Benchmarks snap seven day losing streak; eke out slender gains

Snapping seven days losing streak, Indian equity benchmarks ended the session slightly in green on Friday as traders opted to buy beaten down but fundamentally strong stocks after seven days of continues drubbing. Markets made weak start and traded subdued in early deals, tracking sluggish global cues. Sentiments also remained dampened on report that the share of foreign portfolio investments (FPI) through participatory notes (P-notes) slipped to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November. P-Notes investments have fallen to a 33-months low, the total value of P-Notes investment in Indian markets equity, debt and derivatives has plunged to Rs 1,79,648 crore in November-end, from Rs 1,99,987 crore at the end of October.

Though, domestic gauges pared all of their initial losses and entered into green terrain, as traders took some encouragement with some signs of thaw appearing on the GST issue, and the prospects of early roll out of goods and services tax (GST) brightening with the states and the Centre making progress on a crucial legislation, amid indications that the states may get concessions to tide over possible demonetisation-related revenue loss. Some support also came after NITI Aayog vice-chairman Aravind Panagariya has termed Prime Minister Narendra Modi's demonetisation scheme as a “frontal attack” on black money and said that more such actions are in store to curb corruption. Traders also got some sense of relief with Union Minister for Statistics and Programme Implementation D. V. Sadananda Gowda’s statement that demonetisation could bring down the growth rate by just 0.2 percent and not more than that. He added that India’s GDP stood at 7.6 percent and it may go down to 7.4 percent.

On the global front, European markets were trading mostly in green, buoyed by the banking sector after Credit Suisse and Deutsche Bank settled mortgage securities fraud suits with the United States, and as Italy's Monte dei Paschi agreed to a bailout. Asian markets ended mostly in red, with investors looking to US economic data scheduled later in the day for potential catalysts.

Back home, on the sectoral front, auto stocks remained under pressure on reports that the Centre is looking at introducing a law where one may not be allowed to register new car or any other vehicle unless he produce proof that he has adequate parking space for it. Shares of non-banking finance companies (NBFCs) plummeted further on report that the Maharashtra government will form a special investigation team (SIT) to investigate violations of norms by microfinance companies.

The NSE’s 50-share broadly followed index Nifty gained marginally to end near its psychological 8,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose over sixty points to finish above its psychological 26,000 mark. However, broader markets ended marginally in red.

Finally, the BSE Sensex gained 61.10 points or 0.24% to 26040.70, while the CNX Nifty was up by 6.65 points or 0.08% to 7985.75.

The BSE Sensex touched a high and a low of 26143.19 and 25872.38, respectively and there were 16 stocks on gainers side against 14 stocks on the losers side on the index. 

The broader indices ended in red; the BSE Mid cap index declined 0.40%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.87%, Consumer Durables up by 0.78%, Auto up by 0.28%, Oil & Gas up by 0.26% and Finance was up by 0.16%, while Realty down by 1.06%, FMCG down by 0.51%, IT down by 0.46%, TECK down by 0.34%, Metal was down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 4.03%, Sun Pharma up by 2.40%, Bajaj Auto up by 2.39%, Maruti Suzuki up by 2.14% and GAIL India up by 1.58%. On the flip side, Axis Bank down by 2.23%, ONGC down by 1.20%, ITC down by 1.08%, Mahindra & Mahindra down by 0.96% and TCS down by 0.85% were the top losers.

Meanwhile, the government of India is formulating a National Policy for Advanced Manufacturing with an objective of enhancing the share of manufacturing in GDP to 25 percent by 2025 from 16 percent at present. The policy will be designed in a way that India’s position as global competitor in terms of manufacturing can be advanced and also to evaluate the threat that ‘smart manufacturing’ could pose through loss of jobs.

Emphasizing the purpose of the new policy, Department of Industrial Policy and Promotion Secretary Ramesh Abhishek said that there are a lot of concerns, lot of opportunities, there are also threats particularly on jobs so how to make our policies, how to tailor our industry, how to get ready for this in a manner that the transition is seamless and our people are skilled enough, may be to relocate to other areas. Girish Shankar Secretary, Department of Heavy Industry said that the National Policy for Advanced Manufacturing which essentially is how to increase technological depth so that we become globally competitive and are not left behind. However, he pointed out that framing of the policy may take some more time because it needs a lot of consultation, and invited comments from the public.

The capital goods policy envisages invention of a national policy for advanced manufacturing and this would include advanced materials, modern manufacturing like advanced robotics and 3D printing, among others. The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.

The CNX Nifty traded in a range of 8022.60 and 7942.05. There were 24 stocks in green against 26 stocks in red on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Cipla up by 3.72%, Bosch up by 2.50%, Sun Pharma up by 2.36%, Maruti Suzuki up by 2.22% and Bajaj Auto up by 2.13%. On the flip side, HCL Tech down by 2.86%, Axis Bank down by 2.11%, Eicher Motors down by 1.80%, Aurobindo Pharma down by 1.74% and Tech Mahindra down by 1.45% were the top losers.

European markets were trading mixed; France’s CAC gained 4.66 points or 0.1% to 4,839.29 and Germany’s DAX was up by 12.28 points or 0.11% to 11,468.38, while UK’s FTSE 100 was down by 1.82 points or 0.03% to 7,061.86.

Asian equity markets ended mostly in red in thin trading on Friday, the last trading day before Christmas, after Wall Street stocks fell for a second straight session overnight. Hong Kong stocks ended lower as rosier US growth data deepened fears of money flowing out of emerging markets. The Commerce Department reported that the US economy grew 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and improving from growth of 1.4% in the second quarter. The personal consumption rose 3.0% in the third quarter, up from an initial estimate of 2.7%. Consumer spending typically accounts for nearly 70% of US economic growth. Further, Chinese shares ended lower, dragged down by financials, after two major Chinese cities tightened housing purchase restrictions and reports emerged that regulators would tighten supervision over online insurance products. The Japanese market was closed for the Emperor's birthday.