Benchmarks extend winning streak for second straight session

Indian benchmark equity indices staged a blockbuster performance on the last day of the week by vehemently rallying over a percent in the session and re-conquering their psychological levels. Thursday’s optimism got spilled over into the Friday’s session helping the frontline indices in extending the winning momentum for second successive session, as encouraging global developments buttressed domestic sentiments. Investors continued to build hefty positions across the board as sentiments got a boost with reports that foreign direct investment (FDI) in the country doubled to about $ 4.5 billion in December 2015. Some support also came with the report that India is expected to grow by 7.6 per cent in the October-December quarter of the current fiscal -- the fastest pace of expansion in five quarters. According to the report, domestic demand witnessed during the festival season is expected to support growth in the third quarter, even as global headwinds have had an adverse impact on manufacturing and exports. Furthermore, Chief Economic Advisor Arvind Subramanian gave one more candle to investors by saying slump in oil, steel and cement prices presents India with an opportunity to build infrastructure at lower costs as well as shore up public and private spending. However, there was some cautiousness too with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017.

On the global front, Asian markets ended mostly higher on Friday amid reduced expectations for further interest rate increase from the US Federal Reserve in this calendar year. But, Japanese stocks declined as the Japanese yen strengthened against the dollar. European markets were little changed in choppy trade on Friday with investors reluctant to take up big positions before a key US jobs report that could provide clues on the Federal Reserve’s monetary policy outlook.

Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from global markets. The frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. However, hefty short covering in the late hours helped the indices to bounce to higher levels but mild resistance around the 24,650 and 7,500 levels pushed the key gauges back to a small extent by the end of trade. Nevertheless, the NSE’s 50-share broadly followed index - Nifty garnered over a percent to settle above the crucial 7,450 levels, while Bombay Stock Exchange’s Sensitive Index - Sensex smashed a double century and closed above the psychological 24,600 mark. Moreover, the broader markets too participated in the rally and closed with gains of over a percent. On the BSE sectoral space, good buying was seen across the board, as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in Metal counter which rallied by three percent, while high beta sectors like - Banking, Auto and PSU too surged in the session. Metal stocks gained on reports that India may set minimum import price on steel imports, while Pharma stocks witnessed a strong buying interest after Lupin surprised the Street with a better than expected December quarter numbers. The market breadth remained optimistic as there were 1620 shares on the gaining side against 1016 shares on the losing side while 135 shares remained unchanged.

Finally, the BSE Sensex surged 278.54 points or 1.14% to 24616.97, while the CNX Nifty ended up by 85.10 points or 1.15% to 7,489.10.

The BSE Sensex traded in a range of 24672.90 and 24345.79. There were 22 stocks on gainers side against 8 stocks declining on the index.

The broader indices made a positive closing; the BSE Mid cap index ended up by 1.90%, while Small cap index ended up by 1.21%.

The top gaining sectoral indices on the BSE were Metal up by 3.37%, Bankex up by 2.11%, Auto up by 1.60%, PSU up by 1.37% and Consumer Durables up by 1.14%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Lupin up by 9.04%, Axis Bank up by 4.40%, Cipla up by 3.58%, Tata Steel up by 3.47% and Tata Motors up by 3.47%. On the flip side, GAIL India down by 3.62%, Maruti Suzuki down by 1.86%, Adani Ports &Special down by 1.58%, NTPC down by 1.03% and Infosys down by 0.42% were the top losers.

Meanwhile, India has received $4.5 billion foreign direct investment (FDI), recording a whopping 114 percent growth during December 2015 which is more than double against the same period in 2014. During the period, the sectors which attracted FDI include computer software and hardware, trading, services, automobile and telecommunications. India receives maximum FDI from Singapore, Mauritius, the Netherlands and Japan. India had received $2.16 billion in December 2014.

Commerce and Industry Minister Nirmala Sitharaman has said that India is seen as one of the best places to invest, as Foreign investment in India is growing at 38 per cent even as it has witnessed a decline of 16 per cent at the global level.

In order to boost FDI in the country, the government has relaxed FDI norms in as many as 15 sectors, including Defence, single brand retail, construction development, civil aviation and limited liability partnerships (LLPs). India needs around $1 trillion foreign Investments in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth. In 2014-15, foreign fund inflows grew 27 percent to $30.93 billion as against $24.29 billion in 2013-14.

The CNX Nifty traded in a range of 7,503.15 and 7,406.65. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Lupin up by 9.82%, Vedanta up by 9.08%, Axis Bank up by 5.25%, PNB up by 4.95% and Tata Steel up by 4.34%. On the flip side, Bosch down by 5.12%, GAIL India down by 3.66%, Adani Ports &Special down by 1.81%, Maruti Suzuki down by 1.67% and Power Grid down by 1.12% were the top losers.

European markets were trading mostly in green; France’s CAC increased 23.18 points or 0.55% to 4,251.71 and UK’s FTSE 100 was up by 24.29 points or 0.41% to 5,923.05, while Germany’s DAX was down by 23.95 points or 0.25% to 9,369.41.

Asian equity markets closed mostly higher on Friday, taking cues from a positive finish in Wall Street overnight and a rebound in oil prices in Asian deals helped underpin investor sentiment. But, gains were capped across the region ahead of the US monthly jobs report due out later in the day that could provide further insights into the world's largest economy and its rate policy. Employment is expected to increase by about 188,000 jobs in January after jumping by 292,000 jobs in December. The unemployment rate is expected to hold at 5.0 percent. Hong Kong shares rose, aided by overnight gains in US and European markets. But trading was thin, with many already leaving for the Lunar New Year holiday. China stocks ended lower as the market doubts that government moves to raise investment ceilings for overseas investors won't lead to an immediate surge in foreign buying of Chinese equities. Japanese shares fell for a fourth day amid a firmer yen on concerns about slowing US economic growth and growing doubts about the pace of future rate increases at the Federal Reserve.