Benchmarks bid adieu to the year 2017 on optimistic note

Indian equity benchmarks ended the final session of Calendar Year (CY) 2017 on strong note and frontline gauges settled at all time closing high levels, surpassing their crucial 10,500 (Nifty) and 34,000 (Sensex) levels. The markets’ mood remained up-beat throughout the day and benchmarks, after a positive start, fervently gained from strength to strength to end near all time high levels, as investors continued hunt for fundamentally strong stocks. Traders remained encouraged with Securities and Exchange Board of India’s (SEBI) decision to relax entry norms for Foreign Portfolio Investors (FPIs) willing to invest in the Indian markets. Besides, the markets regulator would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform. Some support also came with Union Minister Nitin Gadkari’s statement that the government is working on a policy to bring down the annual oil import bill by $100 billion by 2030 through extensive use of methanol in cooking gas and transportation fuel. The minster added that the government is shortly going to implement a scheme under which 15 percent methanol will be blended with petrol and which will reduce the cost of the fuel by 10 percent.

Traders shrugged off study report of the industry body Assocham, which has said that a slowdown in the economy coupled with high stress level in the banking sector is expected to restrict credit growth at around 8 percent during the current fiscal despite government’s thrust on loan expansion. Traders also ignored rating agency ICRA’s statement that rising commodity prices, especially that of crude oil that has hit a three-year peak last week, will double current account deficit (CAD) to $39 billion or 1.5 percent of GDP this fiscal year. Market participants also paid no heed towards Finance minister Arun Jaitley’s statement that the direct tax collection stood at Rs 6.48 lakh crore up to December 18, which is below the Budget estimates of Rs 9.8 lakh crore. Indirect tax collection (excluding GST collection) was at Rs 3.66 crore and the same including GST collection at Rs 7.3 lakh crore, which is below the Budget estimates of Rs 9.27 lakh crore.

On the global front, European markets were trading mostly in red on the final trading day of the year, but were set to record their strongest year of gains since 2013 thanks to a surge among tech stocks and a robust resources sector. Asian markets ended mostly in green on Friday. Though, Japan’s Nikkei share average ended slightly lower, but the index still gained nearly 20 percent in 2017.

Back home, telecom stocks rang loud on the bourses, especially Anil Ambani's debt-laden Reliance Communications, as the company signed an agreement to sell its wireless assets to Reliance Jio Infocomm, the telecoms arm of elder brother Mukesh Ambani's Reliance Industries. Pharma stocks edged higher after credit rating agency, Crisil in its latest report has said that the sector would log in a 9% revenue growth over the next three years ending 2020. It said the industry is expected to witness better revenue growth in the near term with healthy cash flows, on the back of robust domestic demand and rising need for complex products in the West.

Finally, the BSE Sensex surged 208.80 points or 0.62% to 34,056.83, while the CNX Nifty was up by 52.80 points or 0.50% to 10,530.70.

The BSE Sensex touched a high and a low of 34,086.05 and 33,889.39, respectively and there were 24 stocks on gaining side as against 7 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.74%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Telecom up by 1.63%, Power up by 1.46%, TECK up by 1.24%, IT up by 1.20% and Auto was up by 1.16%, while Oil & Gas down by 0.46%, Metal down by 0.44%, Energy down by 0.30% and PSU was down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.06%, Axis Bank up by 2.74%, TCS up by 2.72%, Tata Motors - DVR up by 2.59% and Hero MotoCorp up by 2.38%. On the flip side, Dr. Reddy’s Lab down by 0.83%, Reliance Industries down by 0.36%, Tata Steel down by 0.30%, Bharti Airtel down by 0.20% and HDFC Bank down by 0.19% were the top losers.

Meanwhile, Road Transport and Highways Minister Nitin Gadkari has said that the government think-tank Niti Aayog  is working on a policy to bring down the annual oil import bill by $100 billion by the year 2030 through extensive use of methanol in cooking gas and transportation fuel. He also said that the government will be soon announcing a policy which calls for 15% blending of methanol in petrol and will also reduce the cost of the fuel by 10 percent. Besides, he noted that India is the world's third-largest oil importer and the government has been making efforts to bring down imports by using methanol as an alternative fuel.

Gadkari further said that the final roadmap for 'Methanol Economy' being worked out by NITI Aaayog is targeting an annual reduction of $100 billion by 2030 in crude imports in line with PM's vision. He said that to promote this renewable, alternate fuel, a 'Methanol Economy Fund' is also being contemplated. He stated that a cabinet note on methanol in inland waterways and marine sector and overall adaptation of Methanol Economy will be moved shortly. Besides, he said that use of methanol can result in great environmental benefits and its extensive use can reduce consumption of diesel by at least 20 percent in next 5-7 years. He noted that 20 percent blending of methanol with cooking fuel LPG will be low hanging fruit as it would result in immediate savings of Rs 6,000 crore a year.

Regarding the possible use of methanol in Railways, the minister said that it can result in 50 percent reduction in its diesel bills. He indicated that Indian Railways consumes about 3 billion litres of diesel every year, for which it has to foot a bill of over Rs 15,000 crore annually. Adding further, he said that India will convert about 50 vessels in the Port sector and various vessels owned by government entities to operate on methanol and added that the country has a huge potential of producing methanol. He also pointed out that the country needs around 2,900 crore litres of petrol and 9,000 crore litres of diesel per year with an import bill on account of crude oil standing at almost Rs 6 lakh crore, which the government wants to bring down.

The CNX Nifty traded in a range of 10,538.70 and 10,488.65. There were 32 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Tata Motors up by 3.01%, Bharti Infratel up by 2.99%, Axis Bank up by 2.90%, TCS up by 2.78% and Hero MotoCorp was up by 2.43%. On the flip side, GAIL India down by 2.01%, BPCL down by 1.65%, HPCL down by 0.86%, ZEE down by 0.78% and Indian Oil Corporation was down by 0.78% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 40.56 points or 0.31% to 12,939.38 and France’s CAC was down by 9.07 points or 0.17% to 5,330.35, while UK’s FTSE 100 was up by 21.02 points or 0.28% to 7,643.90.

Asian equity markets ended mostly in green on the final trading day of 2017 Friday after Wall Street finished with modest gains. Crude oil and copper prices stayed firm - the former still hovering at 30-month high - but equities never really find any great support in the final week of the year and stock price movements in most of the markets in Asia stayed sluggish. Chinese shares ended higher, capping a strong year of gains as domestic and global investors increased their exposure to mainland markets despite worries about a slowing economy and further regulatory crackdowns. However, Japan’s Nikkei share average ended slightly lower, but the index still gained nearly 20 percent in 2017.