Indian benchmarks stage a remarkable rally; Nifty ends above 8500 level

A session after displaying a distressing performance, Indian equity indices have managed to pull through a dazzling performance by vivaciously rallying around percentage points on Thursday, thanks to the hefty short covering in the beaten down Metal, Banking and Realty counters. The relentless across the board value picking ensured that the frontline indices settle over the psychological 8,500 and 27,500 levels amid the tentative recovery in risk appetite globally. Marketmen across Europe and Asia brushed aside the shock of the Trump victory in the US election. Trump pledged in his speech Wednesday to unify a deeply divided nation, helping to calm jitters in global financial markets. Investors had worried because his campaign promises carried few policy details, making him an unknown quantity compared with his rival, Hillary Clinton, seen as a safe choice. On the domestic front, sentiments remained up-beat with Union Finance Minister Arun Jaitley’s statement that tax collections will go up considerably in the medium-to-long term as more people will come under the tax net due to the demonetisation of Rs 500 and Rs 1,000 currency notes. According to him, the step by the government to crack down on black money, terror financing and corruption not merely nudges the economy towards a cashless society but is a significant push in that direction. The move will establish credibility of the Indian economy in the world and will also expand the country’s GDP. Some support also came with report that the Centre’s net tax kitty rose up to Rs 8.51 lakh crore between April and October 2016. Net direct tax collections jumped up 10.66% to Rs 3.77 lakh crore in October, while direct tax mop-up was more robust and increased 26.7% to Rs 4.85 lakh crore.

On the global front, Asian markets ended higher on Thursday, with markets in Japan seeing biggest gains in nine months in a turnaround just as dramatic as the previous day's plunge, as markets reassessed the economic implications of Republican Donald Trump's shock US presidential election victory. The yen tumbled against the dollar, helping investors shrug off Japan’s sluggish core machinery orders data. The rebound in Asia markets took its lead from Wall Street, where stocks initially wavered before advancing the rest of the day. Major U.S. benchmarks all finished more than 1 percent higher, with the Dow Jones industrial average near a record high close. Traders also shrugged off earlier worries over Trump’s tough rhetoric on China, with the Shanghai Composite Index ending up 1.37%, and Hong Kong’s Hang Seng Index closed up 1.89%. Meanwhile, European counterparts too appear to be in a sanguine mood as they trade in the positive zone with over half a percent gains.

Back home, the local benchmark got off to a rollicking start as the indices rebounded after the recent sell-offs following the strong overnight bounce back on Wall Street on speculation that Donald Trump will pursue business-friendly policies. The key indices capitalized on the momentum and touched intraday highs in noon session but the indices failed to hold onto the highs and started showing signs of easing in late hours of trade and profit booking in few sectors weighed down the local bourses by the end of session. Eventually the NSE’s 50-share broadly followed index Nifty, climbed by over a percent and settled above the crucial 8,500 support level, while Bombay Stock Exchange’s Sensitive Index Sensex amassed two hundred and sixty five points and closed above the psychological 27,500 mark. Moreover, the broader markets too participated in the rally and closed with gains of over one and half percent. On the BSE sectoral space, the Metal index soared by over six percent being the top gainer after Donald Trump in his victory speech said that he would embark on a project to rebuild infrastructure in the US, followed by the rate sensitive PSU and banking counters too gained good traction and went home with over three and half a percent gains. Banking shares gained traction as the government’s latest move to curb Rs 500 and Rs 1,000 currency notes augurs well for long-term prospects for the banking industry as they could enjoy higher deposit (savings) balances and transaction volumes, lower cash handling costs and greater acceptance of digital channels.

The market breadth remained optimistic as there were 2029 shares on the gaining side against 721 shares on the losing side, while 132 shares remained unchanged. Finally, the BSE Sensex gained 265.15 points or 0.97% to 27517.68, while the CNX Nifty rose 93.75 points or 1.11% to 8,525.75.

The BSE Sensex touched a high and a low of 27743.46 and 27457.05, 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 1.65%, while Small cap index was up by 1.75%.

The top gaining sectoral indices on the BSE were Metal up by 6.04%, PSU up by 4.13%, Bankex up by 3.63%, Power up by 2.69% and Realty up by 1.99%, while IT down by 0.72%, Auto down by 0.71%, Consumer Durables down by 0.07% and TECK down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 9.27%, SBI up by 8.41%, Cipla up by 6.85%, Coal India up by 4.91% and Power Grid up by 4.38%. On the flip side, Asian Paints down by 3.50%, Hero MotoCorp down by 2.82%, Lupin down by 2.34%, HDFC down by 2.28% and Infosys down by 1.80% were the top losers.

Meanwhile, in order to transform India's port sector, Union Minister of Shipping, Road Transport and Highways Nitin Gadkari  has said that the government will use IT-based technology for the ongoing projects operation worth Rs 1 lakh crore  to increase efficiency, speed and delivery in the sector. He called upon port authorities to catch up with new trends in port strategies around the world.

Gadkari pointed out that efforts by the government have resulted in improved efficiency of ports over the last two years and that performance of government ports were better as compared to those of private sector this year. He also highlighted that Ministry has taken various steps to improve the efficiency of ports such as old rules have been cleared out, port mechanisation and modernisation is being done on war footing and projects for improving connectivity of ports are being implemented in right earnest. He further stressed upon the importance of e-governance for ensuring good governance.

The Minister has released the report titled - ‘Next Generation Port Infrastructure - Technology Transformation for Integrated Port Operations’. The report has included recommendations of a task force constituted by the Ministry to prepare a robust Information Technology (IT) transformation document for them, clearly defining a long-term strategic roadmap and implementation plans. The main focus of the IT task force has been to provide a structure for developing and implementing Intelligent Transportation System (ITS) technologies in India. The report also noted that there are many developed countries in today's world whose applications of ITS technologies for solving transportation problems have reached a fairly advanced level. Therefore, Gadkari is hopeful that the recommendations of the task force will pave the way for modernizing port systems for better efficiency, speed and delivery. 

The CNX Nifty traded in a range of 8,598.45 and 8,510.70. There were 34 stocks in green against 17 stocks in red on the index.

The top gainers on Nifty were Tata Steel up by 9.40%, Bank of Baroda up by 9.26%, Hindalco up by 8.64%, SBI up by 8.21% and Cipla up by 7.89%. On the flip side, Asian Paints down by 3.87%, Hero MotoCorp down by 3.03%, HDFC down by 2.46%, Bosch down by 2.30% and Bajaj-Auto down by 2.26% were the top losers.

European markets were trading in green; France’s CAC increased 43.95 points or 0.97% to 4,587.43, UK’s FTSE 100 gained 44.57 points or 0.64% to 6,956.41 and Germany’s DAX was up by 83.5 points or 0.78% to 10,729.51.

Asian equity markets ended in green on Thursday, with markets in Japan seeing biggest gains in nine months in a turnaround just as dramatic as the previous day's plunge, as markets reassessed the economic implications of Republican Donald Trump's shock US presidential election victory. The yen tumbled against the dollar, helping investors shrug off sluggish core machinery orders data. Core machinery orders fell 3.3 percent in September from the previous month, official data showed, signaling a fragile capital expenditure in the economy. The news overnight that Donald Trump doesn’t want to force Federal Reserve chair Janet Yellen to resign has also cheered the markets. Yellen’s first term expires in 2018, but there has been speculation that she might feel pressure to step down, given the attacks from Trump during the campaign.