Benchmarks hit record closing high levels; Sensex surpasses 34,500 mark

Indian equity benchmarks ended the Thursday’s trade at record closing high levels, with frontline gauges surpassing their crucial 34,500 (Sensex) and 10,650 (Nifty) levels for the first time ever, as investors remained optimistic ahead of key corporate earnings later this week and the federal budget next month. Though, markets made cautious start and traded choppy in first half of the trade, as sentiments remained downbeat with rating agency Care Ratings’ latest report that uptrend in crude oil price is likely to have a major impact on India's fiscal position. Sentiments also remained dampened after a private poll showed that India’s retail inflation likely rose to a 17-month high in December, and that could push the central bank to tighten monetary policy. The December inflation data is due to be released on Friday, January 12. Traders also took note of a report which highlights that the Confederation of All India Traders’ (CAIT) has opposed Centre’s decision to allow 100% FDI in single brand retail via automatic route. CAIT has said that it is serious matter for small businesses and will hamper the welfare, upgradation and modernisation of existing retail trade.

Domestic bourses gained momentum in second half of the trade and hit their all time high levels with traders taking some support from global rating agency Moody’s latest report, which has said India and China remain the fastest growth economies in Asia Pacific region. Besides, the cabinet’s decision to allow foreign airlines to invest up to 49% in ailing Air India, and ease foreign direct investment (FDI) policies in some critical areas, including single-brand retail, broking services in construction, pharmaceuticals and power exchanges, too provided some strength to the markets. Market participants also took some encouragement with Credit ratings agency, Crisil Ratings in its latest report stating that India Inc’s top-line (revenue) growth is likely to hit a five-year high of 9% in Q3 (October-December) 2017-18. However, it noted that profits will continue to contract, on the back of rising commodity prices.

On the global front, European markets were trading mostly in red in early deals, as concerns over protectionism and a bond market sell-off made the breakneck New Year rally in equities fizzle out. Asian markets ended mostly in red on report that that China may slow or halt purchases of US Treasuries.

Back home, stocks from real estate counters remained on buyers’ radar on private report that residential real estate market is slowly coming out of the shadow of demonetization woes as housing sales across top eight property markets for the quarter ended December have risen 28% from a year ago to 51,701 apartments. While this is an uptick compared to a lower base recorded during the demonetization quarter, the performance was also helped by the implementation of RERA and effective 10-15% price correction across key markets. Agri related stocks remained in focus, as the economists during an interactive session with Prime Minister Narendra Modi, organised by NITI Aayog suggested need to shift focus to increasing farmers’ income rather than increasing just production.

Finally, the BSE Sensex gained 70.42 points or 0.20% to 34,503.49, while the CNX Nifty was up by 19.00 points or 0.18% to 10,651.20.

The BSE Sensex touched a high and a low of 34,558.88 and 34,400.61, respectively and there were 17 stocks on gaining side as against 14 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 2.00%, IT up by 0.84%, TECK up by 0.73%, Telecom up by 0.55% and FMCG was up by 0.39%, while Energy down by 0.30%, Oil & Gas down by 0.29%, Consumer Durables down by 0.26%, Capital Goods down by 0.16% and PSU was down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.28%, Bharti Airtel up by 1.66%, Kotak Mahindra Bank up by 1.61%, HDFC up by 0.99% and Asian Paints up by 0.97%. On the flip side, Indusind Bank down by 2.08%, Wipro down by 1.53%, ICICI Bank down by 0.82%, Axis Bank down by 0.76% and Hero MotoCorp down by 0.70% were the top losers.

Meanwhile, in order to double farmer's income, the Crop Care Federation of India (CCFI) president Rajju Shroff has said that India needs to push its agricultural exports to $120 billion by the year 2022 from the present $36 billion. Globally, the country ranks second in agriculture production but it ranks eighth in exports, well behind Thailand and Indonesia. Besides, he stated that they have urged the government to increase focus on trebling India's share in agriculture exports to double farmer’s income by 2022.

Shroff has said that over the past few months, they have appealed to the agriculture ministry, commerce ministry and institutions like APEDA, NITI Aayog to arrest the steady decline in India's agriculture exports and the sharp increase in imports. He also said that domestic agricultural commodities face stiff non-tariff barriers in many developed countries that either refuse or restrict their agriculture exports. He also wrote off farm loans and increasing Minimum Support Prices (MSP) as not sustainable.

CCFI president further said that they urgently need to create a single authority to monitor agricultural exports and imports keeping a hawk eye on both. Currently, they have multiple authorities with poor co-ordination and dismal results. He pointed out that foreign-funded environmental activists pose the single biggest threat to the progress of Indian agriculture. He added that a spurt in India's agricultural exports can boost rural employment, income and purchasing power. That apart, he believes that it will also spruce up allied activities in storage, transportation and processing.

The CNX Nifty traded in a range of 10,664.60 and 10,612.35. There were 24 stocks in green as against 26 stocks in red on the index.

The top gainers on Nifty were Infosys up by 2.30%, Indiabulls Housing Finance up by 1.98%, Bharti Airtel up by 1.88%, Kotak Mahindra Bank up by 1.55% and Eicher Motors up by 1.43%. On the flip side, Wipro down by 2.04%, Indusind Bank down by 1.93%, Ambuja Cement down by 1.52%, Cipla down by 1.24% and Bajaj Finance down by 1.18% were the top losers.

European markets were trading mostly in red; Germany’s DAX decreased 26.5 points or 0.2% to 13,254.84 and France’s CAC was down by 2.09 points or 0.04% to 5,502.59, while UK’s FTSE 100 was up by 2.14 points or 0.03% to 7,750.65.

Asian equity markets ended mostly in red on Thursday after Wall Street experienced its first loss-making session this year overnight, hit by reports that China may slow or halt purchases of US Treasuries and that President Donald Trump may pull the US out of the North American Free Trade Agreement. Chinese Premier Li Keqiang reportedly said the economy expanded around 6.9 percent in 2017. The economic situation is ‘better than expected’, Li said in a forum in Cambodia. The National Bureau of Statistics is scheduled to issue annual GDP data on January 18. Japanese shares ended lower, hit by declines in automakers and electronic component makers as the strong yen soured investors’ appetite. Meanwhile, China stocks were little changed, with the benchmark index up for a 10th successive session even as investors took profit in consumer and energy firms after a recent robust rally.