Indian equities sustain uptrend; RIL rallies 11%

Indian benchmark indices edged higher for the fifth consecutive session on Wednesday on account of short-covering by investors ahead of February month F&O expiry on Thursday. Besides, Index heavyweight Reliance Industries, which helped the markets to remain in green till last, made its presence felt by surging around eleven percent in the session, as investors cheered the company's move to end free telecom services on its Jio platform and start charging customers from April 1. Jio is seeking to retain customers through special prime memberships at a one-time fee of Rs 99 and Rs 303 a month for unlimited voice, data and content. Furthermore, the country's third largest private sector lender, Axis bank, gained as much as 3.9 percent, after the report that the government has no plan as of now to exit Axis Bank via SUUTI. Sentiments got some support with a private report stating that India's millennial population is a massive disruptive force and driven by this supportive demographics along with government's policy action, Indian economy is likely to reach $ 5 trillion by 2025.  Market participants got some comfort as Prime Minister Narendra Modi urged the United States to keep an open mind on admitting skilled Indian workers, in comments that pushed back against Republican President Donald Trump's 'America First' rhetoric on jobs. Moreover, India is likely to pitch for a global agreement to make it easier to travel for work across borders at international fora like the G-20 and BRICS as increasing protectionism in the West has unsettled the country's services industry, which accounts for about 60% in the country's GDP and 28% of total employment.

On the global front, Asian markets ended mostly higher on Wednesday, getting little push from Wall Street's record high overnight, investors awaited the Fed's latest meeting minutes due later in the day for clues about the U.S. central bank's views on interest rates. However, the dollar dipped, reversing an earlier rise made on hawkish comments from Federal Reserve officials. Philadelphia Fed President Patrick Harker said he would likely support a quarter point rate increase at the central bank's March 14-15 meeting if the economy improves further. Further, lower yields on Japanese government bonds weighed on financial stocks, which logged modest declines, while Chinese shares ended higher after official data showed China's housing market continued to cool in January, a welcome sign for policymakers worried about a generalized bubble developing in the market. Meanwhile, European markets climbed, with higher oil prices, upbeat German business climate data and a slew of encouraging earnings updates helping underpin investor sentiments. 

Back home, after getting a positive start, the local benchmarks gained further in late morning trades, but the sentiments turned pessimistic in afternoon trades and indices started drifting lower, however the markets regained its momentum in the final hour of trade and finished the day with moderate gains. Eventually, the NSE's 50-share broadly followed index Nifty, got buttressed by around quarter percent to settle below the crucial 8,950 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over hundred points and closed above the psychological 28,800 mark. On the BSE sectoral space, the Energy counter remained the top gainer in the space with over four percent gains followed by the Oil & Gaspocket which surged close to two percent. On the flipside, IT counter languished at the bottom of the table with large cuts of over one and half a percent while the Utilities and Consumer Durables sectors settled with cuts of over a percent. The market breadth remained pessimistic, as there were 1094 shares on the gaining side against 1746 shares on the losing side, while 194 shares remained unchanged.

Finally, the BSE Sensex surged 103.12 points or 0.36% to 28864.71, while the CNX Nifty was up by 19.05 points or 0.21% to 8,926.90.

The BSE Sensex touched a high and a low of 28963.52 and 28789.30, respectively and there were 11 stocks on gainers side as against 19 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.58%, while Small cap index was down by 0.58%.

The top gaining sectoral indices on the BSE were Energy up by 4.53%, Oil & Gas up by 1.77%, Telecom up by 0.46% and Bankex up by 0.24%, while IT down by 1.69%, Utilities down by 1.42%, Consumer Durables down by 1.35%, TECK down by 1.35% and Power down by 1.28% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 10.97%, Axis Bank up by 3.93%, Asian Paints up by 2.92%, Coal India up by 2.63% and Hero MotoCorp up by 1.16%. On the flip side, NTPC down by 3.36%, TCS down by 2.22%, Power Grid down by 2.19%, Infosys down by 2.08% and Tata Steel down by 1.49% were the top losers.

Meanwhile, aided by sector-specific drivers and government’s growth oriented reforms, Indian Electronic System Design and Manufacturing (ESDM) industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 16-23 per cent to reach $ 171-228 billion by 2020. As per a joint report of the India Electronics and Semiconductor Association (IESA) and global services firm Ernst & Young (EY) in 2015, India's ESDM industry is sized at $ 82 billion, growing at a CAGR of eight per cent from 2013. By 2016-17 the sector will become a 100 billion plus opportunity. The report stated that the robust growth of India's electronics industry is primarily driven by huge domestic demand for products that can be attributed to a multitude of factors, including a growing middle class, rising disposable incomes and favourable duty structures.

IESA, the trade body representing the Indian ESDM industry in the country, in its report noted that domestic manufacturing of electronic products market is sized at $61.8 billion, growing at a CAGR of 10 per cent over the past two years and that the sector was expected to grow at a CAGR of 15-19 per cent to reach $123-150 billion by 2020 and is expected to increase further over the next five years from 17 per cent annual growth, while the Electronic Manufacturing Services segment is estimated to grow 42-68 per cent over the next five years to $ 6-13.2 billion by 2020.

It also said that electronic components market is estimated to grow at a CAGR of 22-33 per cent to reach $ 36.6-56.5 billion and design services revenue is forecast to reach $ 23.5-29.2 billion by 2020 at a CAGR of 13-18 per cent. To forecast industry outlook, apart from sector-specific drivers the report has taken several parameters in consideration such as overall  Gross Domestic Product (GDP) growth, currency movement, inflation, existing trade agreements, consumer sentiments, potential government consumption, existing government policies, investments, manufacturing entities, and type of value addition in India.

The CNX Nifty traded in a range of 8,960.75 and 8,905.25. There were 19 stocks in green as against 32 stocks in red on the index.

The top gainers on Nifty were Reliance Industries up by 11.17%, Idea Cellular up by 5.17%, Axis Bank up by 3.94%, Asian Paints up by 2.87% and Coal India up by 2.63%. On the flip side, NTPC down by 3.59%, Ambuja Cement down by 2.39%, Power Grid down by 2.35%, TCS down by 2.25% and Infosys down by 2.23% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 21.74 points or 0.3% to 7,296.57, Germany’s DAX increased 27.02 points or 0.23% to 11,994.51 and France’s CAC increased 19.51 points or 0.4% to 4,908.27.

Asian equity markets ended mostly higher on Wednesday, even as Japanese shares ended flat as the yen's retreat halted ahead of the Fed minutes due to be released later in the day. The minutes may provide more insight on the probability of a March interest rate hike, with traders putting their rate hike odds for March at 20 percent. Meanwhile, Chinese shares ended higher after official data showed China's housing market continued to cool in January, a welcome sign for policymakers worried about a generalized bubble developing in the market.