Bulls tighten grip on Dalal Street; Nifty reclaims 10,550 mark

Monday turned out to be a remarkable day of trade for Indian equity benchmarks where bulls tightened their grip on Dalal Street, with Nifty and Sensex recapturing their crucial 10,550 and 34,400 levels, respectively. The markets’ mood remained up-beat throughout the day and benchmarks fervently gained from strength to strength, as investors continued hunt for fundamentally strong stocks. Key gauges made a gap-up opening on a private poll showing that India’s economy grew at its fastest pace in a year in the October-December quarter as consumers, businesses and the government stepped up spending. This suggests that disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July are fading. The markets also got boost with the report that Commerce and industry ministry has appointed four institutes, including IIFT and ICAI, to interact with stakeholders and suggest measures to push India’s ranking in ease of doing business index.

Markets extended rally in second half of trade to end near intraday high levels, as some support came with Union Minister Parshottam Rupala’s statement that the Centre was making concerted efforts to double the income of farmers by 2022 and asked scientists, and others concerned to tackle the challenges being faced by the agriculture sector. He opined that scientists, environmental and agricultural experts must have a global outlook and local approach to combat the challenges in agricultural and environmental sectors. Adding to the optimism, a private report highlighting that focus on investments, productivity will lead to sustainable growth rate. According to the report, India needs to industrialize further and target 25 per cent of GDP pie for manufacturing sector by 2025 in order to achieve double-digit investment growth and create jobs for its swelling labour force.

Firm opening in European counters too aided sentiments, as focus gradually shifts from the earnings season to monetary policy and politics this week with Italy’s general election on Sunday. Asian markets ended mostly in green after US stock indexes notched gains of more than a percent in the last session. Japanese Nikkei edged higher by over a percent, as major exporters gained on a weaker yen. China’s manufacturing sector likely posted another month of relatively solid growth in February, despite long Lunar New Year holidays and a tough pollution crackdown which disrupted factory operations.

Back home, stocks related to infrastructure sector remained on buyers’ radar after railway and coal minister Piyush Goyal said that the government is thinking of 360 degree solutions in terms of setting things in order for infrastructure sector. He added that the government has moved the needle from century old railway to connect with the most modern technology but also look into future. Mining stocks edged higher after the government opened up the coal sector to private players. Select stocks from commodity chemicals were buzzing with Chemicals Export Promotion Council (CHEMEXCIL) chairman Satish Wagh’s statement that the chemicals industry is expected more than double and touch $300 billion by 2025 from $147 billion now. The chairman added that the industry is also targeting chemical exports of $18 billion by 2020 from $12 billion in FY17. However, software stocks remained under pressure after the Trump administration made the H-1B visa-approval process even harder for Indian techies.

Finally, the BSE Sensex surged 303.60 points or 0.89% to 34,445.75, while the CNX Nifty was up by 91.55 points or 0.87% to 10,582.60.

The BSE Sensex touched a high and a low of 34,483.39 and 34,225.72, respectively and there were 24 stocks on gaining side as against 7 stocks on losing side on the index.

The broader indices ended in green, the BSE Mid cap index gained 0.74%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 3.30%, Auto up by 2.22%, Capital Goods up by 1.83%, Industrials up by 1.71% and Bankex was up by 1.63%, while IT down by 1.10%, TECK down by 0.69%, Healthcare down by 0.04% and FMCG was down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.41%, Tata Motors up by 3.22%, Indusind Bank up by 2.94%, Larsen & Toubro up by 2.83% and Tata Motors - DVR up by 2.82%. On the flip side, Sun Pharma down by 2.46%, TCS down by 1.35%, Infosys down by 1.26%, ITC down by 0.93% and Bharti Airtel down by 0.74% were the top losers.

Meanwhile, following the fraudulent transactions worth Rs 11,400 crore detected at Punjab National Bank (PNB), Finance Minister Arun Jaitley has ruled out privatisation of public sector banks (PSBs) and said that the move may not find political consensus. He also said that a lot of people have started talking of privatisation in the outcome of the PNB fraud. He pointed out that the issue of bank privatisation involves a large political consensus and also involves an amendment to the law (Bank Nationalisation Act).

Noting that recapitalisation of PSBs over the last decade had little impact on improving their health, the Federation of Indian Chambers of Commerce and Industry (FICCI) called for their privatisation in the interest of creating a dynamic banking sector in the country. FICCI President Rashesh Shah had met the Finance Minister and asked him to begin the process of bank privatisation in a phased manner, leaving just 2-3 lenders in the public sector.

Besides, Industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) had also demanded that the government to reduce its stake in banks to less than 50 percent so that they can work with the sense of accountability and with the interest of stakeholders and depositors on priority. Moreover, the Confederation of Indian Industry (CII) had urged the government to surrender its majority control of banks and allow them to function like private sector lenders.

The CNX Nifty traded in a range of 10,592.95 and 10,520.20. There were 38 stocks in green as against 12 stocks in red on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.04%, Tata Motors up by 3.50%, Larsen & Toubro up by 3.25%, Indusind Bank up by 2.91% and UPL up by 2.90%. On the flip side, Sun Pharma down by 2.50%, TCS down by 1.63%, Tech Mahindra down by 1.61%, Infosys down by 1.36% and ITC down by 1.12% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 24.68 points or 0.34% to 7,269.09, France’s CAC increased 30.6 points or 0.58% to 5,347.97 and Germany’s DAX was up by 52.86 points or 0.42% to 12,536.65.

Asian markets closed mostly in green on Monday as oil prices climbed and the Federal Reserve's monetary policy report released on Friday suggested a gradual pace of interest rate hikes in 2018. US bond yields declined from recent four-year highs as investors awaited US inflation data and the first House testimony by the new head of the Federal Reserve for further insight on inflation and interest rates. Japanese shares rallied on the back of sharp rises in US stocks on Friday. Further, Chinese shares ended higher, with major indexes climbing for a sixth session in a row, led by start-ups which saw their best day in seven months on expectations they will benefit from a proposal to delay reforms for initial public offerings (IPOs). Market participants were also keeping a close watch on the impact of certain amendments in the wording of China’s constitution.