Benchmarks settle near intraday high levels; Sensex surpasses 28,300 mark

Indian equity benchmarks traded with traction and settled near intraday high levels with a gain of over half a percent on Thursday, with key gauges surpassing their crucial 28,300 (Sensex) and 8,750 (Nifty) levels. Traders took encouragement with report that India’s exports continued to grow for the fifth straight month, expanding by 4.32 percent to $ 22.11 billion in January against $ 21.19 billion in the same month of 2016. Imports also rose, by 10.70 percent to $ 31.95 billion, during the month under review. Some support also came after Fed Chair Janet Yellen, who in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank's next rate hike.

Moreover, investors closely watched GST Council meet scheduled on February 18 and assembly elections in five states that will end on March 8. The performance of Prime Minister Narendra Modi’s party in ongoing state elections will determine if the trickle of foreign money returning to Indian stocks turns into a gush.

On the global front, European markets were trading in red, as investors offload positions in risky assets amid expectations that the Federal Reserve could raise interest rates more aggressively than expected following upbeat U.S. economic data. Asian markets ended mixed, as traders opted to take profit off the table at higher levels.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectoral front, IT stocks remained on buyers’ radar after the industry body NASSCOM said that restrictions on H-1B visas in the US and the impact of Brexit are threatening to disrupt the growth trajectory of India’s information technology sector. Buying in realty stocks too aided sentiments on reports that private equity investments in the real estate sector increased by 26 percent during 2016 and touched a nine-year high of nearly Rs 40,000 crore.

Stocks related to oil & gas sector remained in focus, as the Cabinet Committee of Economic Affairs approved the award of 31 contract areas under the Discovered Small Field (DSF) Bid Round 2016. The government expects to monetise 40 million tonnes of oil and 22 billion cubic metres (BCM) of gas reserves over 15 years through the awarding of contracts. In scrip specific development, State Bank of India (SBI) and three of its listed associates rallied with Cabinet approval for a proposal to merge the five subsidiaries with the parent, which will create a mammoth bank with 23,000 branches. SBI, State Bank of Bikaner & Jaipur (SBBJ), State Bank of Travancore (SBT) and State Bank of Mysore (SBM) ended in green, while the rest two associate banks - State Bank of Patiala and State Bank of Hyderabad - are unlisted.

The NSE’s 50-share broadly followed index Nifty gained over fifty to regain its psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and fifty points to finish above its psychological 28,300 mark. Broader markets too traded in-line with benchmarks and ended the session with a gain of over a percentage point. The market breadth remained in favor of decliners, as there were 1,809 shares on the gaining side against 991 shares on the losing side, while 178 shares remain unchanged.

Finally, the BSE Sensex surged 145.71 points or 0.52% to 28,301.27, while the CNX Nifty was up by 53.30 points or 0.61% to 8,778.00.

The BSE Sensex touched a high and a low of 28393.42 and 28263.45, respectively and there were 10 stocks on gainers side as against 20 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.25%, while Small cap index was up by 1.35%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.46%, Realty up by 2.14%, IT up by 2.04%, Metal up by 2.00% and Consumer Durables was up by 1.66%, while FMCG down by 0.92% was the lone losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.31%, Infosys up by 3.01%, Maruti Suzuki up by 2.84%, Tata Motors up by 2.14% and Tata Steel was up by 2.11%. On the flip side, ITC down by 2.45%, Asian Paints down by 1.18%, Adani Ports down by 0.75%, ICICI Bank down by 0.66% and Larsen & Toubro was down by 0.66% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Arvind Subramanian has suggested phasing out of Minimum Support Price (MSP) on foodgrains for farmers. He pointed that MSP originally came into being because we had a big problem of lack of self-sufficiency in foodgrain production, but we no longer have the scarcity of foodgrains, cereals, etc and hence such policies should not continue forever and there should be an expiry date to it.

MSP is fixed by the government to protect the producer against excessive fall in price during bumper production years. Subramanian said that it was aimed to provide incentives to farmers and now it has been successful, adding that MSP policy not only favours cereals, but de-facto favours cereal producing regions. It widens regions disparity.

Further he said that there is a way to rectify it and that is get rid of the MSP, to neutralize incentives across crops, and provide these incentives through other means like technological research, etc. However, he admitted that it is a difficult job to get rid of this, given the politics in India.

The CNX Nifty traded in a range of 8783.95 and 8719.60. There were 12 stocks in green as against 39 stocks in red on the index.

The top gainers on Nifty were Sun Pharma up by 4.21%, Aurobindo Pharma up by 3.33%, Infosys up by 3.09%, Tata Motors - DVR up by 2.80% and Maruti Suzuki was up by 2.76%. On the flip side, ITC down by 2.47%, Bharti Infratel down by 1.39%, Bosch down by 1.22%, Asian Paints down by 1.20% and BPCL was down by 0.79% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 33.57 points or 0.46% to 7,268.84, Germany’s DAX shed 26.5 points or 0.22% to 11,767.43 and France’s CAC was down by 18.64 points or 0.38% to 4,906.22.

Asian equity markets ended mixed on Thursday as upbeat US data coupled with Fed Chair Janet Yellen's hawkish tone in her latest remarks on Capitol Hill helped spur expectations of a faster pace of Fed rate-hike in 2017. US retail sales rose more than expected in January and consumer prices rose at their fastest pace in nearly four years, boosting prospects of an interest rate hike as early as March. Chinese stocks ended up as higher commodity prices and media reports of a pick-up in spending on railways and other infrastructure this year boosted material stocks. Meanwhile, Japanese shares retreated as the dollar slipped against rivals, including the Japanese yen.