67.1% to Rs 1.7 lakh crore partly on account of duty increase in fuels and withdrawal of duty benefits given to automobiles and consumer goods.

The CNX Nifty touched a high and low 7852.90 and 7737.55 respectively.  

The top gainers on Nifty were Tata Steel up by 5.23%, Tata Power up by 4.44%, Hindalco up by 3.69%, Vedanta up by 3.63% and Reliance Industries up by 3.52%. On the flip side, Bosch down by 2.07%, Idea Cellular down by 1.44%, Cairn India down by 1.22%, Axis Bank down by 0.60% and ONGC down by 0.57% were the top losers. 

European Markets were trading in green; France’s CAC was up by 2.57%, Germany’s DAX was up by 3.06% and UK’s FTSE was up by 1.45%.     

Asian equity markets closed in green on Thursday, taking cues from a positive finish in Wall Street overnight after the Federal Reserve raised its target federal funds rate to a range of 0.25 to 0.5 percent. The rationale behind the move, the first since 2006, - Labor market has considerably improved this year and the central bank is confident of inflation rising over the medium term towards its 2 percent objective. China stocks ended higher as risk appetite improved after the Federal Reserve raised rates, as expected, removing a major source of uncertainty about the US central bank's policy.