Post Session: Quick Review

Indian equity benchmarks staged an enthusiastic performance on Monday by rallying over three fourth of a percent, with frontline gauges recapturing their crucial 26,000 (Sensex) and 7,900 (Nifty) levels. Sentiments remained positive since beginning of the trade and barring intermittent mild profit booking attempts, the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Sentiments remained up-beat with World Bank chief economist Kaushik Basu indicating that the bank may revise its GDP growth projection for India after it goes for a stock-taking in a few months. He also added that the recession in Brazil and Russia and slowdown in China have made India the leading economy in terms of growth prospects for the first time this year.

Some support also came with the report that India could become the world's third largest economy after 2030 and its ascension could see France and Italy kicked out of the exclusive G8 group or its membership increased to 10 to accommodate India and Brazil. India's projected GDP in 2030 was $10,133 billion, behind America’s $32,996 billion and China at the top with a projected GDP of $34,338 billion.

Sentiments also got some boost with Finance Minister Arun Jaitley’s statement that structural reforms including GST, rationalising direct taxes and ease of doing business are among top priorities for New Year. Moreover, traders overlooked industry body Ficci’s statement that the revival prospects for India’s manufacturing sector in the October-December quarter seems to be weakening mainly due to a sluggish exports scenario. Based on expectations in different sectors, Ficci in its latest survey pointed out that ten out of twelve sectors were likely to witness low to moderate growth.

On the global front, European markets exhibited mixed trend in early deals after re-opening, following the Christmas holiday, with investors seen as reluctant to place strong bets in thin year-end trading. However, Asian markets ended mostly in red amid lack of immediate directional cues in light year-end trade, although Japanese shares managed to rise following a rebound in crude oil prices from multiple-year lows.

Back home, covering-up of pending short positions by speculators ahead of the futures and options expiry on Thursday supported the upside. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 66.13 per dollar at the time of equity market closing against the Wednesday’s close of 66.22 on the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. Stocks related to oil and gas counter remained buzzing, as the  Chief Economic Advisor Arvind Subramaniam has said that even after GST, petrol and other petroleum products would continue to be taxed the way now both by the Centre and states.

The NSE’s 50-share broadly followed index Nifty rose by over sixty points and ended above the psychological 7,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around two hundred points to finish above the psychological 26,000 mark. Broader markets too were traded with traction and ended the session with a gain of around half a percentage point.

The market breadth remained in favor of advances, as there were 1,541 shares on the gaining side against 1,153 shares on the losing side, while 260 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26034.13, up by 195.42 points or 0.76% after trading in a range of 25856.86 and 26073.41. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices too ended in green; the BSE Mid cap index was up by 0.14%, while Small cap index gained 0.47%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.34%, Auto up by 0.96%, Power up by 0.93%, Bankex up by 0.92% and Energy up by 0.79%, while Telecom down by 0.93%, Metal down by 0.77%, Basic Material down by 0.40% and Capital Goods down by 0.10% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.78%, Dr. Reddys Lab up by 3.67%, Sun Pharma Inds. up by 2.88%, Tata Motors up by 2.88% and ONGC up by 2.37%. On the flip side, Tata Steel down by 3.42%, Bharti Airtel down by 2.25%, Mahindra & Mahindra down by 0.61%, BHEL down by 0.58% and GAIL India down by 0.48% were the top losers. (Provisional)

Meanwhile, Federation of Indian Chambers of Commerce and Industry (Ficci) in its latest quarterly survey has indicated that due to sluggish exports scenario, the revival prospects for India's manufacturing sector in the October-December quarter of the ongoing fiscal seem to be weakening down, as a lesser percentage of respondents expect high growth to continue in the quarter under review.

Ficci in its survey has said that the percentage of respondents expecting higher growth in the December quarter has gone down to 55 per cent as compared to 63 per cent for the previous quarter, adding that exports are primarily responsible for this less optimistic outlook,  besides domestic factors like poor demand conditions, high interest costs. The export outlook for manufacturing in the third quarter followed its trajectory downwards, as the proportion of respondents expecting higher exports in the quarter is 24 per cent as compared to 36 per cent in the September quarter and 33 per cent in April-June of the current fiscal.

The survey pointed that in terms of order books indicating a muted demand conditions, 44 per cent respondents reported higher order books for the October-December quarter which is almost the same as that of the previous quarter. Besides, in terms of investment 68 per cent respondents in the third quarter said that they do not have any plans for capacity additions for the next six months as compared to 73-75 per cent in the previous quarters, implying slack in the private sector investments in manufacturing to continue. Poor demand conditions, high cost of borrowing, delayed clearances and cost escalation are some of the major constraints which are affecting the expansion plans of the respondents.

Further, the survey gauges the expectations of manufacturers for the third quarter for twelve major sectors namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather and footwear, machine tools, food, tyre and textiles machinery.

The CNX Nifty ended at 7917.40, up by 56.35 points or 0.72% after trading in a range of 7863.00 and 7937.20. There were 33 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 3.72%, Tata Motors up by 3.26%, NTPC up by 3.23%, Sun Pharma up by 2.90% and ICICI Bank up by 2.35%. On the flip side, Tata Steel down by 3.36%, Bharti Airtel down by 2.35%, ACC down by 1.05%, Grasim Industries down by 0.90% and Idea Cellular down by 0.85% were the top losers. (Provisional)

European markets were trading mixed; UK’s FTSE 100 increased 13.66 points or 0.22% to 6,254.64, while France’s CAC decreased 16.16 points or 0.35% to 4,647.02 and Germany’s DAX was down by 2.91 points or 0.03% to 10,724.73.

Asian equity markets ended mostly in red on Monday, led by the biggest loss in a month for Chinese shares as industrial profits declined and a looming revamp of the nation's initial public offering system gave investors little reason for optimism. Data showed that profits earned by Chinese industrial companies in November fell 1.4 percent from a year earlier, marking a sixth consecutive month of decline, although the figures improved from October's 4.6 per cent fall. Hong Kong stocks too moved lower, driven by a slump in mainland shares on the first trading day after last week's Christmas holiday. However, Japanese stocks gained ground in subdued trading after a rebound in global crude oil prices helped offset disappointing November production and retail figures.