Markets settle at record closing high; Nifty surpasses 10,700 mark

Continuing their record hitting spree, Indian equity benchmarks once again traded jubilantly and settled at all time closing levels with frontline gauges surpassing their crucial 34,800 (Sensex) and 10,700 (Nifty) levels for the first time ever. Markets started the session with gap-up start, as traders reacted positively to the IIP numbers, as an exponential rise in the manufacturing output lifted India's total factory production by over 8 percent in November from 1.99 percent in October and 5.1 percent during the corresponding period of 2016-17. On a year-on-year basis, the manufacturing sector expanded by 10.2 percent, whereas mining’s output inched-up by 1.1 percent and the sub-index of electricity generation increased by 3.9 percent. Some support also came with the wholesale price index-based inflation easing to a three-month low of 3.58 per cent in December, down from 3.93 per cent the month before. This decline comes after recent data released by the central statistics office (CSO) had shown that retail inflation had risen to a 17-month high of 5.21 per cent in December up from 4.88 per cent in November. However, India’s annual retail inflation data accelerated in December to a 17-month high of 5.21 percent, mainly driven by faster rises in prices of food and fuel products.

Some support also came with report that foreign investors have pumped in over Rs 5,200 crore in the Indian capital markets this month so far on anticipation of recovery in corporate earnings and attractive yields. Traders also took some encouragement with a foreign brokerage report enlightening that Indian economy is expected to witness an average GDP growth of 7.3% over 2020-22. According to the global financial services major, the structural growth story in India remains strong from a medium term perspective. The report highlighted that the uptick in the private capex cycle, which it anticipates will begin in 2018, will ensure that the economy enters into a sustained and productive growth cycle. Also traders reacted positively to report that the World Economic Forum (WEF) has ranked India at 30th position on a global manufacturing index -- below China’s 5th place but above other BRICS peers, Brazil, Russia and South Africa.

On the global front, Asian markets ended mostly in green, as higher commodity prices and optimism over corporate earnings helping underpin investors’ sentiments. European markets were trading in red in early deals, as the dollar continued its downward spiral against the euro and crisis-hit UK construction firm Carillion said it has filed for compulsory liquidation with immediate effect.

Back home, select Non-Banking Finance companies (NBFC) stocks were buzzing in today's trade on private report that NBFC are expected to report as much as 35% growth in earnings as retail loans by small and medium enterprises continued at a brisk pace even as state-run lenders continued to hold on to their purse strings due to bad loans. Stocks related to logistics space too remained in focus, as GST Network said that from February 1, transporters will not need separate transit passes for moving goods from one state to another as the e-way bill issued to them will be valid throughout India. However, IT pack remained under pressure despite Infosys reported decent Q3FY18 numbers. The company’s consolidated net profit stood at Rs 5,129 crore for the third quarter of fiscal 2017-18, registering 38.3 percent record annual growth from Rs 3,708 crore in the like period a year ago.

Finally, the BSE Sensex surged 251.12 points or 0.73% to 34,843.51, while the CNX Nifty was up by 60.30 points or 0.56% to 10,741.55.

The BSE Sensex touched a high and a low of 34,963.69 and 34,687.21, 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 slipped 0.04%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Bankex up by 1.25%, Consumer Durables up by 1.13%, Basic Materials up by 0.95%, Power up by 0.29% and Metal was up by 0.22%, while Telecom down by 0.98%, Auto down by 0.89%, Oil & Gas down by 0.70%, IT down by 0.48% and TECK down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 6.17%, ICICI Bank up by 3.73%, Tata Steel up by 1.58%, HDFC Bank up by 1.47% and Kotak Mahindra Bank up by 1.39%. On the flip side, Tata Motors - DVR down by 2.50%, ONGC down by 1.85%, Hero MotoCorp down by 1.57%, Indusind Bank down by 1.41% and Yes Bank down by 1.38% were the top losers.

Meanwhile, ahead of the upcoming budget, Finance Minister Arun Jaitley has said that the agriculture sector is the first and foremost priority of government because India’s GDP growth is not justifiable and equitable unless the benefits are clear and evident in the farm sector. Therefore, he underlined that government’s priority is to ensure the gains of economic growth also reach the farmers and the growth is visible even in the farm sector. The minister further stated that India is among the fastest growing economies in the world and the growth is benefiting people in different sectors.

Praising the contribution of farmers, Jaitley said that they have left no stone unturned to serve the nation and also said that they have worked hard to turn a food shortage country to a surplus now. Though, he observed that large portion of Indian population is dependent upon Agriculture sector. Adding further, he said that they see in some places the problem of falling prices because of higher production and noted that farmers are not getting the price for their produce. Therefore, he mentioned that the launch of options trading in guar seed on the commodity exchange NCDEX, is one of the major steps towards taking farmers out of this situation. He added that in the beginning, options trading may look like a small step but when its awareness increases in the coming days, it will provide huge benefit to the farmers.

According to the latest Central Statistics Office (CSO) data, the economic growth is expected to slow to a four-year low of 6.5 percent in 2017-18, the lowest under the Modi-led government, mainly due to poor performance of agriculture and manufacturing sectors. It has also pegged the expansion in activities like ‘agriculture, forestry and fishing’ to slow to 2.1 percent in the current fiscal from 4.9 percent in the preceding year.

The CNX Nifty traded in a range of 10,782.65 and 10,713.80. There were 20 stocks in green as against 30 stocks in red on the index.

The top gainers on Nifty were HDFC up by 5.80%, ICICI Bank up by 3.70%, Ambuja Cement up by 2.84%, Zee Entertainment up by 2.79% and Ultratech Cement up by 2.62%. On the flip side, Eicher Motors down by 2.57%, GAIL India down by 2.10%, ONGC down by 2.04%, Bajaj Finance down by 1.87% and Hero MotoCorp down by 1.83% were the top losers.

European markets were trading in red; Germany’s DAX decreased 33.93 points or 0.26% to 13,211.10, UK’s FTSE 100 slipped 9.81 points or 0.13% to 7,768.83 and France’s CAC was down by 7.13 points or 0.13% to 5,509.93.

Asian equity markets ended mostly in green on Monday, with new record closing highs on Wall Street Friday, higher commodity prices and optimism over corporate earnings helping underpin investors’ sentiments. Japanese shares ended higher even as the dollar weakened against most major currencies, including the yen. Though, Chinese shares fell on profit taking, ending an 11-sesssion winning streak after central bank data showed China's bank lending declined in December on measures taken by the government to curb credit growth. Hong Kong shares ended lower, snapping a 14-day winning streak, dragged down by a retreat in property shares and index heavyweight Tencent Holdings.