Post Session: Quick Review

Today’s session ended on a firm note with equity benchmarks surging amid further strength in the rupee. The beginning of January series in the futures and options (F&O) space accelerated buying by participants, which supported the upside. The markets traded on a positive note in early deals with Finance Minister Arun Jaitley’s statement that the impact of demonetisation is clearly visible with tax collection figures seeing double-digit growth. He had said that there has been a 26.2 percent increase in central indirect tax collection till November 30, while till December 19, direct tax collection increase has been to the extent of 14.4 percent against a growth rate of only 8.3 percent previous year. Traders also took some encouragement with the Reserve Bank of India (RBI) easing norms for working capital lending to micro and small enterprises (MSEs) on difficulties faced by them, as a result of the sudden withdrawal of legal tender status of high-value currency notes. Investors also got some confidence with Agriculture Minister Radha Mohan Singh’s assurance that the growth in agriculture and allied sectors will be higher during this fiscal as the country is likely to harvest bumper crop buoyed by good rains. The Minister also said that the Centre will procure pulses and other crops if rates fall below the minimum support price (MSP) level. Furthermore, Union government has charted out a roadmap for the early completion of 99 irrigation projects under the Accelerated Irrigation Benefits Programme (AIBP) and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).  Some support also came with the Reserve Bank of India (RBI) easing norms for working capital lending to micro and small enterprises (MSEs) on difficulties faced by them, as a result of the sudden withdrawal of legal tender status of high-value currency notes.

On the global front, Asian markets ended mostly in green. China’s stock exchange closed in green taking cues from a survey by the People’s Bank of China which showed that business confidence among entrepreneurs in China rose for the third straight quarter in October-December. The entrepreneurs’ confidence index rose to 54.2 percent in the fourth quarter, 3 percentage points higher than in the third quarter. European stocks were trading lower, poised to end the year with their first annual decline since 2011 when the sovereign-debt crisis peaked.

Back home, sugar stocks Renuka Sugars, Mawana Sugars, Dwarikesh Sugar Industries, Andhra Sugars, Bajaj Hindusthan Sugar, Dalmia Bharat Sugar and Industries, Oudh Sugar Mills and EID-Parry India closed on a firm note on media report that the Union Finance Ministry is considering a proposal to restructure sugar mills’ debt, which is under severe stress due to lack of capacity utilization.

The BSE Sensex ended at 26598.82, up by 232.67 points or 0.88% after trading in a range of 26406.53 and 26678.60. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 0.66%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.57%, Power up by 1.39%, Capital Goods up by 1.03%, TECK up by 0.98% and IT up by 0.98%, while there were no losers on BSE sectoral front. (Provisional)

The top gainers on the Sensex were GAIL India up by 2.47%, Sun Pharma up by 2.31%, Power Grid up by 2.17%, ITC up by 2.08% and Infosys up by 1.79%. (Provisional)

On the flip side, Bajaj Auto down by 0.62%, Dr. Reddy’s Lab down by 0.42%, Tata Steel down by 0.37%, ONGC down by 0.29% and HDFC Bank down by 0.12% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor Urjit Patel has said that demonetisation move will have far reaching changes towards a transformative effect on the economy going forward, despite some short-term disruptions and public hardship. On the eve of the deadline for citizens to deposit demonetised currency in banks, he also cautioned that there was little room for complacency and it is important to guard against sporadic volatility in financial markets.

In his foreword to the half-yearly Financial Stability Report (FSR), Patel said that the withdrawal of specified bank notes (SBNs) will impart far reaching changes going forward. It is expected to significantly transform the domestic economy. He said the increasing adoption of digital modes of payments will lead to greater intermediation, efficiency gains, accountability and transparency.

RBI Governor acknowledged there have been short-term disruptions and hardship to the public because of the demonetisation of high value currency. Patel also said that introduction of reform measures like the Goods and Services Tax on indirect taxation and the Bankruptcy Code for resolving asset quality stress will impart resilience to the economy.

He said the global financial crisis led banks to do stress test and match risk appetites with risk taking capacity, and added that last year's asset quality review and the subsequent corrective actions, which led to a spike in bad assets and shaving profits, are efforts in the same direction. Further, he said the stress shown by the domestic banking system is partly reflective of legacy issues but enhanced transparency has helped to reinforce the stability of India's financial system. On the domestic macroeconomic front, he said that condition remains ‘stable’ with a cool-down in inflation though the growth momentum has slackened recently. The RBI had revised downward the gross value added (GVA) growth for 2016-17 to 7.1 percent from 7.6 percent, with evenly balanced risks.

The CNX Nifty ended at 8174.25, up by 70.65 points or 0.87% after trading in a range of 8114.75 and 8197.00. There were 45 stocks advancing against 6 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 3.21%, GAIL India up by 2.58%, Bosch up by 2.27%, Idea Cellular up by 2.27% and Sun Pharma up by 2.24%. (Provisional)

On the flip side, BPCL down by 0.88%, Bajaj Auto down by 0.66%, ONGC down by 0.42%, Dr. Reddy’s Lab down by 0.33% and HDFC Bank down by 0.27% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 25.4 points or 0.36% to 7,094.86, Germany’s DAX decreased 15.29 points or 0.13% to 11,435.76 and France’s CAC decreased 11.41 points or 0.24% to 4,827.06.

Asian equity markets ended mostly in green on Friday, with Chinese stocks rose slightly on the last trading day of 2016, but the blue-chip index ended the year lower despite signs of resilience in the world's second-largest economy. Meanwhile, Japanese shares dropped to a three-week low in choppy trade as investors took profits from the recent gains on the last trading day of the year, but the market managed to eke out marginal gains for the year.