Bulls go berserk; Nifty reclaims 10,400 mark

Monday turned-out to be a jubilant day of trade for Indian equity benchmarks with frontline gauges ending the session with gains of around two percentage points, recapturing their crucial 10,400 (Nifty) and 33,900 (Sensex) levels. After making a gap-up opening, markets gained strength-to-strength and not even an iota of profit booking witnessed on Dalal Street as traders continued to build hefty positions across the board. Sentiments remained up-beat throughout the session as traders took some encouragement with IMF’s statement that the Indian economy now seems to be on its way of recovering from disruptions caused by demonetisation and roll-out of goods and services tax. At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of banking and financial systems. Investors also took some support with industry body FICCI’s report that manufacturers in the country have a positive outlook for the sector in the January-March quarter on the back of higher production. The proportion of respondents reporting higher output growth during the Q4 2017-18 has increased significantly to 55 per cent from 47 per cent in Q3.

Sentiments also remained up-beat as Union commerce and industry minister Suresh Prabhu exuded confidence that India will become a $5 trillion economy in the next seven years, adding that India will be a bigger economy than China at some point of time. He also said that manufacturing sector would contribute $1 trillion, services sector $3 trillion and the rest would come from agriculture for the country to become a $5 trillion economy in the next seven years. Some support also came with a report stating that the Centre is expecting to get around Rs 8,044 crore on account of dividend from Coal India as the miner's board approved payment of interim dividend for the financial year 2017-18 at a rate of Rs 16.50 per share. The miner's total payout on account of this would be to the tune Rs 10,242 crore.

Rally got extended after European markets made an optimistic start following the jump in US markets. European Central Bank (ECB) board member Benoit Coeure said that short term interest rates are to remain at very low levels in the euro zone. Asian markets rallied as US job data revive risk appetite. Chinese Commerce Minister Zhong Shan said that any trade war with the United States will only bring disaster to the world economy, as Beijing stepped up its criticism on proposed metals tariffs by Washington amid fears it could shatter global growth.

Back home, investors shrugged off the S&P Global Ratings’ report that US President Donald Trump’s decision to hike duties on steel and aluminium could result in retaliatory action from EU and China, triggering a trade war and hurting global economic growth. It said the overall economic impact of the tariffs on the United States in the near term is likely to be minimal, with a mixed impact on corporate sectors. On the sectoral front, real estate stocks remained buzzing on report that housing sales exceeded new supply by 5% during the last two years in seven major cities. The private report advised end-users and investors to buy flats as prices are stable and interest rate low. It highlighted that housing sales stood at 2,44,830 units during 2016 and 2017 calendar years in seven major cities, while cumulative new launches of homes were 2,33,387 units. Infrastructure related stocks edged higher after NHAI said that it will strive to construct 1,100 km of highways this month to achieve its target of building 3,500 km in the ongoing fiscal.

Finally, the BSE Sensex surged 610.80 points or 1.83% to 33,917.94, while the CNX Nifty was up by 194.55 points or 1.90% to 10,421.40.

The BSE Sensex touched a high and a low of 33,962.48 and 33,468.16, respectively and there were 29 stocks on gaining side as against 2 stocks on losing side on the index.

The broader indices were ended in green; the BSE Mid cap index gained 0.76%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Telecom up by 2.57%, Metal up by 2.32%, Oil & Gas up by 2.13%, FMCG up by 2.13% and Basic Materials was up by 1.91%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 4.68%, NTPC up by 4.33%, ITC up by 4.09%, Tata Motors up by 3.07% and Tata Steel up by 2.82%. On the flip side, Coal India down by 2.26% and SBI down by 0.12% were the only losers.

Meanwhile, expressing confidence on India’s economic growth, the Commerce and Industry Minister Suresh Prabhu has said that India will become a $5 trillion economy in the next seven years and after that in next 7-10 years’ time may be a $10 trillion economy. He also said that India will be a bigger economy than China at some point of time. Currently, India’s economy is estimated at $2.5 trillion and that of China at $11.85 trillion. Besides, India regained the tag of world's fastest growing major economy, registering Gross Domestic Product (GDP) growth of 7.2% in Q3 FY18.

Prabhu said “I am very sure, you take a medium term, India will grow at a much faster rate”. He added that his ministry has already prepared a paper on how India can become a larger economy. Elaborating further, he said that out of the total $5 trillion, the manufacturing sector would contribute $1 trillion, services sector $3 trillion and the rest would come from agricultural sector. He also highlighted about various steps being taken by the government to increase India’s exports.

However, expressing concerns over growing voices of protectionism, the Minister said that opening up of economies is necessary for global growth. He also said that they have seen after formation of The World Trade Organization (WTO) all the countries have benefited. He added that some countries benefited obviously more than others, like China is the biggest beneficiary of the WTO.

The CNX Nifty traded in a range of 10,433.65 and 10,295.45. There were 47 stocks in green as against 3 stocks in red on the index.

The top gainers on Nifty were Bharti Airtel up by 5.21%, Indian Oil Corporation up by 4.54%, ITC up by 4.11%, Vedanta up by 4.08% and NTPC up by 3.86%. On the flip side, Coal India down by 2.15%, Aurobindo Pharma down by 1.74% and SBI down by 0.06% were the few losers.

European markets were trading in green; UK’s FTSE 100 rose 1.71 points or 0.02% to 7,226.22, France’s CAC increased 15.55 points or 0.29% to 5,289.95 and Germany’s DAX was up by 92.76 points or 0.75% to 12,439.44.

Asian markets closed in green on Monday as geopolitical tensions eased, commodity prices advanced and the latest jobs report showed the US economy added the biggest number of jobs in over 1-1/2 years in February. Wages have lagged behind the growth in employment, helping ease investor fears over a faster pace of rate hikes by the Federal Reserve. Japanese shares hit a 1-1/2-week high, helped by tech shares, but early gains were trimmed as a suspected cronyism scandal involving the sale of state-owned land could hit Prime Minister Shinzo Abe's popularity. Also, Japan's business survey index of large manufacturers weakened notably in the three months ended March, the quarterly survey by the Ministry of Finance and the Cabinet Office showed, triggering some profit taking at higher levels. Further, Chinese stocks rose for a third day as easing trade-war fears helped lift material companies.