Indian benchmarks extend uptrend; Nifty ends above 8800 mark

It turned out to be a stable day for the Indian equity indices, which sustained sanguinity for the fourth successive session and climbed well over half a percent on Monday on hopes of a rate cut by the Reserve Bank of India at its policy meet scheduled on Wednesday, and increased inflows by foreign funds. Slowing inflation and a fiscally responsible budget may sway the Reserve Bank of India (RBI) to cut interest rates this week. Further, after four months of selling frenzy, overseas investors turned net buyers in February and pumped in over Rs 2,300 crore in the capital market over the last three sessions, enthused by clarity on FPI taxation. The latest inflow followed a net pullout of Rs 80,310 crore from equity and debt together in the past four months (October-January). Prior to that, FPIs had invested over Rs 20,000 crore in the capital market. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Investors’ morale remained upbeat with Economic Affairs Secretary Shaktikanta Das’ statement expressing confidence that the economy will grow upwards of 7 per cent next fiscal. He reiterated that there will be transient impact of demonetisation on the economy, but it will not spill over to the next fiscal. The Economic Affairs Secretary taking a dig at global rating agencies for failing to upgrade India's sovereign rating despite significant improvement in macroeconomic parameters, has said the agencies are several steps behind from reality and are missing out on something which only they can best explain. Meanwhile, Realty stocks extended their gains for the fourth consecutive sessions after finance minister Arun Jaitley accorded infrastructure status to affordable housing in Budget 2017 to encourage investment in the segment and offered tax sops for developers sitting on completed unsold inventories. Further, Auto stocks gained traction on Union Minister Nitin Gadkari’s statement that government is keen on implementing vehicle policy that aims at scrapping 15-year old commercial vehicles in the first phase and it will send the proposal to GST Council after Cabinet nod.

On the global front, Asian markets ended higher on Monday, cheered by the rise on Wall Street after President Donald Trump moved to scale back regulations on the financial industry last week. Solid US jobs data, higher oil prices on fears of new US sanctions against Iran and expectations that the Federal Reserve will refrain from raising interest rates next month, also supported regional sentiment.  Furthermore, Chinese stocks ended higher, even as a private business survey showed growth in China's services sector lost momentum at the start of 2017. The Caixin China General Services Business Activity Index fell to 53.1 in January from December's 17-month high of 53.4.

Back home, the local benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the key indices capitalized on the momentum and touched intraday highs in noon session but the indices failed to hold onto the highs and receded to intraday lows in mid afternoon trades. Yet, final hour buying ensured that the key indices do not shut shops way below the intraday highs. Eventually, the NSE’s 50-share broadly followed index, Nifty convalesced by over half a percent to settle above the crucial 8,800 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex accumulated close to two hundred points and closed above the psychological 28,400 mark. Moreover, broader markets managed a touch better than the larger peers today as the BSE’s midcap and smallcap indices settled with gains of 1.10% and 0.88% respectively. The market breadth remained optimistic, as there were 1847 shares on the gaining side against 1054 shares on the losing side, while 161 shares remained unchanged.

Finally, the BSE Sensex gained 198.76 points or 0.70% to 28439.28, while the CNX Nifty was up by 60.10 points or 0.69% to 8,801.05. 

The BSE Sensex touched a high and a low of 28487.28 and 28340.39, respectively and there were 22 stocks on gainers side against 8 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index jumped 1.10%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 1.90%, FMCG up by 1.28%, Consumer Durables up by 1.27%, Power up by 0.96% and Bankex up by 0.94%, while Metal down by 0.30% was the sole losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.20%, ICICI Bank up by 3.18%, Adani Ports & Special economic zone up by 1.99%, Axis Bank up by 1.49% and Hero MotoCorp up by 1.46%. On the flip side, Dr. Reddy’s Lab down by 1.49%, Cipla down by 1.13%, ONGC down by 0.97%, Bajaj Auto down by 0.40% and Coal India down by 0.34% were the top losers.

Meanwhile, highlighting global ratings agencies for failing to upgrade India's sovereign rating despite significant improvement in macroeconomic parameters, Economic Affairs Secretary Shaktikanta Das has said the agencies are out of touch with India’s reality and are missing out on something which only they can best explain. He added that last upgrade India got was several years ago. He noted that Fitch upgraded India's sovereign rating to BBB in 2006, while S&P in 2007. 

Das has said that list out the reform measures which India has undertaken in the last two-and-a-half years, and compare them with the track record of reforms in any other country. He said ‘Look at our GDP, compare with other countries’ GDP. Look at our macroeconomic numbers, inflation, current account deficit, compare with other countries. Now I really do not understand, I think rating companies are missing out on something which only they can explain’. 

He said that GST is now happening still no weightage has been given for introduction of GST. Also, there is no resolution mechanism for dealing with stressed assets. Additionally, the government has enacted Insolvency and Bankruptcy Law, but no weightage has been given to that. He also said that the government has passed and implemented Aadhaar legislation which is unique in the world, yet no recognition came India's way. He said 'I think it should be a moment for retrospection. It should be moment of retrospection for rating companies.'

The CNX Nifty traded in a range of 8,814.10 and 8,770.20. There were 33 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Ambuja Cement up by 4.25%, ACC up by 4.21%, Sun Pharma up by 4.12%, ICICI Bank up by 3.11% and Aurobindo Pharma up by 3.05%. On the flip side, Dr. Reddy’s Lab down by 1.73%, Cipla down by 1.31%, Hindalco down by 1.15%, Tata Motors - DVR down by 1.09% and ONGC down by 1.05% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 13.21 points or 0.18% to 7,201.51, Germany’s DAX increased 3.73 points or 0.03% to 11,655.22 and France’s CAC increased 10.39 points or 0.22% to 4,835.81.

Asian equity markets ended higher on Monday, with Japanese market moving up as gains among banking stocks after US President Donald Trump signed two directives Friday, rolling back key financial regulations of the Obama era. Solid US jobs data, higher oil prices on fears of new US sanctions against Iran and expectations that the Federal Reserve will refrain from raising interest rates next month also supported regional sentiment. The US economy added a stronger-than-expected 227,000 jobs in January against expectations of 175,000. The unemployment rate inched up to 4.8 percent from 4.7 percent in December and the annual rate of average hourly employee earnings growth slowed to 2.5 percent from 2.8 percent, pushing back the need for Fed officials to hike interest rates at their March meeting. Further, Chinese shares ended higher, even as a private business survey showed growth in China's services sector lost momentum at the start of 2017. The Caixin China General Services Business Activity Index fell to 53.1 in January from December's 17-month high of 53.4.