Markets extend rally for second straight session

Extending northward journey for second straight session, Indian equity benchmarks once again hit all time high levels, with Nifty and Sensex ending just shy of their crucial 10,700 and 34,600 levels, respectively. Markets traded mostly in green during the session though some hiccups witnessed in noon deals but it proved short-lived and key gauges managed to end the session comfortably near their all time high levels. Markets started the day on an optimistic note, as traders remained hopeful ahead of Infosys earnings later today and budget next month. Investors also took some encouragement with Niti Aayog Vice Chairman Rajiv Kumar’s statement that economy is expected to clock growth of 7.5% in 2018. He further noted that as the economy picks up, employment will pick up. Sentiments also remained positive with US-India Strategic Partnership Forum’s (USISPF) report that India's decision to relax FDI norms in various sectors would make it a much more attractive destination for overseas investors. Some support also came with Farm Minister Radha Mohan Singh’s statement that India’s agriculture sector will expand more than 4% in 2017-18, trying to allay concerns raised by the statistical office’s projection of sluggish growth in one of the most important segments of the economy.

However, sharp sell-off witnessed in noon deals and markets entered into red terrain, as anxiety spread among the traders ahead of key economic data - industrial production (IIP) numbers for November and retail inflation for December - to be released later in the day. some concerns also came with India Ratings and Research’s latest report that private sector capital expenditure growth is expected to remain muted with slowing pace, for next two financial years on account of weak domestic consumption demand, global overcapacity and negative impact of Goods and Services Tax (GST) on working capital. Markets showed splendid recovery in last leg of trade and settled near fresh all time high levels as traders took some support from private report that economic indicators like PMIs, vehicle sales and steel demand suggest that growth momentum in India has gathered pace in December.

Firm opening in European counters too aided sentiments on signs of progress on the German political front and as traders focused on a fresh batch of corporate earnings reports. Asian markets ended mostly in green terrain on Friday with China reporting trade data for December with exports up 10.9%, compared to a gain of 9.1% seen, imports posted a 4.5% rise, compared to a 13.0% increase expected and the trade balance came in at $54.69 billion surplus, compared to surplus of $37 billion seen.

Back home, steel stocks remained on buyers’ radar, as the Union Steel Minister Birender Singh said that exports should account for 6-7 per cent of India’s total steel production in the next few years, up from the 1.5 per cent at present. However, telecom stocks remained under pressure on report that the telecom regulator may reduce international termination rate (ITR) - a charge paid by international operators to local networks that receive calls - by almost half from the current 53 paise a minute, a move that would deal a body blow to India’s top telcos which receive bulk of international calls.

Finally, the BSE Sensex gained 88.90 points or 0.26% to 34,592.39, while the CNX Nifty was up by 30.05 points or 0.28% to 10,681.25.

The BSE Sensex touched a high and a low of 34,638.42 and 34,342.16, respectively and there were 12 stocks on gaining side as against 19 stocks on losing side on the index.

The broader indices ended mixed; the BSE Mid cap index declined 0.17%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Energy up by 0.72%, Oil & Gas up by 0.69%, Bankex up by 0.50%, Capital Goods up by 0.48% and Metal was up by 0.45%, while Realty down by 1.46%, FMCG down by 0.52%, Power down by 0.47%, Healthcare down by 0.34% and Utilities was down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.63%, Maruti Suzuki up by 1.27%, ONGC up by 1.26%, Reliance Industries up by 1.02% and Dr. Reddy’s Lab up by 0.73%. On the flip side, Bharti Airtel down by 1.04%, ITC down by 0.89%, Power Grid Corporation down by 0.88%, Bajaj Auto down by 0.84% and Wipro down by 0.72% were the top losers.

Meanwhile, global aviation body, the International Air Transport Association (IATA) has stated that India has registered a growth of 16.4 percent in domestic air passenger traffic in the month of November 2017, topping the growth chart worldwide. It also indicated that the country continued to witness double-digit growth for the 39th consecutive month. Besides, it noted that the airline industry is in a good place entering 2018 and November's strong demand gives the industry momentum.

According to the IATA's data, on the global level, the total revenue passenger kilometer (RPK) an indicator of passenger growth climbed 8 percent in November 2017 as compared to the same month in 2016, the fastest rate in five months. It noted that the available seat kilometeres (ASKs) or capacity grew by 6.3 percent. It also showed that the ASK for India was at 10.4 percent, second only to China where capacity grew by 12.9 percent.

IATA's Director General and CEO, Alexandre de Juniac has said that the number of unique city-pair connections now tops 20,000. He said that passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper. He also expects that 2018 to be the fourth year in a row where the industry's return on invested capital will exceed the cost of capital. However, he said that challenges remained, including security threats, infrastructure constraints as well as growing fees and charges.

The CNX Nifty traded in a range of 10,690.40 and 10,597.10. There were 22 stocks in green as against 28 stocks in red on the index.

The top gainers on Nifty were Zee Entertainment up by 2.72%, ICICI Bank up by 2.50%, Bharti Infratel up by 1.94%, Vedanta up by 1.47% and Maruti Suzuki up by 1.29%. On the flip side, Lupin down by 1.38%, UPL down by 1.30%, Bharti Airtel down by 1.23%, Bosch down by 1.13% and Ambuja Cement down by 1.01% were the top losers.

European markets were trading in green; France’s CAC increased 10.34 points or 0.19% to 5,498.89, UK’s FTSE 100 gained 13.05 points or 0.17% to 7,775.99 and Germany’s DAX was up by 21.86 points or 0.17% to 13,224.76.

Asian equity markets ended mostly in green on Friday after oil prices rallied overnight and China dismissed media reports that officials have recommended slowing or halting purchases of US debt. Optimism about the earnings season also offered some support. Chinese shares closed higher for the eleventh straight session as investors looked past soft trade data. Official data showed that China's exports and imports growth slowed in December in a sign of weaker global and domestic demand. December exports grew an annual 10.9 percent, beating forecasts but down from a robust 12.3 percent gain in November. Imports grew an even slower pace of 4.5 percent. Though, Japanese shares ended lower as the yen's recent strength hurt exporters. Uniqlo-owner Fast Retailing posted record quarterly profit, helping limit the downside.