Post Session: Quick Review

Today’s session turned to be a jubilant one as benchmarks indices closed with gain of around two percent. The benchmark staged a strong comeback on widespread buying by participants tracking a global market and in anticipation of the European Central Bank extending stimulus. Even the withdrawal of incremental Cash Reserve Ratio (CRR) hike by RBI boosted the sentiments further. The market made a gap-up opening in early deals as sentiments got support by strong global cues along with buying in Tata group shares. The rupee gained against the dollar in early trade on sustained selling of the US currency by exporters and banks. The weakness in the dollar against other currencies overseas supported the rupee. This was the third consecutive day of rise for the domestic currency. The mood was upbeat with Finance Minister Arun Jaitley’s statement that demonetisation will boost growth in long run. The Finance Minister said the country will now have a cleaner economy, cleaner ethics and better GDP, he added that the economy, in the long term, is looking for a major change and policy makers now have a vision. Meanwhile, the government has sought the approval of the Lok Sabha for gross additional expenditure of Rs 59,978.29 crore as part of the Second Batch of Supplementary Demands for Grants for the fiscal 2016-17. Interestingly, the supplementary demand document was silent on whether this additional spend would affect the Centre’s fiscal deficit position or not.

Some support also came after Prime Minister Narendra Modi’s statement that demonetisation triggered an unprecedented cash crunch in the country, but defended his decision saying it will lead to long-term gains. Modi added that the government’s measure will bring a degree of inconvenience but this short-term pain will pave way for long-term gains. The decision has several gains for farmers, traders, labourers who are the economic backbone of our nation. Reserve Bank of India’s (RBI) deputy governor enlightened that the banking sector’s health is improving as bad loan accumulation has slowed and provision coverage has improved than in the previous quarters. The formation of incremental NPA (Non Performing Assets) has decelerated, the provision coverage ratio at the system level has slightly improved and compared to the last year, in this half year, the recoveries have been better and write-offs have reduced to some extent.

On the global front, Asian markets ended mostly in green, after Wall Street strode to new records. Hong Kong stocks rose for the third straight session although demand was tempered by weakness in mainland shares after China’s falling foreign exchange reserves deepened capital outflow concerns. Japan’s third-quarter GDP was weaker than thought with a 0.3 percent expansion, revised data showed, as slack corporate spending held back the world’s number three economy. European markets were trading mostly in red with investors looking ahead to the outcome of a European Central Bank (ECB) policy meeting later in the day. ECB President Mario Draghi is set to announce an extension of his quantitative easing (QE) for about six months.

The BSE Sensex ended at 26692.61, up by 455.74 points or 1.74% after trading in a range of 26357.35 and 26733.87. There were 29 stocks advancing while 1 stock remained unchanged on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.56%, while Small cap index was up by 1.25%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.95%, Auto up by 2.72%, IT up by 1.78%, TECK up by 1.63% and FMCG up by 1.60%. (Provisional)
The top gainers on the Sensex were Tata Steel up by 4.85%, Adani Ports & Special Economic Zone up by 3.39%, Tata Motors up by 3.37%, Hero MotoCorp up by 3.03% and Bajaj Auto up by 2.72%. (Provisional)

Meanwhile, the government has sought the Parliament’s approval for gross additional expenditure of Rs 59,978.29 crore, including a net cash outgo of Rs 35,171.92 crore and the rest matched by savings of ministries or by enhanced receipts or recoveries aggregating to Rs 24,805.34 crore, as part of the second batch of supplementary demand for grants for the fiscal 2016-17. Though, the document was silent on whether this additional spend would affect the Centre's fiscal deficit position or not.

As per the demand Rs 3,096.28 crore has been sought for transfer of Krishi Kalyan Cess to Krishi Kalyan Kosh and meeting additional requirement towards general component, special component of Schedule Cast and Tribal Sub-Plan under Pradhan Mantri Fasal Bima Yojna of the Ministry of Agriculture and Farmers Welfare. The Demands for Grants also include Rs 861.65 crore for equity investment in Air India and carrying out accounting adjustments for conversion of loan outstanding against Pawan Hans Helicopters Limited into equity.

The government has sought approval to provide an additional Rs 4,000 crore to the flagship rural jobs scheme under Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA). Further, it include Rs 2,500 crore for Ministry of Drinking Water and Sanitation and Rs 210 crore for implementation of GST and project Saksham. The expenditure also includes clearing pending claims for maintenance of Prime Minister's aircraft (Rs 193 crore), Cyber Security Research and Development Scheme of National Security Council Secretariat (Rs 50 crore) and Grants-in-General to National Authority Chemical Weapons Convention Help Desks (Rs 1.01 crore). As per the document, Rs 550 crore has been sought for meeting expenditure under grants-in- aid towards security related expenditure of Jammu and Kashmir.

Finance Minister Arun Jaitley while presenting the supplementary demand also sought approval of the House for Rs 1,000 crore for meeting additional expenditure of Coast Guard Organisation towards acquisition of ships, aricraft and fleet, and land acquisition. He also sought token provisions for enabling re-appropriation of savings in cases invloving new service or new instrument of service.

The CNX Nifty ended at 8242.95, up by 140.90 points or 1.74% after trading in a range of 8151.75 and 8256.25. There were 47 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 4.89%, Tata Motors - DVR up by 4.41%, Tata Motors up by 3.57%, Adani Ports & Special Economic zone up by 3.46% and Bajaj Auto up by 3.00%. (Provisional)

On the flip side, Bharti Infratel down by 2.35%, Eicher Motors down by 0.40%, Aurobindo Pharma down by 0.21% and NTPC down by 0.09% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 8.5 points or 0.12% to 6,893.73 and France’s CAC decreased 0.89 points or 0.02% to 4,693.83, while Germany’s DAX increased 18.33 points or 0.17% to 11,005.02.

Asian equity markets ended mostly in green on Thursday after the US and European markets closed with large gains overnight on hopes of a state-backed rescue for struggling Italian lenders and amid optimism that fiscal-stimulus measures outlined by President-elect Donald Trump could lift US economic growth. Investors looked ahead to the ECB meeting later in the day. Faced with weak growth and inflation across the 19-country euro zone, the central bank is widely expected to extend its asset purchase program by six months. Japanese shares hit their highest level in more than 11 months after Chinese trade data came in unexpectedly strong. China's exports unexpectedly rose 0.1 percent in the month from a year ago in dollar terms, confounding expectations for a decline of 5 percent. At the same time, imports advanced 6.7 percent in contrast to the expected fall of 1.9 percent. Though, Chinese shares ended lower as trade and forex data painted a mixed picture of the world's second-largest economy.