Bulls tighten grip on Dalal Street; gain for seventh straight session

Extending their winning streak for seventh straight session, Indian equity benchmarks ended the trade with a gain of over quarter a percent, recapturing their crucial 10,350 (Nifty) and 33,600 (Sensex) levels. Sentiments remained upbeat throughout the session with traders taking support from a private report that the slowdown in the economy has bottomed out, and going forward, the pace of recovery will depend on initiatives the government takes to boost growth momentum, especially private investment. The report added that there has been improvement on some parameters of the economy following the slowdown, post demonetization and GST. Traders also took some encouragement with the Union minister Suresh Prabhu’s statement that the commerce and industry ministry is chalking out a 'proper' business plan based on market research in its bid to promote exports of goods and services. He added that proper market segmentation is the need of the hour to understand the potential of domestic goods and services. Securities and Exchange Board of India’s (SEBI) plan to ease takeover rules to speed up the resolution of insolvency proceedings for stressed companies as local lenders seek to recover about Rs 9 lakh crore from entities rendered unviable by the mounting debt pile, too aided sentiments.

Markets continued taking support from report that the global ratings agency Standard & Poor’s (S&P) will revise India’s sovereign ratings. In 2012, the outlook for the country was lowered to negative, which was raised to stable soon after the Modi government assumed office in 2014. The rating, however, remained unchanged at ‘BBB-’. Some support also came with Confederation of Indian Industry’s (CII) statement that the government's recent move to give infrastructure status to the logistics industry in India, will not only spur growth, but will also bring in more investments into this sector. Traders also took some comfort with the President’s assenting to the ordinance to amend the Insolvency and Bankruptcy Code (IBC) that will bar defaulters from bidding for the stressed assets received thumbs up from stakeholders who described it as a major step towards providing comfort to incoming new investors.

Positive trading in European counters too aided sentiments. The growing prospect of a grand coalition in Germany boosted sentiments around the region’s equities, as the DAX has been stuck around the 13,000-point level for the past two weeks. Asian markets were trading mostly in green with Japanese manufacturing activity expanding at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak.

Back home, stocks related to public sector oil marketing companies (OMCs) remained on buyers’ radar, as the government exempted the merger of oil and gas PSUs from the purview of competition watchdog CCI. However, PSU banking stocks remained under pressure in today’s trade as the amendment to the IBC that bars promoters from bidding for their own distressed companies could impact lenders as it would bring down the value of these assets. Mixed reactions displayed in hospital stocks on report that India may soon tighten the control on private hospitals and other clinical establishments, with the central government having decided to urge all states to implement an Act that was passed in 2010 in order to curb malpractices by such establishments.

Finally, the BSE Sensex gained 91.16 points or 0.27% to 33,679.24, while the CNX Nifty was up by 40.95 points or 0.40% to 10,389.70.

The BSE Sensex touched a high and a low of 33,738.53 and 33,639.98, respectively and there were 17 stocks on gaining side as against 13 stocks on losing side, while one stock remained unchanged on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.58%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.79%, Utilities up by 0.89%, IT up by 0.85%, TECK up by 0.79% and Oil & Gas was up by 0.69%, while Metal down by 0.60% and Basic Materials was down by 0.25% were the only losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.87%, Bajaj Auto up by 1.07%, Mahindra & Mahindra up by 1.05%, Kotak Mahindra Bank up by 0.98% and Power Grid up by 0.91%. On the flip side, Tata Motors - DVR down by 0.89%, SBI down by 0.79%, Adani Ports down by 0.74%, Hero MotoCorp down by 0.66% and ICICI Bank down by 0.64% were the top losers.

Meanwhile, a Sub Committee of the Financial Stability and Development Council (FSDC), Chaired by Reserve Bank of India (RBI) Governor Urjit R Patel, has reviewed major developments on global and domestic fronts that could impact on the financial stability of the country. The panel also discussed issues related to establishment of the National Centre for Financial Education (NCFE), operationalisation of information utilities registered by the IBBI, sharing of data among regulators and the implementation status of Legal Entity Identifier (LEI).

The FSDC also reviewed the activities of its various technical groups as well as the functioning of State Level Coordination Committees (SLCCs). In addition to this, it also discussed on the recommendations of the committees on FinTech and digital innovations, shadow banking implementation group and Stewardship Code.

The meeting was attended by Ministry of Corporate Affairs secretary Injeti Srinivas, Securities and Exchange Board of India (SEBI) chairman Ajay Tyagi, PFRDA chairman Hemant G Contractor, IBBI chief M S Sahoo, RBI deputy governors N S Vishwanathan, Viral V Acharya and B P Kanungo, FSDC secretary C S Mohapatra and RBI executive director Deepak Mohanty. The government has set up the FSDC to strengthen and institutionalise mechanism to maintain financial stability, enhance inter-regulatory coordination and promote financial sector development.

The CNX Nifty traded in a range of 10,404.50 and 10,362.25. There were 35 stocks in green as against 15 stocks in red on the index.

The top gainers on Nifty were Aurobindo Pharma up by 3.25%, GAIL India up by 1.86%, Bharti Infratel up by 1.71%, Infosys up by 1.69% and Indusind Bank up by 1.62%. On the flip side, Hindalco down by 1.51%, Vedanta down by 0.91%, SBI down by 0.85%, ICICI Bank down by 0.81% and UPL down by 0.69% were the top losers.

The European markets were trading mostly in green; France’s CAC increased 24.82 points or 0.46% to 5,404.36 and Germany’s DAX was up by 26.7 points or 0.21% to 13,035.25, while UK’s FTSE 100 was down by 14.63 points or 0.2% to 7,402.61.

Asian equity markets ended mostly higher on Friday, with Japanese shares resumed trading a day after a holiday. Otherwise, markets lacked cues from Wall Street, which was closed for the Thanksgiving holiday in the United States on Thursday, and was set to hold a shortened trading session on Friday. Japanese shares ended higher as expectations that the Bank of Japan would buy more exchange-traded funds offset drops in automakers. Meanwhile, Chinese markets closed slightly in green after a big sell-off in the previous day.