Benchmarks bid adieu to the year 2015 on an optimistic note

The Indian equity markets snapped the calendar year 2015 on a solid note with an optimism of a great year ahead. Revival in corporate earnings, a stable monsoon after two successive drought years and progress on tax reforms can be key domestic triggers for the markets in 2016. Today, after training in tight range near neutral line for most part of the session, the key gauges managed to gain some momentum and ended the session with the gain of over half a percent. Sentiments got some support with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 152.20 crore on December 30, 2015. Besides, short-covering by speculators in view of December series expiry in the futures and options space also supported the upside. Markets also derived some encouragement with falling oil prices and ensuing mitigation of India’s current account deficit. However, gains remained capped with the head of the International Monetary Fund (IMF) Christine Lagarde’s statement that global economic growth will be 'disappointing' next year. She said the prospect of rising interest rates in the US and an economic slowdown in China were contributing to uncertainty and a higher risk of economic vulnerability worldwide. Furthermore, Finance minister Arun Jaitley said that subdued global economy and moderate private sector investment will continue to pose challenge in the next year.

On the global front, Asian shares turned mixed on the final trading day of 2015 as a renewed slide in oil prices weighed on energy stocks and worries about slowing growth in China kept investors nervous. However, holidays limited the damage in Asian markets on Thursday with many either closed or shutting early. Stock markets in Australia, Hong Kong, Singapore and New Zealand closed early for New Year's Eve. Markets in Japan, South Korea, Indonesia and Thailand were closed for holidays. 

Back home, the markets got off to a positive start despite the mixed cues from the global peers. Investors remained cautious early in the day but sentiments improved as the day progressed. The bourse moved in a narrow range with a positive bias and touched their intraday lows in late morning trade. However, second half of the session saw the key gauges capitalize on the momentum and spurt to session’s highest levels in dying hour. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Finally the NSE’s 50-share broadly followed index Nifty, climbed by over half a percent and settled below the crucial 7,950 support level, while Bombay Stock Exchange’s Sensitive Index Sensex amassed one hundred and fifty points and closed above the psychological 26,100 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 domestic sentiments. On the BSE sectoral space, the Realty index soared by over one and half a percent being the top gainer, followed by the TECK and IT counters that too gained good traction and went home with over a percent gains. On the flipside, the Consumer Durables, Banking and Capital Goods sectors languished at the bottom of the table with losses of 0.21%, 0.09% and 0.08% respectively, being the only laggards in the space.

The market breadth remained in favour of advance, as there were 1465 shares on the gaining side against 1163 shares on the losing side, while 283 shares remained unchanged.

Finally, the BSE Sensex gained 157.51 points or 0.61% to 26117.54, while the CNX Nifty ended up by 50.10 points or 0.63% to 7,946.35.

The BSE Sensex traded in a range of 26147.63 and 25941.91. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices made a positive closing; the BSE Mid cap index ended up by 0.35%, while Small cap index ended up by 0.49%.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, TECK up by 1.18%, IT up by 1.09%, Metal up by 0.81% and Oil & Gas up by 0.73%, while Consumer Durables down by 0.21%, Bankex down by 0.09% and Capital Goods down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.18%, Tata Motors up by 0.68%, Dr. Reddys Lab up by 0.62%, NTPC up by 0.52% and BHEL up by 0.50%. On the flip side, Infosys down by 1.60%, TCS down by 1.37%, SBI down by 1.18%, Maruti Suzuki down by 1.08% and Reliance Industries down by 1.01% were the top losers.

Meanwhile, amid the concerns of slowing growth, Finance Minister Arun Jaitley has said that Indian economy needs to grow by additional 1-1.5 percentage points to sustain wage hike and other benefits given to workers and the poor. He said that “Our country is growing at a good pace of 7.5 per cent at a time when the global economy is experiencing a slowdown, which is appreciable in itself; but we need to increase our growth rate. We have to at least increase it by 1-1.5 per cent”.

Jaitley further said that we need to increase our economic activities as this will result in a rise in revenues, which then can help to reduce additional financial burdens. In the coming year, he said, the Centre would have to bear a burden of Rs. 1.02 lakh crore on account of the implementation of the Seventh Pay Commission recommendations, besides the burden from the one rank one pension for veterans.

He also said that the government is ready to have dialogue with the trade unions with regard to wage increase, as its view is that the benefits of economic development should first accrue to labourers and the poor. He said minimum wages of labour should be at least respectable and take care of inflation.

FM pointed that good monsoon can add cutting edge to growth numbers. He said low global crude oil prices have been a blessing in disguise for the government, helping to bolster resources for higher investment. Recently, the government scaled down its GDP growth estimates in its Mid-Year Economic Analysis for this financial year to 7-7.5% from 8.1-8.5% on account of a rainfall deficit and a slowdown in exports.

The CNX Nifty traded in a range of 7,955.55 and 7,891.15. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.44%, ZEEL up by 2.42%, GAIL up by 2.34%, HCL Tech up by 2.08% and Infosys up by 1.91%. On the flip side, PNB down by 1.53%, Vedanta down by 1.36%, Axis Bank down by 1.18%, Yes Bank down by 1.13% and Hero MotoCorp down by 0.91% were the top losers.

European markets were trading in red; UK’s FTSE 100 was down by 0.18% and France’s CAC down by 0.22%.

Asian equity markets ended mostly in red on the final trading day of 2015 as a renewed slide in oil prices weighed on energy stocks and worries about slowing growth in China kept investors nervous. Chinese shares finished a volatile 2015 on a sour note, sliding almost one percent on the final day of trading as the Yuan slipped to a 4-1/2-year low against the dollar, but still jumped almost 10 percent over the year. However, holidays limited the damage in Asian markets on Thursday with many either closed or shutting early. Japan was one of the markets closed on Thursday, though it was also one of the better performers this year with gains of 9.1 percent for the Nikkei. Stock markets in Hong Kong, Malaysia and Singapore closed early today for New Year's Eve. Markets in South Korea, and Indonesia were closed for holidays.