Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended in green taking cues from exit polls which predicted a victory for the ruling BJP in Gujarat. Nifty ended near two week high but failed to hold 10,350 mark. The market breadth was in favour of advances with two stocks advancing against each declining one. Oil markets were stable as the Forties pipeline outage in the North Sea and the ongoing OPEC-led production cuts supported prices, while rising output from the United States kept crude from rising further. The benchmarks made a gap-up opening and traded jubilantly with frontline gauges recapturing their crucial 33,500 (Sensex) and 10,350 (Nifty) levels in early deals. Sentiments remained upbeat with exit polls indicating both Himachal Pradesh and Gujarat going in favour of ruling BJP. Exit polls conducted by various polling agencies for news channels have predicted that BJP would retain Gujarat with a reduced margin of seats in the 182-member assembly, though one of them predicted a sweep. Some support also came with global rating agency Moody’s statement that it has a stable outlook for non-financial corporate in the country, except for telcos, on which it has a negative outlook for 2018. It said that stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes. Separately, Finance minister Arun Jaitley identified infrastructure creation, resolution of non-performing assets and recapitalization of banks as the priority areas to push the country further on growth path.

Investors took note of a private report which enlightened that India’s economic growth has bottomed out and the GDP growth will recover further to 7% over the next few quarters but it is likely to take few years to return to 7.5% above levels. The report showed that the worst is over for India’s GDP growth, while forecasting a growth rate of 6.5% for the current fiscal and 7.2% in the year thereafter. Meanwhile, the International Monetary Fund (IMF), which is slated to come out with an update of its projections of India’s growth rate along with the rest of the world in January, sees benefits in the medium-term from the demonetization exercise which India carried out about a year ago. IMF enlightened that in the medium term, demonetization could have possible effects, including through greater formalization of and the information on economic activities and a more efficient payment system with a greater use of the banking system and digital payments.

On the global front, Asian markets closed mostly in red. Japanese business confidence improved for a fifth straight quarter in the three months to December to hit an 11-year high, a central bank survey showed, a sign the economy is gathering momentum from robust exports and booming corporate profits. The European markets were trading in red as fresh concerns over US tax reform plans dampened market sentiment and as investors were still digesting the European Central Bank’s latest policy decision. The European Central Bank yesterday kept monetary policy on hold and revised up its forecast for growth and inflation, but added that underlying inflation remains subdued.

The BSE Sensex ended at 33422.80, up by 176.10 points or 0.53% after trading in a range of 33409.97 and 33621.96. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.95%, while Small cap index was up by 1.32%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.91%, Realty up by 2.10%, Consumer Durables up by 1.71%, Basic Materials up by 1.45% and Consumer Disc up by 1.37%, while Telecom down by 0.65% was the sole losing index on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 3.54%, Coal India up by 2.87%, Dr. Reddy’s Lab up by 2.81%, HDFC Bank up by 1.79% and Adani Ports & Special Economic Zone up by 1.66%. (Provisional)

On the flip side, Cipla down by 2.76%, ONGC down by 0.81%, TCS down by 0.67%, Bharti Airtel down by 0.67% and SBI down by 0.54% were the top losers. (Provisional)

Meanwhile, after implementation of various reform measures like Goods and Services Tax (GST), note ban and the bankruptcy code, the strengthening of public sector banks (PSBs), infrastructure and housing are going to be the top priorities for government next year.

Finance Minister Arun Jaitley emphasized the need to continue the momentum on infrastructure creation and expedite investment in railways to propel the Indian economy, including on stations, quality of trains and proposed bullet train, as they are core factors to India’s future growth story.

Finance Minister also outlined need to complete the task of strengthening the PSBs to improve their lending capacity and added that this will support growth and help the economy to become formal. He noted that banks have a lot of money lying with them but their lending capacity is limited due to lack of capital adequacy. Jaitley also mentioned that housing in rural areas by 2022 is going to be top agenda along with these two areas.

The CNX Nifty ended at 10328.60, up by 76.50 points or 0.75% after trading in a range of 10319.65 and 10373.10. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 5.03%, Yes Bank up by 4.01%, Mahindra & Mahindra up by 3.59%, Coal India up by 3.18% and Hindalco up by 2.83%. (Provisional)

On the flip side, Tech Mahindra down by 3.50%, Cipla down by 2.58%, Bosch down by 0.98%, Bharti Infratel down by 0.67% and ONGC down by 0.65% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 0.71 points or 0.01% to 7,447.41, Germany’s DAX decreased 52.96 points or 0.41% to 13,015.12 and France’s CAC decreased 17.76 points or 0.33% to 5,339.38.

Asian equity markets ended mostly in red on Friday as uncertainty over US tax reform legislation outweighed upbeat data from Japan. Japanese shares ended lower on Friday, with mobile firms extending a sell-off on concerns of increased competition after e-commerce group Rakuten said it aims to become the country’s fourth wireless carrier. Further, Chinese shares fell as investors responded to China’s hike in market interest rates by taking profits in sectors that have had robust gains this year.