Markets extend winning for fourth straight session

Indian equity benchmarks extended their gaining streak for fourth straight day and settled with a gain of around one third of a percent amid sanguine global cues. Markets traded in fine fettle throughout the session, though markets ended off day highs on late hour profit booking. Sentiments remained up-beat since beginning of the trade with traders taking support with international rating agency Moody’s report which expecting growth to revive next year, has said a 7.6% GDP expansion can result in corporates reporting a pre-tax profit growth of 5-6% over the next 12-18 months. The rating agency over the weekend had revised upwards sovereign ratings to Baa2 after almost 14 years. According to the rating agency, growth will “rebound strongly in 2018 because the supply chain disruptions of 2017 will end soon”. Some support also came with report that investors pumped over Rs 51,000 crore into various mutual fund schemes in October after pulling out more than Rs 16,000 crore in the preceding month.

Market participants also took some encouragement with chief economic adviser Arvind Subramanian hinting that the government may combine the 12% and 18% slabs under the goods and services tax (GST) into one in the near future and reserve the 28% rate only for demerit goods. Investors took note that the government has moved a notch closer to achieving its disinvestment target through minority stake sales in state-run companies as it has garnered around Rs 14,500 crore through its latest offering - the Bharat-22 Exchange Traded Fund (ETF). The Bharat-22 ETF, which comprises shares of 22 firms, was oversubscribed four times and saw bids of nearly Rs 32,000 crore coming in, with foreign institutional investors (FII) putting in nearly one-third of the amount bid.

Firm trade in European markets too aided sentiments with CAC, DAX and FTSE trading in green and the euro hit an eight-day low against sterling, with investors’ sentiments curbed by a political impasse in Germany. Britain’s budget gap unexpectedly widened last month, underscoring finance minister Philip Hammond’s challenge as he juggles calls for more spending in his budget on Wednesday with the prospect of weaker economic growth ahead. Asian markets ended mostly in green, supported by over half a percent gain in Nikkei, as the greenback remained supported by higher US bond yields.

Back home, traders booked some of their profit at higher levels in last leg of trade which pulled markets down from day’s high. On the sectoral front, select consumer durables stocks were buzzing in today’s trade on reports that the government may soon cut rates on consumer durables such as refrigerators and washing machines, which are currently in the 28% tax bracket. The move is likely to be a significant boost for the sector plagued by excess capacity and slowdown. The economy will get a fillip from the likely consumption boost and better compliance in this key sector. Shares of logistics companies remained on buyers’ radar after the government given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments. However, Realty stocks edged lower despite Fitch Ratings in its latest report forecasted a stable outlook for the Indian real estate. The rating agency also expects unsold inventory to fall from peak level in 2018.

Finally, the BSE Sensex surged 118.45 points or 0.36% to 33,478.35, while the CNX Nifty was up by 28.15 points or 0.27% to 10,326.90.

The BSE Sensex touched a high and a low of 33,625.05 and 33,437.61, respectively and there were 21 stocks on gaining side as against 10 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.10%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.98%, Healthcare up by 1.76%, Telecom up by 1.00%, Energy up by 0.96% and Oil & Gas up by 0.84%, while Realty down by 1.33%, FMCG down by 0.17%, Bankex down by 0.05% and PSU was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.99%, Sun Pharma up by 4.18%, Cipla up by 2.31%, Bharti Airtel up by 2.13% and NTPC up by 1.61%. On the flip side, Coal India down by 1.51%, ITC down by 1.08%, TCS down by 1.04%, Power Grid down by 1.03% and Kotak Mahindra Bank down by 0.77% were the top losers.

Meanwhile, with an aim to help India increase its power generation capacity through cleaner, renewable energy sources, the union government and World Bank have signed a $98 million loan pact along with a $2 million grant agreement. Under the agreement, the Shared Infrastructure for Solar Parks Project will finance the Indian Renewable Energy Development Agency (IREDA) to provide sub-loans to states to invest in various solar parks.

The IREDA will utilise the funding under this project to develop the common infrastructure such as power pooling substations, intra-park transmission infrastructure and provide access to roads, water supply and drainage. While some states intend to provide a full range of infrastructure services to the selected private or public sector developers, others plan to provide only pooling stations to facilitate internal evacuation. The solar parks will be mostly under the Ministry of New and Renewable Energys (MNRE) Solar Park Scheme. The first two solar parks are in the Rewa and Mandsaur districts of Madhya Pradesh, with targeted installed capacities of 750 MW and 250 MW respectively. Other states where potential solar parks could be supported under this project are in Odisha, Chhattisgarh, and Haryana.

This project will help establish large-scale solar parks and support the government’s plan to install 100 gigawatts (GW) of solar power out of a total renewable-energy target of 175 GW by 2022. The government is committed to set-up an enabling environment for solar technology penetration in the country. With about 331 GW of installed capacity, India's power system is among the largest in the world. Yet, the per capita electricity consumption is less than one-third of the global average.

The CNX Nifty traded in a range of 10,358.70 and 10,315.05. There were 29 stocks in green as against 20 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 5.40%, Sun Pharma up by 4.19%, Tech Mahindra up by 3.82%, UPL up by 3.58% and Bharti Airtel up by 2.28%. On the flip side, Indiabulls Housing Finance down by 2.29%, Coal India down by 1.85%, ITC down by 1.43%, Power Grid down by 1.34% and TCS down by 1.23% were the top losers.

European markets were trading in green; UK’s FTSE 100 rose 14.61 points or 0.2% to 7,404.07, France’s CAC increased 26.36 points or 0.49% to 5,366.81 and Germany’s DAX was up by 70.04 points or 0.54% to 13,128.70.

Asian equity markets ended mostly in green on Tuesday as overnight gains on Wall Street and solid economic data from Germany and the US helped investors shrug off renewed worries over political uncertainty in Germany. Japanese shares rose notably as the greenback remained supported by higher US bond yields. Japanese stocks improved further after large cap stocks such as automakers and manufacturers of factory automation equipment rallied, while North Korean tensions supported defence-related shares.