Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended with gain of more than half a percent, with Sensex, Nifty and Nifty Midcap index ending at record closing high. The market breadth was in favour of advances with four stocks advancing against every three declining ones. The street is eyeing Union Budget announcements which will be next set of triggers for the markets. Budget session of parliament will begin on January 29 and Union Budget for 2018 will be presented on February 1, 2018. The equity benchmarks made a gap-up opening and traded at all time high levels in early deals. Sentiments remained up-beat with credit rating agency Fitch’s statement that India has the potential to grow at an average of 6.7% per annum over the next five years and will be the fastest growing large economies. It added that even though this rate of growth is lower than the potential and what policymakers have been aspiring for, it is ahead of the 5.5% growth estimated for China and Indonesia, who are joined at the second fastest rank. 

Some support also came with Finance Minister Arun Jaitley’s assurance that the positive impact of the government’s reform measures would get reflected in the medium to long term and noted that India is the only economy which could maintain a growth rate of 7-8 per cent amid challenges like the country’s weak public sector banks (PSBs) and initial disturbance of demonetisation, Goods and Services Tax (GST). Meanwhile, investors also took note of report that with four months left to implement reforms to make doing business easier, India is targeting 90 measures including quicker construction permits, simpler registration of new companies and Aadhaar-based identification of directors to achieve a higher ranking in the World Bank’s annual listing.

On the global front, Asian markets closed mostly in green, as US jobs data pointed to firm economic growth although the greenback was soft as the specter of benign inflation capped domestic bond yields. Japanese Economy Minister Toshimitsu Motegi said that the government had put policies in place needed for companies to raise wages. Motegi added that he is confident that the government’s plan to offer tax breaks would encourage companies to raise wages at annual negotiations with labor unions this spring. The European markets were trading in green with the British and Swiss benchmarks hitting records, propelled by optimism for a strengthening regional economy.

Back home, mixed reaction was seen in pharma sector stocks with a private report stating that the Indian pharma sector’s December quarter revenue is estimated to remain flat, while profits are likely to slip owing to decline in US businesses and a sharp appreciation in rupee. 

The BSE Sensex ended at 34176.90, up by 207.26 points or 0.61% after trading in a range of 34020.84 and 34177.95. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.67%, while Small cap index was up by 0.92%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.46%, Consumer Durables up by 1.24%, Consumer Disc up by 0.89%, TECK up by 0.83% and Basic Materials up by 0.73%, while Oil & Gas down by 0.42%, PSU down by 0.19% and Energy down by 0.02% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 4.94%, Adani Ports & Special Economic Zone up by 3.58%, IndusInd Bank up by 3.26%, Bharti Airtel up by 3.17% and Dr. Reddy’s Lab up by 2.43%. (Provisional)

On the flip side, ONGC down by 1.13%, Wipro down by 1.00%, Tata Motors - DVR down by 0.65%, SBI down by 0.52% and Sun Pharma down by 0.49% were the top losers. (Provisional)

Meanwhile, few days after admitting that the Indian economy slowed down in 2016-17, Finance Minister Arun Jaitley has assured that the positive impact of the government’s reform measures would get reflected in the medium to long term and noted that India is the only economy which could maintain a growth rate of 7-8 per cent amid challenges like the country’s weak public sector banks (PSBs) and initial disturbance of demonetisation, Goods and Services Tax (GST).

Finance Minister further listing the various reform measures like GST rollout, demonetisation, containing of inflation and recapitalisation of public sector banks, said that the coming generations will remember the government for creating this new economic history. Jaitley also pointed that structural reforms have a price and the government has also paid price in the short term but the price bottoms out itself and then the curve begins to move up and the signs of that are beginning to come.

On the benefits of reforms measures, Arun Jaitley said that though the country faced some initial issues with GST regime, it is beneficial in the medium and long term and is also brining more tax revenue compared to the past years.  Finance Minister also mentioned the government’s continuous efforts to improve health of PSU lenders, with its huge recapitalisation plan of over Rs 2.12 lakh crore.

The CNX Nifty ended at 10561.35, up by 56.55 points or 0.54% after trading in a range of 10520.10 and 10566.10. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 4.84%, Bajaj Finance up by 3.65%, Adani Ports & Special Economic Zone up by 3.28%, Bharti Airtel up by 3.23% and IndusInd Bank up by 3.22%. (Provisional)

On the flip side, Bharti Infratel down by 1.77%, Hindalco down by 1.52%, UPL down by 1.06%, HPCL down by 0.92% and ONGC down by 0.88% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 16.19 points or 0.21% to 7,712.07, Germany’s DAX increased 131.33 points or 1% to 13,299.22 and France’s CAC increased 39.85 points or 0.74% to 5,453.54.

Asian equity markets ended mostly in green on Friday even as regional gains remained modest ahead of the release of the closely-watched US jobs report for December, due later in the day. The jobs report is expected to show an increase of about 190,000 jobs in December after an addition of 228,000 jobs in November. The unemployment rate is expected to hold at 4.1 percent. Japanese shares extended gains from the previous session to probe 26-year highs as the yen held broadly lower on improved risk appetite. Further, Chinese shares ended higher on growth optimism. China’s services sector activity expanded in December on solid growth in new business, with the outlook improving to a six-month high, a private sector survey showed on Thursday. Another private business survey showed growth in China’s manufacturing sector unexpectedly rose to a four-month high in December thanks to a surge in new orders.