Benchmarks extend winning streak for second straight session

Indian benchmark indices carried forward their northbound journey for yet another session on Tuesday, as optimistic cues from across the globe helped the indices to close around crucial support levels of 8,550 and 27,600. It turned out to be a rather volatile day of trade as the indices rebounded after drifting to lower levels in the noon session, though sustained position build up was witnessed on hopes Hillary Clinton will beat Donald Trump in Tuesday's (November 8) presidential election but traders are cautious, with many opinion polls saying the race is too close to call. Global equities and risk assets surged on Monday after the FBI said it would not pursue criminal charges against Clinton over her use of a private email server while secretary of state. Clinton is considered by many investors to be a safer bet than Trump, who is seen as a loose cannon with policies many fear could wreck the world's top economy. On the domestic front, sentiments remained optimistic on the report that Retail inflation is expected to soften to 4.1 per cent in October and ease further to sub-4 per cent level by November-December, largely helped by favourable base effect. The report noted that the sequential increase in food index in October was largely led by higher prices of gram pulse, sugar and cooking oil, which were possibly due to increased festival demand for these key ingredients. Adding optimism among investors, Finance Minister Arun Jaitley said that the Centre will step up on reforms to attract more investment and fill up infrastructure deficit. He also said that after seven decades of independence, India’s voice is increasingly getting noticed in the world, therefore to reform more, to open more, to attract more investment, to expand more in manufacturing, they need to fill up the infrastructure deficit faster than what they have been doing. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 311 crore on November 07, 2016. Meanwhile, a report has stated that GST benefits are likely to accrue over time rather than immediately, though in the long run the indirect tax regime will boost growth, lower costs and strengthen tax revenues. It added that it expects over time, as the GST council widens the tax net, minimises the tax slabs and lower the standard tax rates, the benefits will be substantial.

On the global front, Asian markets ended mostly higher on Tuesday on reports that Democratic presidential candidate Hillary Clinton is most likely to win the US election boosted investors sentiments. Clinton is seen by investors as offering greater certainty and stability. Chinese shares edged higher as investors shrugged off weak trade data, which showed the country's exports fell for a seventh consecutive month in October. Chinese exports fell an annual 7.3 percent year-over-year on dollar terms, exceeding expectations for a decrease of 6.0 percent. However, Japanese shares ended a choppy session flat as cautious investors opting to stay on the sidelines before the US election. Meanwhile, European counterparts too are trading in the positive territory though with marginal gains with UK’s FTSE 100 being the top gainer in the space.

Back home, the local benchmark got off to a positive opening, in tandem with the cautiously optimistic sentiments prevailing in Asian markets. However, the indices failed to capitalize on the initial momentum and continued to see-saw around the neutral line for most part of the morning trade and drifted deeper into the red terrain in noon session. 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. Eventually the NSE’s 50-share broadly followed index Nifty, got buttressed by over half a percent to settle above the crucial 8,550 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over a hundred points and closed just below the psychological 27,600 mark. Moreover, the broader markets too showed a recovery after the bulls powered up in afternoon trades on the back of a firm trade in global sentiments. On the BSE sectoral space, Auto counter remained the top gainer in the space with around one and half a percent gains followed by the high beta- Oil & Gas and Banking indices which ended with gains of around a percent. On the other hand, the FMCG index slipped by around quarter a percent followed by Realty counter which settled with diminutive losses.

The market breadth remained pessimistic as there were 1354 shares on the gaining side against 1528 shares on the losing side, while 128 shares remained unchanged. Finally, the BSE Sensex gained 132.15 points or 0.48% to 27591.14, while the CNX Nifty rose 46.50 points or 0.55% to 8,543.55.

The BSE Sensex touched a high and a low of 27646.84 and 27406.76, respectively and there were 18 stocks on gainers side against 12 stocks on the losers side on the index. The broader indices made a positive closing; the BSE Mid cap index ended higher 0.36%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Auto up by 1.67%, Oil & Gas up by 1.00%, Bankex up by 0.83%, PSU up by 0.45% and Metal up by 0.37%, while FMCG down by 0.18% and Realty down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 6.49%, GAIL India up by 2.94%, Asian Paints up by 1.82%, Power Grid up by 1.67% and ICICI Bank up by 1.60%. On the flip side, Sun Pharma down by 3.35%, Cipla down by 1.74%, Maruti Suzuki down by 1.03%, Adani Ports &Special down by 0.94% and NTPC down by 0.71% were the top losers.

Meanwhile, Finance Minister (FM) Arun Jaitley has said that the Centre will push up reforms to attract more investment and fill up infrastructure deficit faster than now, though he emphasized that there is a lot of anxiety on the growth front. He said that unlike developing economies, voices seeking protectionism are almost absent as the economy expands.

According to Jaitley, one of the great strengths of the Indian economy is that even though India is growing at the fastest rate than any major economy, but by the their own standard they are still not satisfied. There is a great amount of impatience in India and a far greater amount of realization that they can grow even faster. He added that after seven decades of independence, India’s voice is increasingly getting noticed in the world, therefore to reform more, to open more, to attract more investment, to expand more in manufacturing, they need to fill up the infrastructure deficit faster than what they have been doing.

Further, he said that manufacturing sector have growth potential. The share of manufacturing has to increase to 25 per cent from 15 per cent level and this recognized that it creating far more jobs and expanding far better. He also said that there is a huge potential to grow in the eastern India and rural areas have a deficit and offer a tremendous potential to invest. He added that after deciding to quit the European Union, Britain is looking outside Europe and sees countries like India as one of its great future partners in trade and business.

The CNX Nifty traded in a range of 8,559.40 and 8,480.10. There were 32 stocks in green against 19 stocks in red on the index.

The top gainers on Nifty were Tata Motors up by 6.35%, Tata Motors - DVR up by 5.84%, GAIL India up by 2.87%, BHEL up by 2.62% and Tech Mahindra up by 1.94%. On the flip side, Sun Pharma down by 3.34%, Cipla down by 1.89%, Aurobindo Pharma down by 1.86%, Tata Power down by 1.19% and HCL Tech down by 1.19% were the top losers.

European markets were trading mostly in green; France’s CAC increased 5.87 points or 0.13% to 4,467.08 and UK’s FTSE 100 was up by 9.26 points or 0.14% to 6,816.16, while Germany’s DAX was down by 3.86 points or 0.04% to 10,453.09.

Asian equity markets ended mostly in green on Tuesday, as Americans prepared to vote in their presidential election with opinion polls showing Hillary Clinton ahead of Donald Trump. Chinese shares ended higher as investors shrugged off weak trade data, which showed the country's exports fell for a seventh consecutive month in October. Chinese exports fell an annual 7.3 percent year-over-year on dollar terms, exceeding expectations for a decrease of 6.0 percent. Imports dropped 1.4 percent in the month from a year ago, just above the 1.0 percent fall expected. Meanwhile, Japanese shares ended a choppy session flat as cautious investors opting to stay on the sidelines before the US presidential election.