Indian indices edge higher on F&O expiry day; Nifty ends above 8100 mark

The last day of December series futures and options contract expiry turned out to be a good session for the Indian equity indices as they managed to settle with gains of over half a percent. Sentiments got some support with the report that the Reserve Bank of India (RBI) further extended the grace period for banks, non-banking finance companies and microfinance companies to classify bad loans by 30 days in the case of agriculture and term loans of up to Rs 1 crore.  Short-covering on the back of F&O expiry and the appreciation in Indian rupee value against the dollar added to the optimistic sentiments. The rupee appreciated by 16 paise to 68.09 against the US dollar at the time of equity markets closing at the Interbank Foreign Exchange. Investors got some comfort with minister of State for Finance Arjun Ram Meghwal saying that once the entire process of cash ban is completed, consumption and investments will pick-up rapidly. According to him, the move will increase the tax base and improve gross domestic product (GDP) by 2 percent. However, worries about capital outflows from emerging markets to the United States have hit sentiment since November. Foreign investors offloaded net $100.58 million of shares on December 27, having sold $975.80 million worth of local shares this month.

On the global front, Asian equity markets ended mixed on Thursday, as investors turned cautious after Wall Street suffered a mild setback after weeks of gains. Sentiments took a hit after contracts to buy previously-owned US homes fell in November to their lowest level in nearly a year, a sign that rising interest rates could be weighing on the housing market. Also adding to the pessimism is the light global trading ahead of the New Year's holidays, keeping many players wary of taking action. Japanese market edged lower as the yen climbed against the dollar, while Chinese shares ended almost flat, with optimism spurred by fading liquidity stress but investors kept wary by the prospect of regulatory measures to curb aggressive investment in stocks by insurers. Meanwhile, European shares opened slightly lower with all sectors in negative territory in early deals as banking shares and miners fell.

Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, tracking subdued trend in other regional markets. Thereafter, the key indices traded in tight range for most part of the session due to lack of encouraging leads. However, during the last hour of trade benchmark indices moved higher as traders rushed to rollover their December series contracts. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by over half a percent to settle above the crucial 8,100 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over one hundred and fifty points and closed just below the psychological 16,600 mark. Moreover, the broader markets too participated in the rally and closed with gains of over a percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the high beta Consumer Durables counter which rocketed by over one and half percent, while the Oil & Gas, Metal and Auto pockets too gained strength and climbed by over a percent each. However, only Capital Goods index closed on a flat note with a negative bias.

The market breadth remained optimistic as there were 1683 shares on the gaining side against 901 shares on the losing side, while 163 shares remained unchanged.

Finally, the BSE Sensex gained 155.47 points or 0.59% to 26366.15, while the CNX Nifty rose 68.75 points or 0.86% to 8,103.60. 

The BSE Sensex touched a high and a low of 26429.63 and 26166.67, respectively and there were 22 stocks on gainers side against 8 stocks on the losers side on the index.

The broader indices made a positive closing; the BSE Mid cap index ended higher 1.19%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.67%, Oil & Gas up by 1.56%, Metal up by 1.44%, Auto up by 1.34% and Realty up by 1.14%, while Capital Goods down by 0.09% was the sole losing index on BSE.

The top gainers on the Sensex were NTPC up by 1.68%, Tata Motors up by 1.64%, Maruti Suzuki up by 1.56%, HDFC up by 1.55% and TCS up by 1.51%. On the flip side, Sun Pharma down by 1.25%, Adani Ports &Special down by 1.21%, Larsen & Toubro down by 0.69%, Infosys down by 0.51% and GAIL India down by 0.34% were the top losers.

Meanwhile, Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, has given approval for over Rs 11,000 crore projects to improve rural road connectivity in the worst-affected left-wing extremism (LWE) districts from security angle. Under this project, more than 5,400 kilometres of road would be constructed/upgraded and 126 bridges/cross drainage works would be taken up at projected cost of Rs 11,724.53 crore. The roads will be operable throughout the year, irrespective of weather conditions.

The project will be implemented as a vertical under Pradhan Mantri Gram Sadak Yojana (PMGSY) to provide connectivity with necessary culverts and cross-drainage structures in 44 worst affected LWE districts and adjoining districts, critical from security and communication point of view. During the period of implementation that is 2016-17 to 2019-20, the Finance Ministry will allocate Rs 7,034.72 crore to the Rural Development Ministry for this project. The fund sharing pattern of LWE road project will be same as that of PMGSY that is in the ratio of 60:40 between the Centre and States for all States except for eight North Eastern and three Himalayan States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) for which it is 90:10.

The project will focus on 35 districts worst affected by Left wing extremism. As per the Ministry of Home Affairs, these districts account for 90 per cent of total LWE violence in the country and the nine adjoining districts are critical from the security angle. Ministry of Rural Development will be the responsible for sponsoring and implementing the project. The roads taken up under the scheme would include Other District Roads (ODRs), Village Roads (VRs) and upgrading of the existing Major District Roads (MDRs) that are critical from the security point of view.

The CNX Nifty traded in a range of 8,111.10 and 8,020.80. There were 41 stocks in green against 10 stocks in red on the index.

The top gainers on Nifty were Grasim Industries up by 3.95%, Yes Bank up by 3.35%, BPCL up by 3.23%, Eicher Motors up by 2.95% and Bosch up by 2.62%. On the flip side, Adani Ports &Special down by 1.64%, Sun Pharma down by 1.01%, Aurobindo Pharma down by 0.86%, Infosys down by 0.85% and Larsen & Toubro down by 0.74% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 7.41 points or 0.1% to 7,098.67, Germany’s DAX decreased 38.16 points or 0.33% to 11,436.83 and France’s CAC decreased 7.66 points or 0.16% to 4,840.35.

Asian equity markets ended mixed on Thursday, with the Japanese shares closing lower as weakness on Wall Street and a stronger yen hurt sentiment. Meanwhile, Chinese shares ended almost flat, with optimism spurred by fading liquidity stress but investors kept wary by the prospect of regulatory measures to curb aggressive investment in stocks by insurers. Investors stayed cautious following news that the insurance regulator planned to establish a discriminatory supervision system that would keep a closer watch on some unconventional insurance products, in the latest move to rein in aggressive stock investment.