Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended the session with gains of around a percent. The firm trade pushed Nifty above 10,250 mark and Sensex gaining more than 300 points. The benchmarks made an optimistic start and traded with traction in early deals as sentiments remained up-beat after pre-poll surveys showed Bharatiya Janata Party would win the Gujarat elections this month. Heightened uncertainty about the BJP’s prospects in the state elections had weighed on investors’ sentiments in recent days. The survey came as a relief for investors, who want political stability as the government attempts to steer the economy out of the slump. Separately, leading brokerages mostly expect a bright 2018 for Indian equities. Going by their December 2018 targets, three of the five brokerages see an 8-17% return potential in benchmark indices. Some see politics playing a larger role as the 2019 general elections draw near. Additionally, a foreign brokerage report highlighted that the Indian economy is expected to witness cyclical growth recovery, with real GDP growth likely to accelerate from 6.4 percent this year to 7.5 percent in 2018 and further to 7.7 percent in 2019. The report added that corporate return expectations and balance sheet fundamentals are improving, and a strengthening financial system should be able to meet investment credit demand.

Investors took note of the finance ministry’s statement that the FRDI Bill, under consideration of a joint parliamentary committee, is depositor friendly and provides more protection to them compared to existing provisions. It has clarified that the provisions in the FRDI Bill do not modify current protections for depositors adversely at all, the ministry held, maintaining that these rather provide additional protections in a more transparent manner. Select banking stocks were buzzing in today’s trade on report that bank loan growth rate rose to a three-year high in November indicating businesses are ramping up output after the Goods and Services Tax (GST) induced disturbances. The data from Reserve Bank of India showed that banks loans including procurement credit and loans to individuals’ farmers and businesses rose 9.64% to Rs 79.6 lakh crore as of November 24, 2017, compared with 6.6% in the same period a year earlier.

On the global front, Asian markets closed in green, as economic news from China and Japan beat all expectations. China’s exports and imports unexpectedly accelerated last month after slowing in October, an encouraging sign for the world's second-biggest economy which has started to slow in the face of a government crackdown on debt risks and factory pollution. A measure of business confidence among big Japanese manufacturers is expected to hit its highest in more than a decade next week, buoyed by robust demand from overseas and upbeat corporate profits. The European markets were trading in green. British manufacturing output expanded for the sixth month in a row during October, the longest such run in at least 20 years, helped by the production of cars for export.

Back home, telecom stocks were buzzing in today’s trade on report that about a dozen companies, including Bharti Airtel and Reliance Jio, have evinced interest in buying majority stake or some of the assets of debt-laden Reliance Communications (RCom). While Airtel is keen to buy a select spectrum or airwaves as also some equipment held by RCom, others have shown interest in buying majority stake. Mixed reactions were witnessed in aviation stocks with Union Minister of State for Civil Aviation Jayant Sinha’s statement that India’s aviation market would surpass the US and China by crossing a billion passenger trips per year in the next 10 to 15 years. Jet Airways closed in red after the second biggest airline by domestic market share reported a sharp 91% Y-o-Y plunge in September quarter net profit.

The BSE Sensex ended at 33270.19, up by 320.98 points or 0.97% after trading in a range of 33034.20 and 33285.68. There were 25 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.92%, while Small cap index was up by 1.01%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 2.20%, Healthcare up by 1.45%, Basic Materials up by 1.29%, Metal up by 1.27% and Consumer Durables up by 1.24%, while there were no losers on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.56%, Hindustan Unilever up by 2.48%, Tata Motors - DVR up by 2.29%, Cipla up by 2.28% and Tata Motors up by 2.20%. (Provisional)

On the flip side, SBI down by 1.07%, Hero MotoCorp down by 1.02%, Reliance Industries down by 0.97%, TCS down by 0.67% and Dr. Reddy’s Lab down by 0.53% were the top losers. (Provisional)

Meanwhile, predicting a long term growth rate of 10-12 percent CAGR for Indian auto component industry, credit rating agency, ICRA in its latest report has said in the current financial year, the industry is expected to grow by 9-11 per cent and noted that the domestic passenger vehicle (PV) and two-wheeler (2W) segments will be the main drivers for growth in FY18.

The report said that the auto components industry may will grow relatively higher than underlying automotive industry in the medium to long term on the back of technological advancement and regulatory measures. The rating agency also expects healthy growth in domestic original equipment manufacturers (OEMs) segment, especially in 2W and PV industry, during FY18.

The report further said that sub-segments like light commercial vehicles, motorcycles and tractors will benefit form expected recovery in rural income. Besides, the report found that most of the auto ancillaries have witnessed improvement in their revenue growth during Q2 FY2018, driven by higher realization in the backdrop of steady increase in commodity prices. Further, in view of rising prices of commodity, the agency noted that this is putting pressure on the profitability of companies and tyre manufacturers were the worst hit due to sharp volatility in rubber prices.

The CNX Nifty ended at 10267.55, up by 100.85 points or 0.99% after trading in a range of 10195.25 and 10270.85. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 3.72%, ITC up by 3.69%, Indian Oil Corporation up by 3.64%, BPCL up by 3.18% and Sun Pharma up by 2.67%. (Provisional)

On the flip side, Bharti Infratel down by 2.39%, GAIL India down by 1.74%, Zee Entertainment down by 1.31%, Reliance Industries down by 1.10% and SBI down by 0.95% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 16.03 points or 0.22% to 7,336.78, Germany’s DAX increased 156.81 points or 1.2% to 13,201.96 and France’s CAC increased 36.28 points or 0.67% to 5,420.14.

Asian equity markets ended in green on Friday as Chinese trade data beat expectations and the US Congress passed a stopgap spending bill to keep the government funded until December 22 and continue budget negotiations. Also, media reports suggested that Britain and Ireland were close to a Brexit deal. The focus firmly remained on US jobs figures for November due tonight, with economists expecting US employment to increase by 200,000 jobs in November after surging up by 261,000 jobs in October. The unemployment rate is expected to hold at 4.1 percent. Chinese shares ended higher after data from the General Administration of Customs showed the country's exports grew at a faster-than-expected pace in November. Chinese exports advanced 12.3 percent year-over-year in dollar terms, well above the 5.9 percent rise economists had forecast. Imports surged 17.7 percent in November from a year ago, faster than the expected growth of 13.0 percent. Further, Japanese shares led regional gains as the yen weakened and data showed Japan's GDP grew an annual 2.5 percent in the July-September quarter, revised up from a preliminary estimate of 1.4 percent growth. Another report showed that Japan posted a current account surplus of 2.176 trillion yen in October - up 40.7 percent from last year.