Post Session: Quick Review

Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered over half a percent gain in very volatile session of trade. Sensex and Nifty managed to regain their crucial 24,800 and 7,550 bastions respectively. Earlier, markets failed to hold on to their initial gains and entered into red terrain in noon deals as sentiments turned down-beat on report that the industrial output for the month of November contracted to 3.2%, its sharpest contraction in four years, as compared to an expressive 9.4% growth in the previous month. The fall in the output levels is attributed to fewer days owing to Diwali and the incessant rains in Chennai that affected the production capacity. Also, the consumer inflation for the month of December rose to 5.61% as against 5.4% when compared month on month.

Selling got accelerated on report that foreign institutional investors (FIIs) continued to become net sellers in equities. They sold net amount of about Rs 4,000 crore from equities in past seven trading sessions through secondary markets. The indices even went on to test important psychological 24,400 (Sensex) and 7,450 (Nifty) levels, but the key gauges got strong support near those intraday low levels as they showcased a smart recovery from thereon which ended up with a gain of over half a percent as investors continued hunt for fundamentally strong stocks.

Firm opening in European markets too aided sentiments. European shares extended the previous session’s gains on Wednesday, with better-than-expected Chinese trade data tempering some of the concerns about a slowdown in the world’s second largest economy. Asian markets ended mostly in green despite lingering headwinds over China and lower commodity prices.

Back home, appreciation in Indian rupee too supported the sentiments. The rupee has gained marginally to trade at 66.82 against the US dollar as compared with its previous close of 66.87. Capital goods stocks such as Larsen & Toubro and BHEL fell on disappointing factory data that came out late on Tuesday. IT stocks exhibited mixed trend after the US on Tuesday notified massive increase in fees in certain categories of the popular H-1B and L-1 visas which would mainly hit Indian IT companies. Meanwhile, India’s largest IT services company, Tata Consultancy Services (TCS), has put in a lacklustre performance in December quarter. The dollar revenue of the company dropped 0.3% to $4.15 billion, while net profit was flat sequentially at $926 million, impacted by deluge in Chennai.

The NSE’s 50-share broadly followed index Nifty gained over fifty points to end above the psychological 7,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and seventy points to finish above its psychological 24,800 mark. Broader markets, however, witnessed selling pressure and ended the session with a cut of around a percentage point.

The market breadth remained in the favour off decliners, as there were 649 shares on the gaining side against 2,155 shares on the losing side while 167 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24854.11, up by 172.08 points or 0.70% after trading in a range of 24387.69 and 24956.54. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.46%, while Small cap index down by 1.76%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 1.57%, Auto up by 0.89%, IT up by 0.69%, Banking up by 0.66% and Oil & Gas up by 0.63%, while Telecom down by 1.72%, Capital Goods down by 1.34%, Utilities down by 1.25%, Power down by 1.11% and Realty down by 1.04% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 3.14%, Reliance Industries up by 2.69%, Tata Motors up by 2.30%, Mahindra & Mahindra up by 1.59% and Hindustan Unilever up by 1.32%. On the flip side, Adani Ports &Special down by 2.86%, Larsen & Toubro down by 2.52%, Bharti Airtel down by 1.95%, BHEL down by 1.86% and Lupin down by 1.69% were the top losers. (Provisional)

Meanwhile, with an aim to improve ease of doing business, the government is likely to begin a sweeping revamp of direct taxes in the Budget 2016-17 that Finance Minister Arun Jaitley will present next month. This move comes as the Narendra Modi government has pledged a predictable and non-adversarial tax regime. Under this there will be two themes driving the revamp, such as simplification and rationalization. It will help to create more positive perception of India’s tax environment.

Besides, the attempt will be to remove clutter and simplify the tax law. The government has already spelt out this vision with its plan for corporate tax, which is to scrap the excess of exemptions and lower the levy. This will help in making the life simpler for companies and the government, making compliance easier, boosting business and driving up revenue.

In the budget 2015-16, Jaitley had said the government wants to lower the corporate tax rate to 25% over the next four years. The Budget next month will carry the process forward besides taking on board some of the suggestions made by the Justice RV Easwar committee on simplifying tax laws. The panel is expected to touch upon many areas, including defining royalties and fees for technical services.  Also on the agenda are streamlining the minimum alternate tax (MAT) regime, the subject of many disputes, and taxation of dividends. The panel has been asked to give its first set of recommendations by January end so that these can be taken up in this year's Budget.

The CNX Nifty ended at 7562.40, up by 52.10 points or 0.69% after trading in a range of 7425.80 and 7590.95. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Infosys up by 3.19%, Reliance Industries up by 3.00%, Tata Motors up by 2.70%, Indusind Bank up by 2.53% and HCL Tech up by 2.02%. On the flip side, Vedanta down by 3.92%, Idea Cellular down by 3.77%, Adani Ports &Special down by 2.70%, Bharti Airtel down by 2.16% and TCS down by 2.06% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 67.11 points or 1.13% to 5,996.35, France’s CAC surged 71.94 points or 1.64% to 4,450.69 and Germany’s DAX was up by 137.64 points or 1.38% to 10,123.07.

Asian equity markets ended mostly in green on Wednesday after China reported improved exports in December, salving nerves about the world’s second largest economy. Data showed China's exports rose for the first time since June. China's exports unexpectedly rose 2.3 percent in December from a year earlier in yuan terms, after a 3.7 percent drop in the previous month. Imports dropped an annual 4 percent, an improvement over the previous month's 5.6-percent fall. Besides, a rebound in oil prices after seven days of declines also helped spur some bargain hunting in beaten-down shares. Japanese stocks rebounded sharply and posted their first gains of 2016 after better-than-expected China's trade data soothed sentiment and a weaker yen lifted oversold exporters.