Bulls tighten grip on Dalal Street; Sensex rallies over 1%

Key Indian benchmarks extended the rally in late morning session, as bulls tighten their grip on the street, on the back of positive factory output data. India’s Industrial production growth, gave a positive surprise, accelerating to 25-month high of 8.4% in November 2017, as compared to 5.1% in November 2016, on the back of robust performance of manufacturing and capital goods sectors. Traders were also taking some encouragement with the private report stating that the Indian economy is expected to witness an average GDP growth of 7.3 percent over 2020-22. According to the global financial services major, the structural growth story in India remains strong from a medium term perspective. Some support also came with a report highlighting that country's foreign exchange reserves surged by $1.758 billion to mount a new record high of $411.124 billion in the week to January 5. Besides, firm Asian cues along with buying in Banking, Metal and Basic Materials stocks, too added some gains. On the sectoral front, select aluminium companies stocks were trading higher with taking support from Aluminium Association Chairman Satish Pai’s statement that the aluminium industry is expected to grow 7 percent over the next two years and added that aluminium demand has rebounded and expects to see a strong demand in January.

On the global front, Asian markets were trading mostly in green, tracking the record closing highs on Wall Street Friday, a weaker US dollar and higher commodities prices. Optimism about corporate earnings and global economic growth buoyed investors’ sentiments. Back home, in scrip specific development, Shree Ganesh Remedies gained after the company received an order from Syntor Fine Chemicals, UK for 15 MT of high value fine chemical products for a total value of $1.1 million.

The BSE Sensex is currently trading at 34947.49, up by 355.10 points or 1.03% after trading in a range of 34687.21 and 34963.69. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Bankex up by 1.27%, Metal up by 1.16%, Basic Materials up by 1.14%, Consumer Durables up by 0.70% and Capital Goods up by 0.65%, while Auto down by 0.12% and Telecom down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were HDFC up by 5.08%, ICICI Bank up by 3.51%, Tata Steel up by 2.17%, NTPC up by 1.45% and Kotak Mahindra Bank up by 1.08%. On the flip side, Indusind Bank down by 0.91%, Hero MotoCorp down by 0.70%, ONGC down by 0.67%, Maruti Suzuki down by 0.58% and Sun Pharma down by 0.39% 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 is currently trading at 10773.90, up by 92.65 points or 0.87% after trading in a range of 10713.80 and 10782.65. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were HDFC up by 5.52%, ICICI Bank up by 3.57%, Tata Steel up by 2.25%, Zee Entertainment up by 2.10% and NTPC up by 1.19%. On the flip side, Eicher Motors down by 1.76%, ONGC down by 1.00%, Indusind Bank down by 0.94%, HCL Tech. down by 0.89% and Hero MotoCorp down by 0.74% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite increased 2.72 points or 0.04% to 6,372.78, FTSE Bursa Malaysia KLCI increased 4.5 points or 0.25% to 1,827.17, KOSPI Index increased 6.39 points or 0.26% to 2,502.81, Nikkei 225 increased 66.86 points or 0.28% to 23,720.68, Taiwan Weighted increased 72.35 points or 0.66% to 10,956.31 and Hang Seng increased 267.27 points or 0.85% to 31,679.81.

On the flip side, Shanghai Composite decreased 10.8 points or 0.31% to 3,418.14.