Bulls roar on Dalal Street; Nifty hits record high

Bulls tightened their grip on Dalal Street on Monday with Nifty ending at record closing high of over 10,150 mark, while Sensex reclaimed 32,400 level. Markets made gap-up start and traded jubilantly throughout the session, as traders took some encouragement with foreign brokerage report that India is likely to overtake Japan and Germany to become the third largest economy in the next 10 years but needs to be consistent in reforms and focus more on the social sector. Markets continue to trade near higher levels taking support from report that the Modi government has sprung into action after the economy sent out some distress signals as GDP growth slipped to a three-year low, inflation shot up to a five-month high and current account deficit widened to a four-year peak. 

Adding to the optimism, Commerce and Industry minister Suresh Prabhu will soon meet the country’s top industrialists individually to seek an investment commitment from each of them for the next few years. The minister will hold one on one meeting with the heads of top 30 domestic companies, followed by group meetings, next month. The market participants shrugged off the report that trade deficit in the month of August widened to $11.64 billion from $7.7 billion during the same month a year ago. India’s exports rose 10.29 percent on a yearly basis to $23.81 billion in August on account of rise in shipments of engineering, petroleum, chemicals and pharmaceuticals products. Imports too increased 21.02 percent to $35.46 billion in August from $29.30 billion in the year-ago month due to rise in inward shipments of crude oil and gold.

Global cues too remained supportive with European counters making a positive start supported by gains among financial and industrial stocks. A survey showed that British households are feeling the tightest squeeze on their finances in three years and the Bank of England’s signal that it is getting close to raising interest rates is likely to make things worse. Asian markets ended mostly in green, as investors regained confidence after the weekend passed with no new provocation by North Korea.

Back home, Union Human Resource Minister Prakash Javadekar said that the central government has saved Rs 65,000 crore through Direct Benefit Transfer (DBT) in various public schemes. Meanwhile, consumer electronics manufacturer Dixon Technologies made a stellar debut on bourses and the stock closed up around 64% over its issue price of Rs 1,766, while Bharat Road Network had a tepid listing but somehow the scrip closed with marginal gains over its issue price of Rs 205.

Finally, the BSE Sensex surged 151.15 points or 0.47% to 32,423.76, while the CNX Nifty was up by 67.70 points or 0.67% to 10,153.10.

The BSE Sensex touched a high and a low of 32,508.06 and 32,361.25, respectively and there were 24 stocks on gaining side as against 7 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.73%, while Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were Telecom up by 1.88%, Capital Goods up by 1.47%, Consumer Durables up by 1.43%, Auto up by 1.24% and Consumer Discretionary Goods & Services up by 1.22%, while Oil & Gas down by 0.07% was the lone losing index on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.57%, Hindustan Unilever up by 2.77%, Larsen & Toubro up by 2.09%, Coal India up by 1.89% and Tata Motors - DVR up by 1.83%. On the flip side, ITC down by 0.95%, Tata Steel down by 0.92%, ONGC down by 0.90%, SBI down by 0.70% and Sun Pharma down by 0.53% were the top losers.

Meanwhile, calling for a cut in the levies on transportation of fuel, the industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has said that the consumer are getting restless about a three year high in the petrol and diesel prices because they feels the market pricing mechanism is being distorted by frequent tax hikes when the crude oil prices fell steeply. It noted that even after rising in the last three months, crude oil prices are mere half of $107 per barrel in May, 2014. It also said that if the prices are market determined, the retail prices should have been less than Rs 40 a litre.

The chamber has stated that it is true that crude oil has shot up by about 18 percent from $45.60 per barrel, taking the pump prices of petrol  in Delhi (for instance) to Rs 70.39 per litre from Rs 65.40 three months ago. It also said that the increase in the retail prices is far less than hike in crude oil, but the consumer is not willing to compare the crude prices of $45.60 in June versus $54 per barrel today. Adding further, it pointed out that with $107 per barrel, the retail price of auto fuel was Rs 71.51 per litre, then how come it is about the same when the Indian basket of crude is trading at half that level at $53.83 per barrel, the consumers would ask.

The report further said that even though the pricing regime has been linked to market determined rates, a sharp hike in taxes in the form of excise and sales tax or VAT by the Centre and states have distorted the path of reforms. It also said that consumers cannot be faulted because the reforms cannot be one way. It added that if the exchequer got a windfall on drop in crude prices by additional taxes, the same must be reduced commensurately. Besides, it noted that while the government needs resources for building infrastructure and welfare schemes, over-dependence on petrol and diesel, both by the centre and the states would hamper the economic growth.

The CNX Nifty traded in a range of 10,171.70 and 10,131.30. There were 39 stocks in green as against 12 stocks in red on the index.

The top gainers on Nifty were Bharti Infratel up by 4.55%, Bajaj Auto up by 3.71%, Indiabulls Housing Finance up by 3.08%, Hindustan Unilever up by 2.89% and Indusind Bank up by 2.57%. On the flip side, Tata Steel down by 1.09%, ONGC down by 0.90%, Tata Power down by 0.83%, Ambuja Cement down by 0.72% and ITC down by 0.71% were the top losers.

European markets were trading in green; France’s CAC increased 15.28 points or 0.29% to 5,229.19, UK’s FTSE 100 gained 17.77 points or 0.25% to 7,233.24 and Germany’s DAX was up by 33.9 points or 0.27% to 12,552.71.

Asian equity markets ended mostly higher on Monday as geopolitical worries eased and investors looked ahead to the US Federal Reserve and Bank of Japan's meetings later this week for clues on the direction of monetary policy. Chinese shares ended higher, bolstered by stronger-than-expected loan data that added to views economic growth is holding up well and by the loosening of restrictions on stock index futures trading. China’s financial futures exchange said on Friday it was cutting margin requirements and transaction fees for certain stock index futures contracts, as regulators use an ongoing equity market recovery to relax restrictions imposed during a 2015 crash. The Japanese market was closed for a public holiday.