Post Session: Quick Review

Firm trade prevailed throughout the session and Indian equity benchmarks closed with gain of around one and half percent. The value-based buying at some blue-chip counters, which were heavily over-sold and covering-up of pending short positions by speculators ahead of the December futures and options expiry on Thursday, supported the recovery. The broad based buying across the sector marked key benchmarks Nifty surpassing 8000 mark and Sensex surpassing 26,100 mark. The markets traded in fine fettle in early deals as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. The sentiments got support with FM Arun Jaitley’s hint of a lower tax regime; he said that India now needs to move to a lower level of taxation to provide services more competitive in nature, as competition is not domestic, it is global. Jaitley highlighted that the authorities need to be fair in interpreting the tax laws as the country needs to move to a tax-friendly environment. Some support also came after Minister for Road Transport and Highways Nitin Gadkari said that demonetisation will help to increase government revenue and enable it to allocate more funds to welfare scheme for the people. He further said that India is moving towards a less cash economy like many other countries of the world. Therefore, if something big has to be achieved, then one has to face some difficulties in the beginning.

Traders paid no heed towards the report that the yearly State Bank of India (SBI) Composite Index, an indicator for tracking India’s manufacturing activity, has crashed to an all-time low in December 2016 of 45.5 (moderate decline), compared to last month’s revised index of 50 (low growth). The report said factory output, measured by the index of industrial production, may continue to remain in negative territory in December 2016. The market-men were eyeing the meeting of Prime Minister Narendra Modi with economists and senior government officials at NITI Aayog. The theme of the meeting is ‘Economic Policy Reform, Road Ahead’ and it will be the first such meeting after the central government’s announcement of demonetization on November 8. There is an imminent fear in the market on the back of a slowdown in corporate earnings and economic growth on account of demonetization. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. December 2016 series to next month i.e. January 2017 series. The near month December 2016 derivatives contracts will expire on Thursday i.e. December 29, 2016.

On the global front, Asian markets ended mostly in green, in the absence of fresh cues. Japan’s Nikkei share average edged higher in thin trade, while China’s stock market closed lower despite encouraging economic data. China’s industrial sector showed the strongest profit growth in three months in November, suggesting the world’s second-largest economy was improving, though policymakers noted gains were too dependent on rebounding prices for oil products, iron and steel. European shares were trading in green amid thin volumes during the holiday period in the region. London’s FTSE 100 is closed for a public holiday. In a muted session, those traders on the floor kept an eye on Italian banks after the European Central Bank (ECB) told Banca Monte dei Paschi that it would need to plug an 8.8 billion euro ($9.2 billion) capital shortfall.

The BSE Sensex ended at 26197.73, up by 390.63 points or 1.51% after trading in a range of 25803.19 and 26249.03. There were 29 stocks advancing against 1 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.76%, while Small cap index was up by 1.52%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 2.55%, Metal up by 2.55%, Consumer Durables up by 2.13%, Oil & Gas up by 1.67% and Auto up by 1.52%, while there were no losers. (Provisional)

The top gainers on the Sensex were ITC up by 4.13%, Adani Ports & Special Economic Zone up by 3.01%, Tata Steel up by 2.94%, Lupin up by 2.51% and ICICI Bank up by 2.25%. On the flip side, GAIL India down by 1.48% was the sole loser. (Provisional)

Meanwhile, in order to boost cashless transactions in the country, all chief ministers of the country, including Tripura Chief Minister Manik Sarkar, have agreed on transferring government benefits to people's bank accounts directly from 2017. G S Sekhawat, Director of Direct Benefit Transfer (DBT) has conducted a workshop on DBT with government officials and according to him they have agreed to adopt digital mode of transactions. He said that DBT would check corruption and increase transparency and accountability and that it would also save money in the state exchequers.

Sekhawat said that as per the plan, transactions in all departments under the state government will be made regularly in digital mode from January 1, 2017. He added that over Rs 36,000 crore of the government exchequer were saved in last two years for providing various payments and wages straightway to the beneficiaries under the DBT scheme. He also said that as many as 84 schemes, including Pradhan Mantri Jan Dhan Yojana and Mahatma Gandhi National Rural Employment Guarantee Act being implemented by a host of central ministries and departments across the country, have been included in the DBT scheme.

The workshop was organised for all government departmental heads, drawing and disbursement officers and accounts officials to implement the online government payment. The workshop was attended by the principal secretary, finance and rural development of the state government, G S G Ayenger, and other top officials of the finance and other departments. The DBT scheme was launched in January 2013 in 43 districts in 16 states and all Union Territories. In the second phase it was extended to 78 more districts in July 2013. Currently, all districts of the countryare covered under this scheme.

The CNX Nifty ended at 8030.90, up by 122.65 points or 1.55% after trading in a range of 7903.70 and 8044.65. There were 47 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 4.41%, ITC up by 4.31%, Tata Steel up by 3.31%, Aurobindo Pharma up by 3.18% and Hindalco up by 2.97%. (Provisional)

On the flip side, GAIL India down by 0.96%, Grasim Industries down by 0.56%, IndusInd Bank down by 0.08% and Kotak Mahindra Bank down by 0.08% were the top losers. (Provisional)

The European markets were trading in green; Germany’s DAX increased 17.25 points or 0.15% to 11,467.18 and France’s CAC increased 6.94 points or 0.14% to 4,846.62. London Stock Exchange was closed on account of Christmas holiday.

Asian equity markets ended mostly in green on Tuesday. Japanese shares were modestly higher, buoyed by a weaker yen, even after the release of sluggish economic reports. Japan's core consumer prices marked the ninth straight month of annual declines in November and household spending fell an annual 1.5 percent in the month while the jobless rate climbed to 3.1 percent from 3.0 percent in the previous month. Meanwhile, Chinese shares ended lower in light trading, despite official data showing that China's industrial profits grew at a faster pace in November from a year ago. Industrial profits surged 14.5 percent year-over-year to CNY 774.6 billion, well above the 9.8 percent climb in October. During the January to November period, total industrial profits rose 9.4 percent compared with the same period last year. Markets in Hong Kong remained closed for public holidays.