Bulls tighten grip on Dalal Street; Nifty regains 10,250 mark

Extending previous session’s northward journey, Indian equity benchmarks displayed spirited performance on Friday, with frontline gauges recapturing their crucial 33,200 (Sensex) and 10,250 (Nifty) levels. The markets' mood remained up-beat throughout the day and benchmarks, after a gap-up opening, fervently gained from strength to strength, as investors continued hunt for fundamentally strong stocks amid firm global cues. Sentiments remained positive since beginning with International Energy Agency's (IEA) report that India is emerging as a 'major driving force' in global energy trends, with all modern fuels and technologies playing a part. Meanwhile, the finance ministry has said 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.

Markets extended rally in later part of the trade with pre-poll surveys showing 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. Buying in banking stocks too aided sentiments 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. Separately, 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.

Firm opening in European counters too aided sentiments with British manufacturing output expanding 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. Asian markets too ended 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.

Back home, stocks related to power sector remained on buyers’ radar, as Minister of State (Independent Charge) for Power and Renewable Energy, RK Singh, has coaxed State governments to reduce the number of slabs for selling power. Stocks related to auto component sector edged higher after ICRA in its latest report said, the industry is expected to grow by 9-11 percent and noted that the domestic passenger vehicle (PV) and two-wheeler (2W) segments will be the main drivers for growth in FY18. Aviation stocks flied higher 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.

Finally, the BSE Sensex soared 301.09 points or 0.91% to 33,250.30, while the CNX Nifty was up by 98.95 points or 0.97% to 10,265.65.

The BSE Sensex touched a high and a low of 33,285.68 and 33,034.20, respectively and there were 25 stocks on gaining side as against 6 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.89%, while Small cap index was up by 1.00%.

The top gaining sectoral indices on the BSE were FMCG up by 2.23%, Metal up by 1.36%, Healthcare up by 1.35%, Basic Materials up by 1.33% and Consumer Durables was up by 1.15%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ITC up by 3.44%, Sun Pharma up by 2.21%, Tata Motors up by 2.21%, Tata Motors - DVR up by 2.05% and Hindustan Unilever up by 1.97%. On the flip side, Hero MotoCorp down by 1.19%, SBI down by 1.09%, Reliance Industries down by 1.04%, TCS down by 0.64% and Asian Paints down by 0.56% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that timely equity infusion in most microfinance institutions (MFIs) has helped to improve their overall asset quality, despite delinquencies pressures continue to persist. It pointed out that the sector received Rs 1,500 crore capital infusion in the first half of FY18 (H1FY18) as against Rs 4,700 crore in FY17 indicating continued support for the MFIs and investor confidence in sectors’ growth potential.

As per the report, the shock of a sharp and sudden dip in asset quality post-demonetisation has so far been absorbed by equity infusion into most MFIs, the pain is not fully over yet as reflected by the analysis of collection efficiencies, delinquencies, profitability, capitalisation and solvency position during the first of FY18. Given the projected growth rate of 25-35 percent over the next three years for MFI in India and the expected higher provisioning over the next three-four quarters, ICRA retains the capital requirement estimates of about Rs 7,000-9,000 crore till FY20.

The rating agency further indicated that the overall collection efficiency in the microfinance sector continued to improve, increasing to 94% in September 2017 from a low of 87% in December 2016. It pointed out that an encouraging trend is that the improvement was widespread across almost all affected districts except the Vidarbha region of Maharashtra and some districts of Madhya Pradesh. It also noted that several MFI players reported over 98% collection efficiencies for the loans disbursed after January 2017, consequently, fresh slippage of loans has been arrested.

The CNX Nifty traded in a range of 10,270.85 and 10,195.25. There were 38 stocks in green as against 12 stocks in red on the index.

The top gainers on Nifty were HPCL up by 3.72%, ITC up by 3.61%, Indian Oil Corporation up by 3.58%, BPCL up by 3.02% and Sun Pharma up by 2.67%. On the flip side, Bharti Infratel down by 2.28%, GAIL India down by 1.74%, Zee Entertainment down by 1.54%, Reliance Industries down by 1.10% and SBI down by 1.01% were the top losers.

The European markets were trading in green; UK’s FTSE 100 rose 21.86 points or 0.3% to 7,342.61, France’s CAC increased 37.41 points or 0.69% to 5,421.27 and Germany’s DAX was up by 171.77 points or 1.32% to 13,216.92.

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.