Indian benchmarks exhibit boisterous performance; Sensex rallies over 250 pts

Indian benchmark indices staged an astonishing performance on the last day of the month by vehemently rallying close to a percentage points in the session and re-conquering their psychological levels. While hopes of strong GDP for September quarter helped investors’ sentiment, the side-effects of demonetisation continued to have a bearing on the market. The general expectation is that economic growth accelerated to 7.5% in the September quarter from 7.1% in the June quarter but lower than 7.9% growth posted for the March quarter. Sentiments were buoyant in the second half of trade after OPEC ministers gathering in Vienna expressed renewed optimism about salvaging a deal to cut oil production and prop up global prices. The group needs to resolve differences between its three biggest producers -- Saudi Arabia, Iran and Iraq -- at loggerheads over how to share the burden of a plan to reduce supply for the first time since 2008. Under an Algerian proposal put forward on Tuesday, the 14 members of OPEC would cut production to 32.5 million barrels per day from their October level of 33.6 million. Saudi Energy Minister Khalid al-Falih said on Wednesday that OPEC was close to clinching a deal to limit oil output, adding Riyadh would agree to Iran freezing production at pre-sanctions levels. The comments could be seen as a compromise by Riyadh, which in recent weeks insisted that Iran fully participate in any cut. On the domestic front, Investors’ confidence also remained upbeat with a private report indicating that government is expected to meet its fiscal deficit target of 3 per cent for the next financial year on account of additional revenue from penalty on black money and deposits under the income disclosure.

Strong US growth data lifted stock across markets in overnight trade, but that may not be good news for emerging markets like India, as Fed is expected to make a rate hike at the Fed policy review on December 13-14, 2016. US consumer confidence index surged to 107.1 in October from an upwardly revised 100.8 in October. Oil bounced as investors looked ahead to developments at the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna later in the day. However, Italy's constitutional referendum cast a pall on the markets. Italians vote on constitutional changes on December 4 that would limit the power of the upper house and make it easier for governments to pass legislation. Apart from political instability, a negative referendum outcome could hurt Italian banks and renew financial stress in the European Union.

Back home, the local benchmark got off to a positive start in the morning trade as market participants were largely influenced by the supportive leads from Asian markets following strong overnight gains in US markets. The frontline indices slowly but steadily started gathering steam and surged by around half a percent by late morning trades. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. Finally the NSE’s 50-share broadly followed index Nifty, convalesced by over a percentage point to settle above the crucial 8,200 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex accumulated over two hundred and fifty points and closed above the psychological 26,650 mark. Moreover, the broader markets too participated in the rally and closed with gains of over a percent. On the BSE sectoral space, hefty buying was evident across the board as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in Consumer Durables counter which rocketed by around two and half percent while the badly butchered Banking index too jumped by over two percent. 

The market breadth remained optimistic as there were 1766 shares on the gaining side against 827 shares on the losing side while 201 shares remained unchanged.

Finally, the BSE Sensex rallied 258.80 points or 0.98% to 26652.81, while the CNX Nifty rose 82.35 points or 1.01% to 8,224.50.

The BSE Sensex touched a high and a low of 26680.55 and 26395.50, respectively and there were 23 stocks on gainers side against 7 stocks on the losers side on the index. The broader indices made a positive closing; the BSE Mid cap index ended higher 1.07%, while Small cap index was up by 1.28%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.46%, Bankex up by 2.20%, Capital Goods up by 1.57%, PSU up by 1.06% and Power up by 1.02%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 3.62%, Maruti Suzuki up by 3.39%, SBI up by 2.15%, Larsen & Toubro up by 2.07% and HDFC Bank up by 1.74%. On the flip side, Lupin down by 0.91%, GAIL India down by 0.74%, Cipla down by 0.45%, Reliance Industries down by 0.31% and Tata Motors down by 0.10% were the top losers.

Meanwhile, the government has ordered LPG producers to supply all the cooking gas (LPG) they produce locally to state-owned oil companies only, and has asked the private retailers to source their requirements through imports. The Ministry of Petroleum and Natural Gas, in an order said that sale of indigenously produced LPG is not permitted to the entities other than government oil companies and all domestically produced liquefied petroleum gas should necessarily be sold to PSUs for subsidised sale to consumers.

The ministry further stated that instances have been noticed of all locally produced LPG not being sold to oil marketing companies - IOC, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) and some domestic LPG is also being sold to parallel marketeers in violation of Ministry’s order and held that sale of LPG by domestic producers to anyone other than state-owned oil marketing companies (OMCs) is not permissible under LPG control order. The ministry has asked all LPG producers including Oil and Natural Gas Corp (ONGC), GAIL India and RIL as well as parallel marketeers to comply with the order.

As per the control order non-state LPG sellers or parallel marketeer cannot source the fuel from domestic refiners. They have to import LPG if they intend to sell the cooking fuel in domestic market. The LPG control order of 2000 defines parallel marketeer as someone who is carrying on business of importing, storing, transporting, marketing and distributing of LPG. It does not prohibit the parallel marketeer from producing LPG but it cannot sell such production directly to consumers.

The CNX Nifty traded in a range of 8,234.25 and 8,139.25. There were 36 stocks in green against 15 stocks in red on the index.

The top gainers on Nifty were ICICI Bank up by 3.78%, Maruti Suzuki up by 3.48%, Ambuja Cement up by 2.90%, Yes Bank up by 2.84% and UltraTech Cement up by 2.51%. On the flip side, Idea Cellular down by 2.71%, Lupin down by 1.30%, GAIL India down by 0.99%, ZEEL down by 0.96% and Reliance Industries down by 0.96% were the top losers.

European markets were trading in green; France’s CAC gained 25.25 points or 0.55% to 4,576.71, UK’s FTSE 100 increased 38.52 points or 0.57% to 6,810.52 and Germany’s DAX was up by 43.03 points or 0.41% to 10,663.52.

Most of the Asian markets made a positive closing on Wednesday as upbeat US data and a weak yen boosted investor sentiment. US data showed stronger-than-expected third quarter growth, higher housing prices in September and a sharp rebound in consumer confidence in November. Japanese shares ended on a flat note as investors digested a slew of data and waited for cues from the OPEC meeting and the weekend's Italian constitutional referendum. Investors are awaiting news later Wednesday on the prospect of a production cut by the Organization of the Petroleum Exporting Countries. Iran’s oil minister said that he believed the cartel would reach a production deal, but that an immediate freeze of his country’s output wasn’t on the agenda. Japan's industrial output grew for a third consecutive month in October, preliminary data showed today but the government left its basic assessment intact, saying production is increasing at a moderate pace. Other reports on automobile production, housing starts and small business confidence painted a mixed picture of the economy. Meanwhile, Chinese shares ended lower on worries about liquidity and increased regulation as Beijing steps up efforts to support a sliding Yuan.