Indian equities gain for second straight session; Nifty ends above 9650 mark

Indian stock markets witnessed a fairly stable day of trade on Thursday, as sanguinity got reinforced after minutes from the Federal Reserve’s last meeting showed a lack of consensus on the future pace of interest rate increases. Wednesday’s optimism got spilled over into the Thursday’s session helping the frontline indices in extending the winning momentum for second successive session, as sentiments got a boost after International Monetary Fund’s (IMF’s) report that India’s growth outlook has improved as the impact of last year’s demonetization exercise seems to be fading and recent key structural reforms continue to pay off. Besides, hopes of positive quarterly earnings and smooth roll-out of the goods and services tax (GST) also lifted sentiment.

Some support also came with a private report indicated that Indian economy is expected to recover in the coming quarters and the country is expected to clock a real GDP growth of 6.9 percent in this financial year. The report also noted that the negative effects from the demonetization measure is already wearing off, and the Indian economy will likely benefit from positive demographic trends, greater external stability (due to improved terms of trade from low oil prices), and continued reforms that should help to improve the country’s admittedly poor business environment. Investors’ morale remained upbeat as Finance Minister Arun Jaitley said that despite the anticipation of initial disruptions on account of the GST, the rollout of the new indirect tax regime from July 1 was smooth and without any significant glitches. Meanwhile, PSU Banking stocks gained traction after brokerage houses upgraded leading PSUs such as Bank of Baroda and Punjab National Bank as valuations turned reasonable after recent correction on NPA concerns.

On the global front, Asian equity markets ended mostly lower on Thursday, as oil prices resumed a downtrend and minutes from the Federal Reserve’s last meeting showed a lack of consensus among members over when to start reducing the Fed’s securities portfolio. Japanese stocks edged lower as ongoing tensions around North Korea continued to sap risk appetite, while the retail sector underperformed on dismal earnings from convenience stores. Investors are focused on major events this week such as US jobs data and the Group of 20 nations’ meeting in Germany, where US President Donald Trump and other leaders are expected to discuss steps to rein in North Korea’s weapons programme. The United States said it was ready to use force if needed to stop North Korea’s nuclear missile programme but said it preferred global diplomatic action against Pyongyang. Meanwhile, China stocks inched up, helped by strong gains in resource firms on expectations of robust mid-year earnings.

Back home, the market breadth remained optimistic, as there were 1537 shares on the gaining side against 1171 shares on the losing side, while 135 shares remained unchanged.

Finally, the BSE Sensex gained 123.78 points or 0.40% to 31369.34, while the CNX Nifty was up by 36.95 points or 0.38% to 9,674.55. 

The BSE Sensex touched a high and a low of 31460.70 and 31264.86, respectively and there were 17 stocks on gainers side as against 14 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.30%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Realty up by 1.57%, Telecom up by 1.26%, FMCG up by 0.75%, PSU up by 0.68% and Bankex up by 0.45%, while Oil & Gas down by 0.38%, Consumer Durables down by 0.32%, Utilities down by 0.29%, IT down by 0.26% and Power down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.15%, ITC up by 1.72%, Coal India up by 1.52%, Bharti Airtel up by 1.36% and Maruti Suzuki up by 1.33%. On the flip side, Bajaj Auto down by 1.52%, Mahindra & Mahindra down by 1.30%, Sun Pharma down by 1.04%, Axis Bank down by 0.93% and ONGC down by 0.77% were the top losers.

Meanwhile, expressing happiness over the smooth rollout of the recently launched Goods and Services Tax (GST), Finance Minister Arun Jaitley has said that although the government had factored in a huge amount of disruption, the switchover to GST has been smoother than anticipated and noted that implementation of new tax regime along with last year’s demonetization move would increase the tax base ratio over a period of time.

Jaitley further said that after these two big moves, the manner in which India has taken difficult decisions and implemented them have made reforms look easier, adding that the next one or two years will be the period of implementation for the country and net impact would be greater buoyancy in the tax collections. FM however expressed some concern too, saying that in the medium or long term, the direction of the country’s expenditure should be the main priority.

Further, while highlighting that the economy is becoming more competitive in many areas like infrastructure and aviation sector, finance minister said that the direction in which the economy is moving is not reversible.  He also said that India has potential to sustain a high level of growth over the next decade.

The CNX Nifty traded in a range of 9,700.70 and 9,639.95. There were 28 stocks in green as against 23 stocks in red on the index.

The top gainers on Nifty were Bharti Infratel up by 2.96%, SBI up by 2.16%, Indiabulls Housing Finance up by 1.92%, ITC up by 1.83% and Coal India up by 1.62%. On the flip side, IOC down by 1.27%, Hindalco down by 1.16%, M&M down by 1.01%, Sun Pharma down by 0.86% and Eicher Motors down by 0.82% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 29.3 points or 0.4% to 7,338.30, Germany’s DAX decreased 80.49 points or 0.65% to 12,373.19 and France’s CAC decreased 44.42 points or 0.86% to 5,135.68.

Asian equity markets ended mostly in red on Thursday as oil prices resumed a downtrend and minutes from the Federal Reserve's last meeting showed a lack of consensus among members over when to start reducing the Fed's securities portfolio. Fed officials were determined to continue raise interest rates even with muted inflation levels, but they were divided in their opinions on the future pace of US interest rate increases, the minutes showed. Investors awaited cues from this week's G20 summit and Friday's US jobs report for further direction. Japanese shares ended lower on a stronger yen amid rising geopolitical tensions on the Korean peninsula. Further, China stocks inched up, helped by strong gains in resource firms on expectations of robust mid-year earnings.