Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended the session with gains of more than half a percent. Christmas cheer flushed on Dalal street with Sensex and Nifty touching fresh all time high. The Santa Claus rally in last hour of trade pulled markets higher with Nifty touching 10,500 mark for the first time. The market breadth was in favour of advances with three stocks advancing against every two declining ones. The street is expecting the elusive earnings growth to materialize during 2018. The market-men expect that as promised in the previous Budgets, corporate tax rates are expected to come down on competitive pressure from global economies who have already reduced the tax rate which is closer to 20%. The markets will remain closed on Monday on occasion of Christmas holiday.

The equity benchmarks made an optimistic start and traded in fine fettle in early deals tracking positive global cues. Sentiments remained up-beat with Reserve Bank of India in its latest edition of the Financial Stability Report enlightened that while the stress in the banking sector remains elevated, it appears to be bottoming out. Some support also came with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $ 10 trillion by 2035-40. He said that India will be remarkably different country as the size of its economy will enhance the country's role in global affairs. Separately, backed by improvement in major indicators, such as auto production, coal output and rail freight growth, credit rating agency, ICRA in its monthly review on Indian Economy, has said that the growth in the index of industrial production (IIP) is expected to rebound in November after hitting a three-month low of 2.2% in October this year.

Meanwhile, the street shrugged off the IMF’s report that India’s financial sector is facing considerable challenges with high non-performing assets and slow deleveraging and repair of corporate balance sheets testing the resilience of the banking system and holding back growth. Investors took note of Finance minister Arun Jaitley’s statement that depositors’ money in public sector banks will be protected and there is no need to create any fear psychosis, as he hit out at the previous UPA government for non-performing loans. Jaitley added that 7-8% growth has become the new normal for the country and the recent decline in growth was due to the structural reforms by the government. Meanwhile, CRISIL report highlighted that warehousing cost for consumer durables and FMCG is likely to reduce by 25-50% mainly on the back of the implementation of the Goods and Services Tax (GST) regime even as states like Haryana and Assam are set to emerge as new hubs. Consequently, the number of warehouses for consumer durables company could reduce to 10-12 from a typical 25-30 and to 30-35 from 45-50 for FMCG companies.

On the global front, Asian markets closed mostly in green. Japanese Prime Minister Shinzo Abe’s cabinet endorsed a record $860 billion budget for fiscal 2018, opting to keep the economy on a sustained recovery with aggressive monetary stimulus and putting fiscal reforms on the back burner again. The European markets were trading in red as fresh political turmoil in Spain dampened markets’ sentiments and as trading volumes were expected to remain thin ahead of the Christmas holiday. Markets were jittery after a Catalan vote on Thursday resulted in a victory for separatists, sparking fresh concerns over political turmoil in Spain. Catalan leader Carles Puigdemont said that the win was a victory of the Catalan republic over the Spanish state.

The BSE Sensex ended at 33934.29, up by 178.01 points or 0.53% after trading in a range of 33767.73 and 33964.28. There were 20 stocks advancing against 10 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.07%, while Small cap index was up by 0.52%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.24%, TECK up by 0.96%, Capital Goods up by 0.94%, Industrials up by 0.77% and Utilities up by 0.73%, while Consumer Durables down by 0.57%, Metal down by 0.08% and Realty down by 0.07% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 2.93%, Infosys up by 1.80%, TCS up by 1.68%, Bajaj Auto up by 1.58% and Wipro up by 1.46%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 0.88%, Tata Steel down by 0.75%, Coal India down by 0.73%, IndusInd Bank down by 0.69% and Hero MotoCorp down by 0.66% were the top losers. (Provisional)

Meanwhile, backed by improvement in major indicators, such as auto production, coal output and rail freight growth, credit rating agency, ICRA in its monthly review on Indian Economy, has said that the growth in the index of industrial production (IIP) is expected to rebound in November after hitting a three-month low of 2.2% in October this year.

The ratings agency’s monthly review which is based on analysis of 16 volume-based indicators said that they all have recorded a year-on-year (Y-o-Y) expansion in November 2017. Out of 16, 10 indicators improved sequentially in November 2017, while several of the remaining indicators displayed a base effect-led moderation in the pace of Y-o-Y growth. As per report, auto production surged to a 38-month high of 19.0% in November 2017 from 2.2% in October 2017, on the back of improved growth rate of two wheelers, passenger vehicles (PV) and commercial vehicles (CV) industry.

The report found that hydro electricity generation and rail freight grew to 9.6% and 3.1% in November, as against October’s figures of 3.7% and 2.6, respectively. Following the same trend, non-oil merchandise exports came out of negative zone, by rising to +28.2% in November  from -3.3% in previous month, while growth in cargo handled at major ports rose to 4.8% from 3.4%. However, the report noted slowdown in the growth of coal output, thermal electricity generation, domestic airlines passengers, bank deposits, petrol consumption and in ATF consumption.

The CNX Nifty ended at 10495.35, up by 55.05 points or 0.53% after trading in a range of 10448.25 and 10501.10. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 3.01%, Hindalco up by 2.16%, TCS up by 1.89%, Bajaj Finance up by 1.76% and Infosys up by 1.76%. (Provisional)

On the flip side, Lupin down by 1.09%, Ultratech Cement down by 1.02%, Dr. Reddy’s Lab down by 0.80%, Coal India down by 0.73% and Tata Steel down by 0.64% were the top losers. (Provisional)

The European markets were trading in red; Germany’s DAX decreased 25.35 points or 0.19% to 13,084.39 and France’s CAC decreased 7.79 points or 0.14% to 5,378.18.

Asian equity markets ended mostly in green on Friday, although trading volumes remained thin ahead of the Christmas weekend. Underlying sentiments remained supported by higher commodity prices, encouraging economic reports from the US and passage of the landmark tax reform bill. Investors shrugged off the news that voters in Catalonia favored separatists wanting to break away from Spain. Japanese shares closed slightly higher in quiet pre-holiday trade after the US House of Representatives gave final approval to the biggest US tax overhaul in 30 years. Though, Chinese shares ended lower, dragged down by financial and consumer staple stocks.