Dalal Street end at record closing high; Nifty reclaims 11,000 mark

Extending jubilation for fifth straight session, Indian equity benchmarks ended the Thursday’s trade with a gain of three fourth of a percent, with Sensex hitting new lifetime high, while Nifty ending above its crucial 11,000 mark. The rally was mainly fuelled by a solid decline in crude prices, in fact, the most in two years. Markets made an optimistic start and traded jubilantly throughout the session, as sentiments remained up-beat with a report that India has become the world’s sixth largest economy overtaking France. According to World Bank data on gross domestic product (GDP) of countries for 2017, India’s gross domestic product (GDP) stood at $2.597 trillion at the end of 2017, compared to $2.582 trillion for France. Traders also got some encouragement with the International Labour Organization (ILO), an arm of the United Nations, report that if 40% of India’s electricity comes from renewables by 2030 (from 7.5% in February 2018), the country could add about 3 million new jobs.

Adding to optimism, the estimated savings and gains since the inception of Aadhaar-based Direct Benefit Transfer (DBT) stood at over Rs 90,000 crore as on March 31 this year. However, traders booked some of their gains at higher levels in last leg of trade awaiting May industrial growth (IIP) data and June retail inflation (CPI) data due later in the day. Some concerns came with a private report stating that global debt rose to a record $247 trillion in the first quarter, more than $29 trillion higher than the end of 2016. Traders also took note of Chief Economic Adviser (CEA) Arvind Subramanian’s statement that a three-tier structure under new tax regime is possible as revenues stabilise. He also said that GST, India's biggest reform in indirect taxes still remains a work in progress and there is a need for further simplification of rates with fewer exemptions and simpler policies.

Firm opening in European counters too aided sentiments as investors consolidated steep losses from the previous session when heightened fears of an escalation to the US-Sino trade war soured sentiment. Asian markets ended in green, on expectations that the US threats to expand tariff hikes is bluff and bluster and trade agreements will ultimately be reached.

Back home, the major industry players like Reliance Industries, Yes Bank and HDFC collectively contributed to the gains, while Energy index gained the most among all other sectoral indices with the gains of over 3%. On the sectoral front, oil marketing companies viz. HPCL, BPCL and IOC rallied on fall in global crude oil prices. However, stocks related to real estate sector edged lower despite a private report that the private equity (PE) investment in Indian real estate sector grew by an average 36% annually to reach $8.6 billion in 2017 from $2.5 billion in 2014. Telecom sector stocks too declined despite report that the Telecom Commission approving the new telecom policy - National Digital Communications Policy (NDCP), 2018 - aimed at promoting investments, ease of doing business, and emerging technologies like 5G.

Finally, the BSE Sensex soared 282.48 points or 0.78% to 36,548.41, while the CNX Nifty was up by 74.90 points or 0.68% to 11,023.20.

The BSE Sensex touched a high and a low of 36,699.53 and 36,422.08, respectively and there were 17 stocks advancing against 14 stocks declining on the index.
The broader indices ended in red; the BSE Mid cap index lost 0.52%, while Small cap index was down by 0.06%.

The top gaining sectoral indices on the BSE were Energy up by 3.07%, Oil & Gas up by 1.60%, Bankex up by 0.92%, Capital Goods up by 0.69% and PSU was up by 0.40%, while Realty down by 1.14%, Auto down by 0.77%, TECK down by 0.67%, Basic Materials down by 0.62% and IT was down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.42%, Wipro up by 2.44%, Larsen & Toubro up by 1.94%, HDFC up by 1.74% and SBI up by 1.49%. On the flip side, Vedanta down by 3.05%, Infosys down by 1.95%, Tata Motors - DVR down by 1.68%, Bajaj Auto down by 1.66% and Mahindra & Mahindra down by 1.40% were the top losers.

Meanwhile, the Telecom Commission (TC), the highest decision-making body in the Department of Telecommunications (DoT) has approved the principle of net neutrality, which bar service providers from discriminating against Internet content and services by blocking, throttling or granting them higher speed access. However, certain emerging and critical services such as remote surgery and autonomous cars will be kept out of net neutrality norms.

Apart from this, TC has also approved the new telecom policy ‘National Digital Communications Policy (NDCP), 2018’ for seeking approval of the Union Cabinet. The policy aims to provide access to every household with download speed of 50 Mbps, attract investment of around Rs 6.5 lakh crore in the sector and create four million new job opportunities in the next few years.

In addition, it approved avoidance of double tax on virtual network operators (VNOs) who provide retail services of telecom operators. According to the proposal approved, VNOs will be required to pay levies based on their adjusted gross revenue earned from any value addition that they will be do over the top of service they will buy from telecom operators for selling it to end consumers.

Further, the commission has approved rules for running pilot projects that will be funded from Universal Services Obligation Fund. The pilot projects will be aimed at exploring alternate broadband connectivity technology other than prevalent at the moment like WiFi and mobile Internet and also look at addressing connectivity solutions for less developed districts. 

The CNX Nifty traded in a range of 11,078.30 and 10,999.65. There were 28 stocks in green as against 22 stocks in red on the index.

The top gainers on Nifty were Reliance Industries up by 4.05%, BPCL up by 2.89%, Bajaj Finance up by 2.62%, Wipro up by 2.46% and Dr. Reddy’s Lab up by 2.40%. On the flip side, UPL down by 4.21%, Vedanta down by 2.87%, Bajaj Auto down by 2.04%, Infosys down by 1.93% and Grasim Industries down by 1.82% were the top losers.

European markets were trading in green; Germany’s DAX increased 74.84 points or 0.60% to 12,491.97, UK’s FTSE 100 added 60.39 points or 0.79% to 7,652.35 and France’s CAC was up by 37.83 points or 0.70% to 5,391.76.

Asian equity markets ended higher on Thursday on expectations that the US threats to expand tariff hikes is bluff and bluster and trade agreements will ultimately be reached. Oil steadied after going into free fall on Wednesday amid supply concerns and the yen weakened ahead of US consumer price inflation due tonight, while gold held steady near one-week low. Chinese stocks rose as state media sought to downplay recent market turbulence and the central bank set a stronger daily currency fixing than traders had expected. Further, Japanese shares recovered from sharp losses in the previous session after the dollar hit a six-month high against the yen on the back of strong producer price inflation data released overnight.