Bulls tighten grip on Dalal Street; Sensex conquers 37,300 mark

Bulls went brisk on Dalal Street on second day in the row, with frontline gauges logging new record highs for yet another day, conquering their crucial 11,250 (Nifty) and 37,300 (Sensex) bastions for the first time ever on Friday. After a gap-up opening, there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Sentiments remained up-beat with Niti Aayog CEO Amitabh Kant’s statement that the government’s digitization initiative will bring more transparency in the system. Traders remained optimistic with a private report that after almost a year and half of disruptions in Indian economy due to demonetisation and the Goods and Services Tax (GST), the consumer sentiment is up in the month of July on all fronts from jobs, investments, health of the economy to personal finance. Meanwhile, a report stated that the BRICS nations resolved to strengthen multilateral trading system and called upon member countries of the World Trade Organisation to abide by the rules, amid ongoing trade disputes between major economies.

Markets extended northward journey to end near intraday highs on private report stating that trading across borders, payment of indirect taxes and insolvency resolution are the three sets of reforms where India is upbeat, ahead of the release of the World Bank’s ease of doing business report later this year. Investors took encouragement with report that foreign direct investment (FDI) from nations widely regarded as tax havens such as Cayman Islands and Hong Kong jumped in 2017-18, even as overall India-bound investments showed a slower rise, year-on-year (Y-o-Y). From the Cayman Islands, inflows rose in a single year from a low $71.03 million to a whopping $1.23 billion. Traders got some support with Principal Deputy Assistant Secretary of State for South and Central Asia’s statement that the US wants to reduce its trade deficit with India as quickly as possible, asserting that the Trump administration is aggressively pushing New Delhi on the issues of medical devices, pharmaceuticals, dairy products and agriculture.

Global cues too remained supportive with European counters trading in green in early deals, as investors await US GDP data tonight and the outcome of Bank of Japan policy meeting next week for directional cues. US second-quarter GDP growth is expected to be anywhere between four and five percent, a very impressive number, thanks to the boost from the GOP tax cuts of late 2017. Asian markets ended in green despite IMF warned China against aggressive economic stimulus.

Back home, oil & gas stocks remained in limelight with Minister of State for External Affairs V K Singh’s statement that there is scope for India and Vietnam to deepen cooperation in the oil and gas sector despite ‘all the troubles’ the Southeast Asian country faces. Food processing Companies stocks edged higher, with a report that the foreign direct investment (FDI) in the food processing sector rose 24% in 2017-18 to $904.9 million. However, select textile stocks remained under pressure after private report stated that the ongoing indefinite strike of transporters has cast a shadow on the $130-billion textile industry which is facing a staggering loss of up to Rs 1,500 crore.

Finally, the BSE Sensex surged 352.21 points or 0.95% to 37,336.85, while the CNX Nifty was up by 111.05 points or 0.99% to 11,278.35.

The BSE Sensex touched a high and a low of 37,368.62 and 37,134.88, respectively and there were 21 stocks advancing against 10 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.95%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were FMCG up by 2.04%, Consumer Durables up by 2.03%, Metal up by 1.89%, Oil & Gas up by 1.69% and Energy was up by 1.55%, while IT down by 0.02% was the lone losing index on BSE.

The top gainers on the Sensex were ITC up by 5.24%, Tata Motors - DVR up by 4.48%, Tata Motors up by 3.56%, Tata Steel up by 2.71% and ICICI Bank up by 2.62%. On the flip side, Power Grid Corporation down by 1.72%, Adani Ports & SEZ down by 1.44%, Coal India down by 1.04%, TCS down by 1.03% and Maruti Suzuki down by 0.86% were the top losers.

Meanwhile, highlighting various structural changes brought by the government, Niti Aayog CEO Amitabh Kant has said that the government’s digitization initiative will bring more transparency in the system and further gave an example that benefits of over 500 Government schemes is being directly credited in the accounts of the beneficiaries using the Direct Benefit Transfers (DBT).

Kant also mentioned that the government has done away with many of the obsolete rules to drive the ease of doing business. Besides, he said that complex rules and regulations operating in India in the past was a constraint and added that the country’s growth can only be sustainable only if it is inclusive. Further, he listed various factors like significant variation in inter-state and inter-district parameters, which are contributing to the unsustainable growth in India and expressed need to address them.

Talking about the success stories of various districts which have performed to bring their ranking up amongst these aspirational districts, Niti Aayog CEO said that there should be a team spirit among states and the Centre to achieve the growth on a sustainable basis.

The CNX Nifty traded in a range of 11,283.40 and 11,210.25. There were 35 stocks in green as against 15 stocks in red on the index.

The top gainers on Nifty were ITC up by 5.01%, Indian Oil Corporation up by 4.12%, Tata Motors up by 3.89%, Hindalco up by 3.61% and Titan Company up by 3.57%. On the flip side, Dr. Reddy’s Lab down by 2.36%, Bajaj Finserv down by 1.57%, Adani Ports & SEZ down by 1.08%, TCS down by 1.07% and Coal India down by 0.85% were the top losers.

European markets were trading in green; UK’s FTSE 100 surged by 45.79 points or 0.59% to 7,708.96, Germany’s DAX rose by 68.38 points or 0.53% to 12,877.61 and France’s CAC was up by 14.86 points or 0.27% to 5,495.41.

Asian equity markets ended higher on Friday, although growth concerns kept Chinese markets under pressure. While easing of US-EU trade tension supported underlying sentiments, the upside remained limited ahead of US GDP data tonight and the Bank of Japan policy meeting due next week. Japanese shares closed higher on taking comfort from signs of rapprochement between the United States and Europe over trade issues, though investors remained cautious on speculation that the Bank of Japan might hint at signal to unwind its massive stimulus program next week.