Bulls take control over Dalal Street; Nifty surpasses 10,600 mark

Bulls tightened their grip on Dalal Street and key gauges traded jubilantly throughout the session with Sensex and Nifty surpassing their crucial 34,300 and 10,600 levels, hitting fresh record highs, respectively. After making a gap-up start, Indian equity benchmarks traded with traction to end at fresh closing high levels, as traders took some encouragement with report that credit growth after a long gap grew in double digits to 10.65% at Rs 80,96,727 crore in the fortnight ended December 22, 2017 due to the base effect. Sentiments also remained up-beat from Economic Advisory Council to the Prime Minister (EAC-PM), Bibek Debroy’s statement that India's advance GDP growth estimate of 6.5% for this fiscal shows reform measures taken by the government is yielding results and growth will accelerate to over 7% in 2018-19.

Besides, report that overseas investors poured in a staggering Rs 1.5 lakh crore in the Indian debt markets in 2017 on the back of higher bond yields and stable currency, after pulling out massive funds in the preceding year, too aided sentiments. Traders completely ignored Central Statistics Office’s (CSO) first advance estimates of GDP growth for current financial year which highlighted that the Indian economy is expected to grow at a slower 6.5% in 2017-18 compared to the 7.1% in 2016-17. According to CSO, the Gross Domestic Product (GDP) at constant (2011-12) prices for 2017-18 is likely to attain a level of Rs 129.85 lakh crore. Meanwhile, the agriculture ministry said that the country’s agriculture sector is expected to grow higher than projected 2.1% growth by the CSO for the current fiscal, following better rabi crop prospects. The ministry added that the agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released.

Firm opening in European markets too aided sentiments. Retail sales in the euro zone rose more than expected in November. In a report, Eurostat said that euro zone retail sales rose to 1.5% in November from a negative 1.1% in the preceding month. Asian markets rallied on Monday after Wall Street boasted its best start to a year in over a decade.

Back home, aviation stocks exhibited mixed performance, as the government said that if capping of airfares get implemented it would result in increased cost of air travel for 99% of the passengers. Telecom stocks Bharti Airtel, Idea Cellular and Reliance Communications ended in red after Reliance Jio Infocomm (Jio) unleashed another price disruption in an heavily debt-riddled industry, wherein all existing tariff plans with 1GB data have been revised to offer either 50% more data or a Rs 50 discount, a move which could hit the average revenue per user of rivals such as Bharti Airtel, Vodafone India and Idea Cellular.

Finally, the BSE Sensex surged 198.94 points or 0.58% to 34,352.79, while the CNX Nifty was up by 64.75 points or 0.61% to 10,623.60.

The BSE Sensex touched a high and a low of 34,385.67 and 34,216.33, respectively and there were 23 stocks on gaining side as against 8 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 0.98%, while Small cap index was up by 0.97%.

The top gaining sectoral indices on the BSE were IT up by 1.40%, Capital Goods up by 1.22%, Healthcare up by 1.20%, Realty up by 0.87% and Energy was up by 0.86%, while Telecom down by 2.64% was the lone losing index on BSE.

The top gainers on the Sensex were Coal India up by 3.26%, Infosys up by 2.33%, Sun Pharma up by 2.28%, Larsen & Toubro up by 1.80% and Hero MotoCorp up by 1.37%. On the flip side, Bharti Airtel down by 4.43%, ONGC down by 0.28%, SBI down by 0.18%, Tata Steel down by 0.18% and Adani Ports & SEZ down by 0.07% were the top losers.

Meanwhile, in major respite to companies facing corporate insolvency proceedings, the Central Board of Direct Taxes (CBDT) has relaxed norms for levy of Minimum Alternate Tax (MAT) from the current financial year 2017-18. At present, under section 115JB of the Income-Tax Act, 1961, MAT is levied on book profit after deducting the amount of loss brought forward or unabsorbed depreciation, whichever is less.

The Income Tax Department has noted that with effect from assessment year 2018-19 (FY2017-18), in case of a company, against whom an application for corporate insolvency resolution process (CIRP) has been admitted by the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC), 2016, the amount of total loss brought forward (including unabsorbed depreciation) shall be allowed to be reduced from the book profit for the purposes of levy of MAT under section 115JB of the Act. It pointed out that this decision has been taken to minimise the genuine hardships faced by such companies.

The CBDT further said that lenders of those companies, which have defaulted on loans, have been approaching the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. It also said that appropriate legislative amendment in this regard will be made in due course and noted that the changes are likely to be brought in as part of the Finance Bill in the upcoming Budget to be presented on February 01. Besides, the number of cases being filed for CIRP under the IBC, has been rising. The RBI data indicated that as on November 2017, over 4,300 applications under CIRP were filed in the various benches of the NCLT.
The CNX Nifty traded in a range of 10,631.20 and 10,588.55. There were 37 stocks in green as against 13 stocks in red on the index.

The top gainers on Nifty were Coal India up by 3.16%, Lupin up by 2.48%, Infosys up by 2.29%, Sun Pharma up by 2.20% and Indiabulls Housing Finance up by 2.02%. On the flip side, Bharti Airtel down by 4.38%, ONGC down by 0.53%, HCL Tech down by 0.35%, Tata Steel down by 0.27% and Asian Paints down by 0.25% were the top losers.

The European markets were trading in green; UK’s FTSE 100 rose 0.39 points or 0.01% to 7,724.61, France’s CAC gained 18.58 points or 0.34% to 5,489.33 and Germany’s DAX was up by 48.47 points or 0.36% to 13,368.11.

Asian equity markets ended in green on Monday even as trading volumes remained thin amid the ‘Coming of Age’ holiday in Japan. Global growth optimism underpinned sentiments as investors looked ahead to a slew of regional earnings later this week for directional cues. The dollar held steady above a recent 3-1/2-month low against a basket of currencies after US job growth fell well short of estimates in December, but a pick-up in monthly wage gains pointed to labor market strength, paving the way for more rate hikes in 2018. Chinese shares extended gains for the seventh straight session after the city of Lanzhou eased property curbs.