Dalal Street celebrates early Diwali; Nifty hits all time high

Extending previous session’s rally, boisterous benchmarks once again showcased an enthusiastic performance on Friday, with frontline gauges surpassing their crucial 32,400 (Sensex) and 10,150 (Nifty) levels on sustained buying by fund and retail investors ahead of Diwali. Sentiments remained jubilant since start, as key bourses made a gap up opening and traded with traction through the session. Sentiments remained up-beat with traders taking encouragement from double dose of good economic news. India's industrial production grew at a nine-month high of 4.3% in August due to good performance of mining, electricity and capital goods sectors, while the retail inflation declined to 3.28% in September, compared to 4.39% during the same month last year and 3.36% in the previous month. Adding to the optimism, the International Monetary Fund lauded government’s recent efforts to lower the compliance burden under the Goods and Services Tax, but it also said that efforts should also be made to lower the tax slabs and minimise exemptions.

Some support also came after the World Bank chief said that the reforms undertaken by Prime Minister Narendra Modi have been significant and the results would be reflected in the mid and long-term growth figures, days after the global lender forecast that India’s GDP may slowdown to 7% in 2017. Investors took note of CRISIL’s report which highlighted that banks are likely to need nearly Rs 3.3 lakh crore this fiscal as provisioning for large NPA accounts in the current financial year. The report said with the economic value of assets underlying NPAs eroding with time, and resolutions are hard to come by, banks would need to step up on provisioning, mainly for large corporate NPAs. However, small amount of profit booking which took place in dying hour of trade pulled markets to end off day’s high.

Firm trading in European counters too aided sentiments ahead of fresh economic data, earnings, and speeches from policymakers of the Central Bank. Asian markets held firm near a 10-year high on Friday thanks to expectations of brisk global growth, although investors held off chasing the shares higher ahead of US and Chinese economic data as well as the Chinese Communist Party congress next week.

Back home, telecom stocks rang loud, as the Tata Group agreed to sell its mobile business to Bharti Airtel for free, on a 'debt-free, cash-free basis, intensifying the consolidation process underway in the telecom industry. Power stocks remained on buyers’ radar with the Minister of State (Independent Charge) for Power and Renewable Energy, R K Singh stating that India’s energy needs are going to double in the next 6-7 years at the present rate of growth of the economy. Stocks related to IT pack too edged higher after industry body NASSCOM shifted the revenue projection for India’s Business Process Management (BPM) sector to $50-$55 billion by 2025 from the present target of $50 billion by 2020. It added that the revenue for India’s BPM sector is projected to increase from $30 billion in FY17 to $50-55 billion by 2025.

Finally, the BSE Sensex surged 250.47 points or 0.78% to 32,432.69, while the CNX Nifty was up by 71.05 points or 0.70% to 10,167.45.

The BSE Sensex touched a high and a low of 32,508.59 and 32,247.74, respectively and there were 23 stocks on gaining side as against 8 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Telecom up by 5.27%, Bankex up by 1.33%, TECK up by 1.23%, Metal up by 1.17% and Basic Materials was up by 0.61%, while Healthcare down by 0.29%, FMCG down by 0.25%, Capital Goods down by 0.14%, Oil & Gas down by 0.14% and Utilities was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 7.89%, Tata Steel up by 2.86%, Kotak Mahindra Bank up by 2.20%, Coal India up by 2.00% and HDFC Bank up by 1.89%. On the flip side, Dr. Reddy’s Lab down by 1.09%, Mahindra & Mahindra down by 0.95%, Sun Pharma down by 0.87%, ITC down by 0.43% and Maruti Suzuki down by 0.41% were the top losers.

Meanwhile, identifying real estate as the one sector where maximum amount of tax evasion and cash generation takes place, Finance Minister Arun Jaitley has said that the issue of bringing the sector under the purview of the Goods and Services Tax (GST) will be discussed in the next meeting of the GST Council, which will be held on November 9. He also expects that the move would benefit the consumers who will only have to pay one final tax on the whole product.

As a result of this, the minister stated that the final tax paid on the whole product in the news tax regime would almost be negligible. He also said that the reduction in eventual expenditure along with incentivizing people to enter the tax net may also help reduce the size of shadow economy. He indicated that a 12 percent GST is levied on the construction of a complex, building, civil structure or intended for sale to a buyer, wholly or partly, however, land and other immovable property have been exempted from the GST.

Besides, according to the National Housing Bank (NHB), India's real estate sector is set to become a $180-billion industry by 2020, building on initiatives such as smart city mission and tax sops for investment trust REIT. On the basis of the Smart City projects, land record digitisation, withdrawal of corporate tax from REIT structure, the real estate sector growth is bound to attract funds and confidence of the investors as well in a big way.

The CNX Nifty traded in a range of 10,191.90 and 10,120.10. There were 32 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Bharti Airtel up by 7.68%, Bharti Infratel up by 4.17%, Tata Steel up by 2.73%, Bosch up by 2.56% and Ultratech Cement up by 2.24%. On the flip side, GAIL India down by 2.18 %, BPCL down by 1.48%, Zee Entertainment down by 1.42%, Sun Pharma down by 1.15% and Dr. Reddy’s Lab down by 1.07% were the top losers.

European markets were trading mostly in green; France’s CAC rose 0.39 points or 0.01% to 5,361.20 and Germany’s DAX was up by 5.73 points or 0.04% to 12,988.62, while UK’s FTSE 100 was down by 13.86 points or 0.18% to 7,542.38.

Asian equity markets ended mostly higher on Friday after strong trade data from China added to evidence of strength in the world's second-largest economy. Data showed that China's imports growth in September exceeded expectations, while exports expanded at a slower than expected pace, but remained robust. Further, the Japanese market surged to a fresh 21-year high, boosted by optimism that Prime Minister Shinzo Abe's ruling party will win the general elections later this month.