Benchmarks hit new record closing highs; Sensex surpasses 34,000 mark

Bulls which woke up in last leg of trade mainly helped the benchmarks to end at fresh all time closing highs levels on Tuesday, with frontline gauges ending above their crucial 34,000 (Sensex) and 10,500 (Nifty) marks for the first time ever amid thin volume as most traders are away on year-end holiday. The market’s rally was mainly led by ADAG group’s stocks which surged after Anil Ambani’s announcement that the debt-ridden company has achieved full resolution and is expected to reduce its debt of Rs 45,000 crore to Rs 6,000 crore. Earlier, markets after a positive start turned choppy and traded near neutral lines for most part of the day’s trade. Sentiments remained dampened with report that the overseas investors have pulled out a massive Rs 7,300 crore from the country’s stock markets this month so far, primarily due to rising crude prices and widening fiscal deficit. Investors took note that firming crude oil prices in the global market is likely to cast its shadow on retail inflation, which has began to move northwards after hitting a low of 1.46 percent in June, and may prompt the RBI to hold interest rates at least for some time in 2018.

However, markets took U-turn and entered into green terrain in last leg of trade with traders turning optimistic on hopes of revival in quarterly earnings and a favourable Budget. Reports that India looks set to leapfrog Britain and France next year to become the world's fifth-largest economy in dollar terms, too aided sentiments. Traders also took some encouragement with industry body Assocham’s Year-Ahead Outlook report, which has said that India's economic growth may touch 7 percent next year as the government’s policies tilt towards the country’s stress-ridden rural landscape in the penultimate year before the 2019 general elections. It said that against GDP growth of 6.3 percent in the second quarter of 2017-18, the economic expansion may reach the crucial 7 percent mark by the end of September 2018 quarter, while inflation may range between 4 to 5.5 percent towards the second half of the next calendar year with the monsoon being a key imponderable. Some support also came from a private report stating that Indian economy is expected to witness sharp recovery in the January-March quarter and its GDP growth likely to be around 7.5 percent for 2018.

On the global front, Asian markets exhibited mixed trend in a holiday-truncated week as investors remained on the sidelines in the absence of fresh cues. The European markets were closed on account of National holiday.

Back home, shares of Anil Dhirubhai Ambani Group (ADAG) - Reliance Communications, Reliance Infrastructure, Reliance Capital, Reliance Power, Reliance Naval and Engineering, Reliance Home Finance and Reliance Nippon Life Asset Management closed on firm note on back of announcements related to debt reduction issues. However, public sector banking stocks remained under pressure, as according to the Reserve Bank of India (RBI) data, the bad loans problem of public sector banks (PSBs) has once again taken the centre stage, despite the government’s various efforts NPAs of PSBs reached to Rs 7,33,974 crore as of September, 2017, mainly due to corporate defaulters.

Finally, the BSE Sensex surged 70.31 points or 0.21% to 34,010.61, while the CNX Nifty was up by 38.50 points or 0.37% to 10,531.50.

The BSE Sensex touched a high and a low of 34,061.88 and 33,889.75, 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 jumped 0.76%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Telecom up by 2.28%, Realty up by 1.51%, Metal up by 1.23%, Basic Materials up by 0.92% and Healthcare was up by 0.86%, while PSU down by 0.02% was the sole losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.59%, Sun Pharma up by 1.88%, Yes Bank up by 1.74%, Tata Steel up by 1.52% and Bajaj Auto up by 1.22%. On the flip side, NTPC down by 1.14%, SBI down by 0.94%, Coal India down by 0.88%, Mahindra & Mahindra down by 0.64% and HDFC Bank down by 0.62% were the top losers.

Meanwhile, with a view to protect domestic manufacturers, India has initiated a probe to determine imposition of safeguard duty on surging imports of solar cells. Domestic manufacturers have approached the Directorate General of Safeguards (DGS) with a complaint that their sales and market share has more or less remained constant in recent years, despite rapid expansion in demand for solar cells in India. The domestic players had a market share of 13% in 2014-15, which is estimated to fall to 7% during 2017-18. The domestic industry has also asked the DGS for imposition of provisional safeguard duty in view of steep deterioration in the performance of the local players as a result of increased imports of the solar cells.

Solar cells, electrical devices that convert sunlight directly into electricity, are imported primarily from China, Malaysia, Singapore and Taiwan. The petition for imposition of the import restrictive duty was submitted by Indian Solar Manufacturers Association (ISMA) on behalf of five Indian producers - Mundra Solar PV, Indosolar, Jupiter Solar Power, Websol Energy Systems and Helios Photo Voltaic. They want safeguard duty on ‘solar cells whether or not assembled in modules or panels’ immediately for four years. The DGS said the application has been examined and it has been found that prima facie the increased imports of the product have caused and are threatening to inflict serious injury on the domestic industry.

Imports of solar cell are estimated to increase from 1,275 MW in 2014-15 to 9,331 MW at March-end 2017. The domestic production was 246 MW in 2014-15 and is likely to increase to 1,164 MW in 2017-18. Besides, the government is targeting 100 Giga Watt (GW) of solar power capacity by 2022. The current installed capacity is about 15 GW. The government would auction 20 GW capacities by March 2018, and it will auction 30 GW in next year and another 30 GW in the subsequent year.

The CNX Nifty traded in a range of 10,545.45 and 10,477.95. There were 32 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Bharti Airtel up by 3.06%, Ambuja Cement up by 2.20%, Cipla up by 1.94%, Bosch up by 1.87% and Vedanta up by 1.72%. On the flip side, Coal India down by 0.98%, SBI down by 0.89%, IOC down by 0.79%, NTPC down by 0.75% and Hindustan Unilever down by 0.63% were the top losers.

Asian equity markets ended mostly in red on Tuesday after a session of light, holiday-week trading in most markets. Japanese shares ended lower, confined in a tight range amid a paucity of catalysts from other markets, while gains in Takashimaya on upbeat earnings lifted retailers. Meanwhile, Chinese shares ended firmer, led by financial and real estate firms, though trading was thin as year-end nears. The markets in Hong Kong and Indonesia continue to remain closed for Christmas holidays.