Benchmarks witness spirited performance; Nifty reclaims 9,850 mark

Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges garnering gains of around three fourth of a percent ahead of RBI monetary policy review begins today and the decision is due tomorrow. This has led to unabated buying by domestic financial institutions, which added to the positive mood. Sentiments remained jubilant since start with bourses making gap-up opening, as traders took encouragement with Finance Minister FM Arun Jaitley’s indication that the government would consider reducing the goods and services tax slabs and easing compliance burden for small taxpayers once revenues from GST better those from the previous tax regime. Some support also came after Industry body Assocham urged the government to relax fiscal deficit targets and boost public expenditure as a means to accelerate India’s economic growth, which slipped to 5.7 percent in the June quarter. Former RBI Governor C Rangarajan also said that the government needs to “pick up very fast” to be able to maintain a healthy annual growth.

Markets maintained the bullish momentum and traded with jubilation till end as some support came after the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, remained unchanged at 51.2 in September. As per the report, September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July. Adding to the optimism, the Centre has begun a slew of measures to boost medium and small scale industries, exports and the textile sector. As per report, September 27 Cabinet meeting had discussed proposals related to providing stimulus to medium and small-scale industries, exports and the textile sector which have not performed to their optimum strength in last few quarters.

Firm global cues provided much needed support to domestic markets, with European markets making a positive start, as market sentiments remained strong despite the Las Vegas mass shooting late Sunday and ongoing political turmoil in Spain. Asian markets ended mostly in green led by Japanese Nikkei, which edged higher by over a percent as Japanese companies’ inflation expectations eased slightly in September from three months ago in a worrying sign the economy continues to struggle with a deflationary mindset.

Back home, Finance Minister Arun Jaitley’s statement that net collections till September 18 of this fiscal grew 15.7% to Rs 3.7 lakh crore, too aided sentiments. The number of taxpayers rose to 6.26 crore in 2016-17 from 4.72 crore in 2012-13. Traders shrugged off Fitch Ratings’ report of trimming its forecast for India’s economic growth in 2017-18 by half a percentage point to 6.9% from its earlier projection of 7.4%. Meanwhile, SBI Life Insurance Company made a tepid debut on the bourses and went home with a marginal gain 1%. The Rs 8,400 crore IPO was subscribed 3.58 times.

Finally, the BSE Sensex surged 213.66 points or 0.68% to 31,497.38, while the CNX Nifty was up by 70.90 points or 0.72% to 9,859.50.

The BSE Sensex touched a high and a low of 31,615.28 and 31,440.48, respectively and there were 22 stocks on gaining side as against 9 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.77%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.23%, Energy up by 1.47%, Oil & Gas up by 1.34%, Basic Materials up by 1.18% and Metal was up by 1.18%, while Power down by 0.49%, Capital Goods down by 0.20% and Telecom was down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 4.95%, Tata Motors up by 3.78%, Asian Paints up by 2.72%, Reliance Industries up by 2.07% and Bajaj Auto up by 1.79%. On the flip side, Power Grid down by 2.16%, Maruti Suzuki down by 1.06%, Bharti Airtel down by 1.04%, SBI down by 0.97% and Cipla down by 0.89% were the top losers.

Meanwhile, expressing hopes about India’s gross domestic product (GDP) growth recovery in the coming months, Former Reserve Bank of India (RBI) governor C Rangarajan has said that the economy needs to pick up very fast to be able to maintain a healthy annual growth for the financial year 2017-18. He also said that the government should take quick measures to push the economic growth.

Besides, Rangarajan has indicated that the economy has bottomed out because, for two quarters it has remained at 5.7 percent. He also noted that the economy needs to grow at 7 percent in three quarters even to have a growth rate of 6.5 percent for the year as a whole. He also pointed out that the glitches of goods and services tax (GST) may be over and some of the effects of demonetisation would also be neutralised with the new currency coming in. Therefore, he said that the growth rate needs to pick up much faster.

The former governor also suggested the need for revival of all viable stalled projects, recapitalisation of banks at the earliest and removal of impediments in the way of higher corporate investments to give a push to the economy. He also stated that one immediate thing that needs to be done is to recapitalise the banks as quickly as possible to enable them to lend more. He added that the government should meet industry bodies in small groups to find out the impediments that have come in the way of higher level of investment and try to remove them.

The CNX Nifty traded in a range of 9,895.40 and 9,831.05. There were 38 stocks in green as against 12 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were GAIL India up by 4.19%, Tata Motors up by 3.61%, Aurobindo Pharma up by 2.36%, Reliance Industries up by 2.32% and Indiabulls Housing Finance up by 2.26%. On the flip side, Power Grid down by 2.56%, Bharti Airtel down by 1.64%, Cipla down by 1.48%, Maruti Suzuki down by 1.39% and SBI down by 0.97% were the top losers.

European markets were trading in green; UK’s FTSE 100 rose 5.95 points or 0.08% to 7,444.79, France’s CAC increased 13.76 points or 0.26% to 5,364.20 and Germany’s DAX was up by 73.79 points or 0.58% to 12,902.65.

Asian equity markets ended mostly higher on Tuesday, tracking an overnight rally on Wall Street. The dollar was bolstered by upbeat US economic data and tax reform hopes while oil prices slipped further in Asian deals after falling more than 2 percent on Monday amid signs of higher output. Japanese shares rallied to hit two-year highs as the yen held weak in the wake of new data pointing to strength in the world's largest economy. Markets in South Korea and China remained closed for the Harvest Festival and National Day, respectively.