Benchmarks extend gaining streak for fourth straight session

Extending northward journey for fourth straight day, Indian equity benchmarks ended the session with a gain of around half a percent, recapturing their crucial 9,900 (Nifty) and 31,700 (Sensex) levels. Sentiments remained jubilant through the session and key gauges after a gap-up opening traded in fine fettle. Sentiments remained up-beat since morning with industry body Assocham’s statement that biometric cards have facilitated disbursement of as much as Rs 83,184 crore to beneficiaries of Direct Benefit Transfer (DBT) schemes without the notorious leakages of the past. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that the Pradhan Mantri Jan Dhan Yojana and the related Jan Dhan- Aadhaar and Mobile number (JAM) trinity has the potential to link all Indians into one common financial, economic, and digital space.

Adding to the optimism, Niti Aayog said that India has good prospects of achieving over 8 percent growth within 2-3 years and the chances of massive cut in the poverty rate in the upcoming decade are excellent. Meanwhile, a private poll enlightened that India’s economic growth likely accelerated to 6.6 percent in the quarter just ended, but analysts are sounding increasingly worried that confusion over a new goods and services tax will dampen activity in coming months.

However, markets lost some of their gains in second half of the trade to end off day’s highs, as European shares fell in a broad sell-off as the euro strengthened after ECB chief Mario Draghi did not express concern about a strong currency in a closely watched speech. Asian markets closed mixed. China’s factories likely posted another solid month of growth in August, suggesting the world’s second-largest economy is still growing at a healthy clip despite rising financing costs and a cooling housing market.

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. Report that Nandan Nilekani returned to Infosys as non-executive chairman, promising to bring back stability to the beleaguered company following the exit of Vishal Sikka as CEO, too aided sentiments. On the sectoral front, banking stocks remained buzzing as the government notified the Banking Regulation (Amendment) Act under which it can authorize the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans. The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with PSBs. Separately, as per report the finance ministry is open to providing capital support for facilitating consolidation among state-owned banks, which are reeling under mounting bad loans.

The NSE’s 50-share broadly followed index Nifty gained around ninety points to reclaim its psychological 9,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex increased around two hundred and eighty points to end above its crucial 31,500 mark. The broader markets too traded with traction and ended the session with a gain of over a percent. The market breadth was in the favour of advances, as there were 1,617 shares on the gaining side against 962 shares on the losing side, while 135 shares remain unchanged.

Finally, the BSE Sensex gained 154.76 points or 0.49% to 31,750.82, while the CNX Nifty was up by 55.75 points or 0.57% to 9,912.80.

The BSE Sensex touched a high and a low of 31,809.70 and 31,701.67, respectively and there were 19 stocks on gaining side as against 12 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.02%, while Small cap index was up by 1.09%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.29%, IT up by 1.25%, TECK up by 1.14%, FMCG up by 1.11% and Power was up by 1.05%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Infosys up by 3.14%, NTPC up by 2.10%, Sun Pharma up by 1.96%, Hero MotoCorp up by 1.93% and Hindustan Unilever up by 1.87%. On the flip side, Dr. Reddys Lab down by 2.01%, Tata Motors down by 1.25%, Power Grid down by 1.00%, Tata Motors - DVR down by 0.75% and SBI down by 0.41% were the top losers.

Meanwhile, suggesting a host of reforms to drive India's economic prosperity, the government’s premier policy think tank NITI Aayog has said that the country has good prospects to enter into a high growth trajectory of over 8%, within the next two-three years. It also noted that the chances of the massive cut in the poverty rate in the upcoming decade are excellent.

The government think tank in its 'Three Year Action Agenda, 2017-18 to 2019-20' has come out with an elaborate blueprint for reforms in the economy, judiciary, regulatory structure and social sectors. The Action agenda proposes linking central government expenditure to future priorities, these include shifting additional allocations to high-priority sectors which are more likely to promote development. The proposals also indicate substantial expansion in expenditures by 2019-20 on education, health, agriculture, rural development, defence, railways, roads and other categories of capital expenditure. Further, the agenda suggested ways to facilitate urbanization in the country and deal with key challenges include affordable housing, infrastructure development, public transport and promotion of Swachh Bharat.

The document also recommended host of actions to eliminate corruption and black money, and increase tax base besides recommending reforms in civil services and electoral process. It also called for strengthening and streamlining regulatory structure governing sustainability of environment. The suggestions for reforming the judicial system revolve around streamlining human resource availability and performance, increasing and strengthening avenues for dispute resolution and extensive use of ICT to improve efficiency.

The CNX Nifty traded in a range of 9,925.75 and 9,882.00. There were 35 stocks in green as against 16 stocks in red on the index.

The top gainers on Nifty were Infosys up by 3.09%, Indian Oil Corporation up by 3.00%, NTPC up by 2.40%, Yes Bank up by 2.18% and Sun Pharma up by 2.07%. On the flip side, Dr. Reddys Lab down by 1.83%, Power Grid down by 1.65%, Tata Motors down by 1.08%, Tata Motors - DVR down by 0.77% and Tata Steel down by 0.67% were the top losers.

European markets were trading in red; Germany’s DAX declined 65.54 points or 0.54% to 12,102.40, France’s CAC decreased 23.41 points or 0.46% to 5,080.92 and UK’s FTSE 100 was down by 5.6 points or 0.08% to 7,401.46.

Asian equity markets ended mixed on Monday after the annual meeting of central bankers in Jackson Hole, Wyoming, offered little surprises, with both Fed Chair Janet Yellen and ECB President Mario Draghi sticking to the script of the conference rather than discussing the course of monetary policy. Both warned against dismantling tough post-crisis financial rules that the Trump administration blames for stifling US growth. Chinese shares hit 20-month highs after data showed Chinese industrial firms maintained a profit surge in July, though the pace of growth eased from the previous month. Investors’ sentiments was also helped by reports that China's securities regulator will continue to support the mixed ownership reform of State-owned enterprises. Meanwhile, Japanese shares ended a choppy session on a flat note as the yen edged up in otherwise quiet trade in the wake of a North Korean missile test on Saturday.