Markets hit all time closing high levels; Sensex surpasses 33,800 mark

Extending northward journey for fourth straight session, Indian equity benchmarks ended the Tuesday’s trade at all time closing high levels, with frontline gauges recapturing their crucial 33,800 (Sensex) and 10,450 (Nifty) levels. Markets started the session on optimistic note with traders continued getting strength with the assembly election results announced yesterday. Blue chips soared during the trade after victory of Bharatiya Janata Party (BJP) in his home state of Gujarat and Himachal Pradesh, raising hopes of continued reforms. Traders also took encouragement with the private report highlighting brighter growth prospects for India by FY20 and beyond. India’s growth prospect is likely to see a slowdown in the next two years followed by recovery in the medium term, with 2019-20 GDP expected at around 7.6 per cent. Meanwhile, the government has sought Parliament’s approval to spend a net additional Rs 33,380 crore ($5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of Rs 21.4 lakh crore in the annual budget.

Markets extended its rally in last leg of trade to end near intraday highs after Finance Ministry in its year end review report stated that overall fundamentals of the economy remained strong in the current financial year, on the back of firm macroeconomic indicators, improvement in World Bank's ease of doing business ranking and sovereign rating upgrade by Moody’s. Market participants shrugged off report that the government seeking Parliament’s approval to spend a net additional Rs 333.8 billion ($ 5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of $ 334.9 billion in the annual Budget. Also, investors ignored India Ratings’ report where it has warned that the farm debt waivers announced by the five large states together will widen the combined fiscal deficit of the states by Rs 1,07,700 crore or 0.65 percent of GDP this financial year.

On the global front, European counters made a positive start, as investors remain focused on the progress of the proposed tax legislation in the US. The House of Representatives will vote on the most sweeping, pro-growth tax reform legislation later today, while the Senate vote is expected to follow short on the heels. Asian markets exhibited mixed trend on Tuesday, as investors remained optimistic about the outlook for Republican tax reform.

Back home, stocks of public sector banks remained on buyers’ radar on global rating agency Moody’s report that capital raising by a number of Public Sector Banks (PSBs), including PNB and UBI, is credit positive because it will help improve their loss-absorbing buffers. The pharma stocks remained buzzing, as the National drug pricing regulator NPPA has said it had notified prices of 65 essential formulations, including those used for the treatment of diabetes, infections, pain and high blood pressure. Sugar stocks remained in sweet spot on news that the government will scrap the stockholding limit on sugar traders. The stockholding limit currently on the traders is about 500 tonnes of sugar that he can keep on a maximum limit. Stocks related to tourism and hotel space remained in focus, as the Union Tourism Minister K J Alphons has said that there was no adverse impact of the Goods and Services Tax (GST) rollout on foreign tourist arrivals (FTAs) in the country.

Finally, the BSE Sensex soared 235.06 points or 0.70% to 33,836.74, while the CNX Nifty was up by 74.45 points or 0.72% to 10,463.20.

The BSE Sensex touched a high and a low of 33,862.07 and 33,666.62, respectively and there were 22 stocks on gaining side as against 9 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.47%, while Small cap index was up by 1.51%.

The top gaining sectoral indices on the BSE were Auto up by 3.42%, Consumer Discretionary Goods & Services up by 2.36%, Telecom up by 1.96%, Consumer Durables up by 1.81% and Industrials was up by 1.60%, while IT down by 0.46% and TECK was down by 0.06% were the only losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 5.33%, Hero MotoCorp up by 4.70%, Tata Motors up by 3.39%, Bajaj Auto up by 2.87% and Tata Motors - DVR up by 2.81%. On the flip side, Wipro down by 1.07%, Infosys down by 1.04%, Indusind Bank down by 0.58%, HDFC down by 0.49% and Kotak Mahindra Bank down by 0.35% were the top losers.

Meanwhile, a Joint study carried out by the industry body Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG has found out that the healthcare insurance industry in India needs to develop infrastructure along with delivering effective and affordable healthcare to the micro, small and medium enterprise (MSME) sector, which has a 117 million strong work force. It also elaborated that the country’s health insurance penetration is less than 30 percent of the population covered by any type of health insurance policy in India.

The study titled ‘MSME group health insurance penetration in India’ stated that MSMEs form larger part of the country’s unorganized sector, which leaves a majority of the sector's workforce without any social security. It noted that this section of the society along with their families needs to be brought in the fold of healthcare protection not only as a part of a social initiative but also as a lever for improving workforce productivity. Adding further, it said that providing healthcare coverage is also an important aspect of employee welfare and this remains underpenetrated among MSMEs. It also highlighted that around 90 percent MSMEs do not offer any financial aid for medical purposes to the families of employees and almost no micro and medium enterprises offer financial support to their employees and their families.

FICCI-KPMG study further said that MSMEs preferred a basic cover of personal accident and critical illness with a focus on a reduction in premiums and coverage of employees only and they primarily prefer to purchase insurance through broking channels and bancassurance, with group health insurance penetration through online channels at minimal level of about 6 percent. The report explained that reaching out to MSME for health insurance has remained a massive challenge for the industry owing to lack of data, diversity and unstructured framework of organization. It also indicated that customisation of group health insurance products, standard advisories and putting up a distributions channel has been some of the many challenges that one has to face.

The CNX Nifty traded in a range of 10,472.20 and 10,406.00. There were 39 stocks in green as against 11 stocks in red on the index.

The top gainers on Nifty were Maruti Suzuki up by 5.77%, Hero MotoCorp up by 4.79%, UPL up by 3.94%, Tata Motors up by 3.63% and Eicher Motors up by 3.21%. On the flip side, HCL Tech down by 1.47%, Infosys down by 0.98%, HDFC down by 0.65%, HPCL down by 0.38% and Sun Pharma down by 0.34% were the top losers.

The European markets were trading mostly in green; UK’s FTSE 100 increased 18.44 points or 0.24% to 7,555.45, Germany’s DAX increased 5.43 points or 0.04% to 13,317.73, while France’s CAC decreased 1.76 points or 0.03% to 5,418.82.

Asian equity markets made a mixed closing on Tuesday as investors remained optimistic about the outlook for Republican tax reform and the World Bank raised its forecast for China's growth in 2017, citing rising household incomes and a recovery in global trade. The US House of Representatives is scheduled to vote on the tax bill later in the day, while a vote in the Senate is expected to follow shortly on the heels. Chinese shares ended higher, reflecting gains in other regional markets and overnight gains on Wall Street. Meanwhile, Japanese shares edged lower amid profit taking as the year-end holiday season approaches.