Markets end in green for sixth straight session; eke out slender gains

Indian equity benchmarks managed to keep their head above water and went home with slender gains, extending their winning streak to sixth day. Markets started with caution but gradually gained momentum and traded with traction in first half of the session, as traders took some support with rating agency Moody’s latest report where it expecting an improvement in the credit profiles of India Inc next year, driven by better sales as it expects GST-related disruptions to wane, leading to an all-round recovery in economic activities. Some support also came with NITI Aayog vice-chairman Rajiv Kumar’s statement that India GDP growth rate in Q2 is likely at 6.2-6.3% and for the full year could be closer to 7% and for Second-half growth has to be 7.5%. The Budget for 2018-19 should focus on the social sector and an attempt should be made to provide universal health insurance cover to citizens. Markets also find some support with private report highlighting that Corporate India witnessed significant deal activity in the September quarter this year, as private equity invested $8.7 billion and M&A transactions attracted $2.1 billion. The investment of private equity and venture capital increased 180 percent in value terms over the last year to reach $8.7 billion in the July-September quarter of 2017.

However, markets took U-turn and entered into red terrain with traders turning cautious on the back of rally in oil prices which continued to reduce expectations of rate cuts ahead of the Reserve Bank of India’s policy meeting early next month. Traders took note on report that the government is likely to tighten the Insolvency and Bankruptcy Code (IBC) through an ordinance to ensure that wilful defaulters and promoters of companies in loan default over an extended period of time won’t be able to get their hands back on assets during the resolution process. Also, there will be buzz with the Cabinet giving its nod for constitution of the 15th Finance Commission that will decide the tax-sharing formula between the Centre and states for five years beginning FY21. Its recommendations will have to be in place before April 1, 2020. Though, recovery in last leg of trade helped markets to end marginally in green.

On the global front, European markets were trading mostly in red in early deals on expected lower trading flows due to Thanksgiving. The UK economy expanded in the third quarter as expected. Asian markets closed mostly in red, while Chinese stocks edged lower after Beijing took steps to halt the proliferation of small online lenders.

Back home, shares of insurance companies declined after the Finance Ministry formed a task force to study and submit a report on redrafting of the direct tax code within six months. Mixed reactions were displayed in aviation stocks. In order to provide a major boost to air connectivity in the Northeast, 92 new routes will be opened in the region in the second round of the government’s ‘Udaan’ scheme. Separately, passengers should brace themselves for a fare increase, as the government is likely to raise the passenger services fee (PSF) by at least 38% to meet the cost of security at Indian airports.

Finally, the BSE Sensex gained 26.53 points or 0.08% to 33,588.08, while the CNX Nifty was up by 6.45 points or 0.06% to 10,348.75.

The BSE Sensex touched a high and a low of 33,670.19 and 33,468.30, respectively and there were 9 stocks on gaining side as against 22 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.30%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were IT up by 1.30%, Energy up by 0.96%, TECK up by 0.84%, Capital Goods up by 0.45% and Consumer Durables was up by 0.43%, while Telecom down by 0.71%, Metal down by 0.34%, Auto down by 0.23% and Utilities was down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.60%, Sun Pharma up by 1.78%, Reliance Industries up by 1.60%, Power Grid up by 1.04% and Axis Bank up by 0.78%. On the flip side, Dr. Reddy’s Lab down by 2.10%, Adani Ports & SEZ down by 1.65%, Bajaj Auto down by 1.52%, Asian Paints down by 1.12% and NTPC down by 0.94% were the top losers.

Meanwhile, power Secretary Ajay Kumar Bhalla has said that power generating companies will be allowed to pass on the cost of retrofitting coal based-power plant for meeting emission norms. His statement came amid reports that the Power Ministry is going ahead for changes in regulations to allow the same. Besides, he said that the industry has been dragging retrofitting of power plants to reduce emission, citing less clarity on the issue but it was always clear. He also expressed his hopes that the deadline for new emission norms for coal-based power plants would be extended by the Ministry of Environment and Forests.

The cost of retrofitting a power plant ranges from Rs 1-2 crore per megawatt while for new coal-fired plant the cost is pegged at Rs 5 crore per MW. As many as 295 coal-based power plants have got more time of two to four years to meet strict new environment norms which were to be implemented by December 2017. In December 2015, Environment Ministry had unveiled tougher norms relating to consumption of water, particulate matter, SO2, NOx and mercury for coal-based thermal power plants.

Besides, NITI Aayog chief executive officer Amitabh Kant highlighted the issue of 92 GW plants running on high pollution fuels-furnace oil, diesel and pet coke. He also highlighted other issues like stranded assets worth Rs 1.8 lakh crore in gas-based segment alone and India heading towards a situation where stranded power plants would be worth Rs 5 lakh crore. He urged the forum to discuss these contentious issues including poor monitoring of rural and urban feeders, and said that out of 1.2 lakh rural feeders, just 4,000 are being monitored.

The CNX Nifty traded in a range of 10,374.30 and 10,307.30. There were 21 stocks in green as against 29 stocks in red on the index.

The top gainers on Nifty were Infosys up by 2.57%, Reliance Industries up by 2.04%, Sun Pharma up by 2.01%, Yes Bank up by 1.82% and Eicher Motors up by 1.56%. On the flip side, Dr. Reddy’s Lab down by 2.19%, Adani Ports & SEZ down by 1.93%, Indiabulls Housing Finance down by 1.66%, Bajaj Auto down by 1.27% and Asian Paints down by 1.16% were the top losers.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 21.42 points or 0.29% to 7,397.60 and Germany’s DAX was down by 26.81 points or 0.21% to 12,988.23, while France’s CAC was up by 9.7 points or 0.18% to 5,362.46.

Asian equity markets ended mostly in red on Thursday, taking the lead from a quiet overnight session on Wall Street as investors parsed through minutes from the US central bank. Hong Kong stocks ended sharply lower, with the benchmark Hang Seng falling back below the 30,000 point mark after the previous session’s breakthrough, as a tumble in mainland stocks soured sentiments. Further, Chinese shares ended lower, with the blue-chip index suffering its worst fall in nearly 1-1/2 years as worries about a selloff in the bond market bled into equities. Meanwhile, Japanese markets were closed for a public holiday.