Boisterous benchmarks stage a remarkable rally; Sensex ends above 26000 mark

Indian equity markets presented a good show on the first day of the F&O expiry week and after a flat start in the backdrop of mixed global cues, surged to post good gain for the day. Sentiments remained up-beat with World Bank chief economist Kaushik Basu’s statement 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. However, investor remained cautious with Ficci’s report, which indicates that the revival prospects for India's manufacturing sector in the October-December quarter seem to be weakening mainly due to a sluggish exports scenario. Exports are primarily responsible for this less optimistic outlook besides domestic factors like poor demand conditions, high interest costs etc.

On the global front, Asian markets ended mixed in post Christmas break trade, with Japanese market advancing, as the yen rally lost steam amid the release of some lackluster domestic economic data on industrial production and retail sales. Investors across asset markets were without some of the usual leads as most global markets were closed on Friday for Christmas. Further, European equities were trading mixed on the first day of the final trading week of 2015, with investors reluctant to place strong bets in thin year-end trading. Volumes on the DAX and the CAC were about 4 per cent of their 90-day daily average in the first hour of trading.

Back home, the benchmark got off to a soft start with the indices showing signs of consolidation in early trade as investors remained cautious ahead of F&O expiry of the December series, scheduled for December 31, 2015. But the frontline indices slowly but steadily started gathering steam and surged by around half a percent by late morning trades. Sentiments got some support 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. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. However, a mild profit booking in dying hour of trade ensured that the key indices shut shops off the intraday highs.

Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by close to a percent to settle above the crucial 7,900 support level while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated about two hundred points and closed above the psychological 26,000 mark. Moreover, the broader markets too showed a dramatic recovery after the bulls powered up post afternoon trades on the back of a recovery in global sentiments and went home with notable gains in the session despite underperforming their larger peers. On the BSE sectoral space, Auto counter remained the top gainer in the space with about a percent gains followed by the high beta- Power index which ended with similar gains. The Banking pocket too witnessed good buying interests as it gained well over half a percent. Shares of commercial vehicle makers edged higher on reports that the government is looking to notify 15 years as the end of life for commercial vehicles. The move to ban 15-year-old commercial vehicles, once implemented, will take millions of vehicles off the roads, thereby giving a big boost to demand for new commercial vehicles. Good buying was also witnessed in Pharma stocks like Dr Reddy's Labs, Sun Pharma, Lupin and Cipla on the report that Indian pharmaceutical firms are gearing up to tap new markets in 2016 as they look to consolidate their positions after a spate of mergers and acquisitions consummated this year. On the flipside, Metal counter languished at the bottom of the table with a cut of over half a percent while the Capital Goods sectors settled with moderate cut on the BSE. 

The market breadth remained in favor of advances, as there were 1540 shares on the gaining side against 1154 shares on the losing side, while 260 shares remained unchanged.

Finally, the BSE Sensex surged by 195.42 points or 0.76% to 26034.13, while the CNX Nifty gained 64.10  points or 0.82% to 7,925.15.

The BSE Sensex touched a high and a low 26073.41 and 25856.86, respectively. The broader indices ended in green, with the BSE Mid cap index ending up by 0.14%, while Small cap index ended higher by 0.47%.

The top gaining sectoral indices on the BSE were Auto up by 0.96%, Power up by 0.93%, Bankex up by 0.92%, PSU up by 0.74%, Oil & Gas up by 0.67%, while Metal down by 0.77%, Capital Goods down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 3.52%, NTPC up by 3.38%, Tata Motors up by 2.84%, ONGC up by 2.56% and Sun Pharma Inds. up by 2.52%. On the flip side, Tata Steel down by 3.59%, Bharti Airtel down by 2.14%, Mahindra & Mahindra down by 0.87%, BHEL down by 0.49% and HDFC down by 0.38% were the top losers.

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 touched a high and low 7,937.20 and 7,863.00 respectively.  

The top gainers on Nifty were Dr. Reddys Lab up by 3.75%, 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 3.40%, Bharti Airtel down by 2.33%, ACC down by 1.05%, Grasim down by 0.90% and IDEA down by 0.85% were the top losers.

The European markets were trading in red; Germany’s DAX declined by 23.91 points or 0.22% to 10,703.73 and France’s CAC decreased 23.14 points or 0.5% to 4,640.04.

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.