Bulls back on Dalal Street; Sensex reclaims 33,000 mark

Monday turned-out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges recapturing their crucial 33,000 (Sensex) and 10,100 (Nifty) levels, as sentiments got soothed on reports that the United States and China have quietly started negotiations to improve US access to Chinese markets eased fears of a trade war between the two economic giants. Markets started the session with caution and traded choppy for most part of the day, as traders remained concerned on Assocham’s report that the escalation of global trade protectionist measures into a full-scale global trade war will damage the Indian economy as well. A full-scale global trade war will impact the country’s exports and enlarge its current account deficit (CAD). FICCI has said India should play a proactive role in defusing the emerging possibilities of a global trade war that can derail the positive outlook in the world trade. Sentiments also remained dampened on report that the country’s foreign exchange reserves decreased marginally by $152.4 million to $421.334 billion in the week to March 16, on account of a fall in foreign currency assets. In the previous week, the reserves had increased by $728.9 million to $421.487 billion. The reserves had touched a life-time high of $421.914 billion on February 9, FY18.

Adding some worries on the street, the government reported that as many as 359 infrastructure projects, each worth Rs 150 crore and above, have shown cost overrun to the tune of Rs 2.18 lakh crore owing to delays and other reasons. However, markets pared all of their initial losses and turned green, as traders went for value buying after two sessions of drubbing. Traders took encouragement with finance ministry stating that India is on track to doubling the size of its economy to $5 trillion by 2025. Economic Affairs Secretary Subhash Chandra Garg said that the country is well poised to click a growth rate of 7-8% and with focus on start-ups, MSMEs and infrastructure investment it can step on to higher growth pedestal. Also, traders got some relief with report that SEBI is planning to increase the maximum investment by angel funds in venture capital undertakings to Rs 10 crore from the current Rs 5 crore. In this fast changing ecosystem, wherein angels are investing much higher amounts, such increase is needed to provide more opportunities to angel funds.

Firm opening in European counters too aided sentiments amid optimism that the protectionist shift in US trade policy may be more selective and tactical that first feared. Asian markets managed to end mixed on Monday as traders went for bargain hunting in last leg of trade.

Back home, auto stocks remained in top gear on report that the Supreme Court has proposed a roll out of BS-VI fuel across 13 Metros by April 1, 2019. The Centre will consult oil marketing companies and will reply to the proposal for BS-VI roll-out. Majority of rural stocks ended higher on report that Indian equity market is expected to 'struggle' over the next few months, though stocks and sectors related to rural India might perform relatively better. However, shares of state-owned oil & gas companies were under pressure, led by GAIL India which was down by over 3%, after the media report suggested that state-owned Oil and Natural Gas Corporation (ONGC) may buy out gas utility in its Dahej mega petrochemical project in Gujarat to take full control of the recently commissioned plant.

Finally, the BSE Sensex surged 469.87 points or 1.44% to 33,066.41, while the CNX Nifty was up by 132.60 points or 1.33% to 10,130.65.

The BSE Sensex touched a high and a low of 33,115.41 and 32,515.17, respectively and there were 27 stocks on gaining side as against 4 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.19%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Bankex up by 2.30%, Metal up by 2.27%, Consumer Durables up by 2.24%, Telecom up by 1.74% and Capital Goods was up by 1.60%, while IT down by 0.68%, Oil & Gas down by 0.31% and TECK was down by 0.08% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.67%, SBI up by 5.01%, HDFC Bank up by 2.91%, Tata Steel up by 2.80% and HDFC up by 2.66%. On the flip side, Wipro down by 3.96%, Infosys down by 1.13%, Tata Motors - DVR down by 0.48% and TCS was down by 0.12% were the few losers.

Meanwhile, in an attempt to provide a big push to early-stage startup ecosystem, markets regulator the Securities and Exchange Board of India (SEBI) is planning to raise the maximum investment by an angel fund in any venture capital (VC) undertakings to Rs 10 crore from the current Rs 5 crore. It noted that in this fast changing ecosystem, wherein angels are investing much higher amounts, such increase is needed to provide more opportunities to angel funds. However, it said that the minimum investment amount for an angel fund will continue to be Rs 25 lakh.

Besides, SEBI plans to halve the minimum corpus size required for an angel fund to register with it to 5 crore. It is considering to raise the maximum period of accepting funds from an angel investor to 5 years from the present limit of 3 years. This will allow angel funds more time to identify opportunities and invest in VC firms. Further, in line with the Companies Act, the regulator is looking to amend SEBI (Registrars to an Issue and Share Transfer Agents) norms and SEBI (Banker to an Issue) regulations that will enable a registrar as well as banker to an issue to maintain records of books of accounts and documents for a minimum period of eight years after completion of the relevant transactions.

The markets regulator also plans to provide an option to listed companies for distribution of cash benefits -- dividend of equity and preference shares as well as interest and maturity proceeds on debt instruments -- through the depositories in addition to the present system of distribution either directly by them or through the registrar to an issue and share transfer agents. As of now, there is a restriction on listed companies availing services of depositories for distribution of cash benefits.

The CNX Nifty traded in a range of 10,143.50 and 9,958.55. There were 39 stocks in green as against 11 stocks in red on the index.

The top gainers on Nifty were Yes Bank up by 6.35%, SBI up by 5.28%, Zee Entertainment up by 3.62%, Bajaj Finance up by 3.51% and Tata Steel up by 3.44%. On the flip side, Wipro down by 3.51%, GAIL India down by 3.43%, HPCL down by 1.47%, Infosys down by 1.03% and Bosch down by 0.70% were the top losers.

The European markets were trading in green; France’s CAC gained 11.31 points or 0.22% to 5,106.53, UK’s FTSE 100 increased 15.48 points or 0.22% to 6,937.42 and Germany’s DAX was up by 59.94 points or 0.5% to 11,946.25.

Asian equity markets ended mixed on Monday as increased tensions between the US and China dented risk appetite and spurred demand for safe-haven assets. Chinese shares ended lower after China's new economy czar, Vice Premier Liu He, reportedly told US Treasury Secretary Steven Mnuchin in a phone call that Beijing was ready to defend itself in an escalating tariff dispute. Japanese shares ended lower as the yen reached a near 17-month high against the dollar on fears of a global trade war and caution towards political developments in Tokyo. Further, the Bank of Japan had likely bought exchange traded funds (ETFs) to support the market, which has been pushed lower by fears of a global trade war.