Markets remain firm; Nifty regains 8050 mark

Indian markets continue to hold their gains in the noon trade with benchmark indices trading higher by over a percent. The good going in the regional markets have equally supported the markets coupled with the report that the rupee recovered from its 39-month closing low by gaining 37 paise to 68.36 in the pre-noon trade on fresh selling of the US currency by banks and exporters. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the government’s demonetisation move is going to have a positive impact on the economy, including GDP. Jaitley said there will be a positive impact because a lot of money that operates in the shadowy economy will now become part of the banking structure and banks will have a lot more money to support the economy. Market participants however maintained their cautious approach over increasing FII outflows. Foreign institutional investors (FIIs) have pulled out over $2 billion in the past fortnight from the cash market.  FIIs stood net sellers in the domestic equity market on Thursday, as they offloaded shares worth Rs 1,095.10 crore. Gross purchases and gross sales of FIIs stood at Rs 4,235.62 crore and Rs 5,330.72 crore, respectively. Meanwhile, stocks suffered their worst setback in 15 months in the November future and option (F&O) series that concluded on Thursday. The Nifty lost 7.5% or 650 points to close at 7,965.60, while the Sensex fell 7.4% or 2,056 points to close at 25,860. The benchmark indices recorded their biggest fall in percentage terms as well as in absolute terms since August 2013, due to heavy overseas investor selling after government’s demonetization move and Donald Trump’s victory in US Presidential Elections.

On the global front, Asian markets were trading mostly higher on Friday, with Japanese market extending its rally after the dollar jumped further against the yen, lifting prospects for better corporate earnings. The US markets remained closed in last session unable to give any cues to other global markets.

Back home, all BSE sectoral indices were trading in the green. Among them, IT index gained the most by 4.55 per cent, followed by TECK 3.74 per cent, Metal 1.70 per cent and Power 1.36 per cent. In scrip specific development, Talwalkars Better Value Fitness surged after the company received its board’s approval for the demerger of Gym business into separate company Talwalkars Lifestyles (TLL). Moreover, SpiceJet gained after the company will launch a daily direct flight on the Hyderabad-Jabalpur-Hyderabad route effective from December 23, 2016.

The market breadth remained optimistic as there were 1710 shares on the gaining side against 487 shares on the losing side, while 148 shares remained unchanged.

The BSE Sensex is currently trading at 26122.38, up by 262.21 points or 1.01% after trading in a range of 25874.45 and 26132.11. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index up by 1.47%.

The top gaining sectoral indices on the BSE were IT up by 4.55%, TECK up by 3.74%, Metal up by 1.70%, Power up by 1.36% and PSU up by 1.05%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Infosys up by 5.09%, TCS up by 4.54%, GAIL India up by 3.71%, Wipro up by 3.28% and Tata Steel up by 2.88%. On the flip side, Bajaj Auto down by 0.81%, ONGC down by 0.79%, ICICI Bank down by 0.65%, Larsen & Toubro down by 0.39% and Bharti Airtel down by 0.36% were the top losers.

Meanwhile, in order to boost the country's outbound shipments and make it competitive, finance and railways ministries are working on the issue relating to reducing export logistics costs. Commerce and Industry Minister Nirmala Sitharaman has raised her concern over slow growth in exports and said 'I have very clearly stated that logistics costs are increasing and therefore, we are becoming less competitive. We have definitely asked different authorities at different levels. We have asked the Railways and the Finance Ministers to look into this. They are working on it,'

The minister further stated that that they don’t want this kind of a cost which is not due to the inefficiency of the manufacture. Therefore, they have discussed the issue relating to the increasing logistics costs with the Finance Minister.

She said that logistics is one of the 'biggest issues' and it makes the cost competitiveness produced by an efficient exporter unviable. The department of commerce has suggested to the Railways Ministry that it needs to clearly distinguish between consignments for exports, imports and general, in terms of freight rates. It was also suggested to the railways to work on ways to reduce the delivery time of consignments providing traders more predictability and reliability.

A Commerce Ministry strategy paper released in 2010 had emphasized the need to invest billions in improving infrastructure to boost exports. It had asked the government to invest in modernizing roads, ports, railways, airports, power and customs stations. Indian exporters have time and again demanded drastic cuts in freight rates to enhance price competitiveness in the global markets as costs of exports is currently very high in India. Due to weak global demand and slide in oil prices, country’s exports fell for 18 straight months in between December 2014 and May 2016.

The CNX Nifty is currently trading at 8058.05, up by 92.55 points or 1.16% after trading in a range of 7976.75 and 8063.60. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Infosys up by 5.26%, HCL Tech up by 4.90%, Tech Mahindra up by 4.46%, TCS up by 4.36% and GAIL India up by 3.86%. On the flip side, ACC down by 1.35%, Bharti Airtel down by 0.78%, Bharti Infratel down by 0.76%, Bajaj Auto down by 0.64% and Dr. Reddys Lab down by 0.59% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.02%, KOSPI Index gained 0.16%, Jakarta Composite increased 0.1%, Taiwan Weighted advanced 0.08%, Nikkei 225 added 0.09% and Hang Seng was up by 0.42%. On the flip side, Shanghai Composite was down by 0.19%.