Benchmarks end at fresh record closing highs; Sensex tops 38K level

Indian equity benchmarks extended previous session’s rally to end the Thursday’s trade at fresh record closing high levels, with Sensex and Nifty conquering their crucial 38,000 and 11,450 marks, respectively. After making a positive start markets traded in green throughout the day, as sentiments remained up-beat with the International Monetary Fund’s (IMF) statement that India is on track to hold its position as one of the world’s fastest-growing economies as reforms start to pay off. The $2.6 trillion economy was described by Ranil Salgado, the IMF’s mission chief for India, as an elephant starting to run, with growth forecast at 7.3% in the fiscal year through March 2019 and 7.5% in the year after that. Adding some optimism among the investors, Commerce and Industry Minister Suresh Prabhu said that the exports are showing good sign and registering increase at the rate of 20%. Meanwhile, the government will shortly unveil a new industrial policy that aims to speed up regulatory reforms and lower power tariffs to make businesses more competitive and create more jobs.

Markets witnessed some hiccups in noon deals but managed to end comfortably above their crucial levels, as traders took some encouragement with a private report stating that optimism level among India’s chief financial officers for the July-September period has improved as compared to the previous quarter and going forward distribution of rainfall, raw material costs and revival in demand will be the key deciding factors. Sentiments remained buoyed with report that India’s average per capita income in the last four financial years was higher at Rs 79,882 as compared to the preceding four fiscals. As per the report, the per capita income grew by 4.6% in 2013-14 to Rs 68,572; 6.2% to Rs 72,805 in 2014-15; 6.9% to Rs 77,826 in 2015-16 and by 5.7% to Rs 82,229 in 2016-17.

On the global front, European markets are trading mostly in red in early deals on Thursday, even though France's economic growth is set to improve in the third quarter. As per survey data from Bank of France showed, Gross domestic product is forecast to expand 0.4% in the third quarter, compared to 0.2% growth seen in the second quarter. Asian markets exhibited mixed trend, as China’s consumer price inflation rose an annual 2.1% on year in July, topping forecasts for 2.0% and up from 1.9% in June. The producer price index jumped 4.6% from last year- beating forecasts for 4.5% and down from 4.7% in the previous month.

Back home, power stocks ended higher on report that the installed power generation capacity in India has risen to 344 GigaWatts (GW) and its energy deficit, which stood at over 4% in 2014, has shrunk to less than 1% in 2018. Besides, real estate sector remained on buyers’ radar with private report stating that Indian real estate sector is seeing an encouraging growth across assets class with returning confidence in the market. While, corporate occupies and institutions investors are seen actively investing and leasing office space in the country. Stocks related to textile and leather sectors remained in focus on report that the proposed industrial policy, currently under preparation by the Department of Industrial Policy and Promotion (DIPP) may have special provisions for manufacturing in the textile, leather sectors to boost growth as well as focus on a diffusion of overall export hubs across the country which are currently getting concentrated in few states.

Finally, the BSE Sensex jumped 136.81 points or 0.36% to 38,024.37, while the CNX Nifty was up by 20.70 points or 0.18% to 11,470.70.

The BSE Sensex touched a high and a low of 38,076.23 and 37,939.28, respectively and there were 17 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.59%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Realty up by 2.39%, Metal up by 1.37%, Bankex up by 1.32%, PSU up by 1.08% and Power was up by 1.02%, while Telecom down by 1.31%, Consumer Durables down by 0.87%, Healthcare down by 0.69%, Capital Goods down by 0.28% and Oil & Gas was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.64%, Axis Bank up by 3.86%, Vedanta up by 2.56%, SBI up by 2.53% and Power Grid Corporation up by 1.69%. On the flip side, Bharti Airtel down by 4.64%, ONGC down by 1.75%, Kotak Mahindra Bank down by 0.98%, Indusind Bank down by 0.90% and Larsen & Toubro down by 0.88% were the top losers.

Meanwhile, the Department of Telecommunications (DoT) has amended the licences of telecom operators and internet service providers to incorporate net neutrality rules in the country, which bar service providers from discriminating against internet content and services by blocking, throttling or granting them higher speed access. In a notification, DoT said that the government is committed to the fundamental principles and concepts of net neutrality.

Therefore, internet access services need to be governed by a principle that restricts any form of discrimination, restriction or interference in the treatment of content, including practices like blocking, degrading, slowing down or granting preferential speeds of treatment to any content. The telecom department has mentioned to keep critical internet of things services, which shall be identified by DoT, to be excluded from the restrictions of net neutrality. The amendments are to be issued by division managing particular licences.

The new amendment states that a telecom licence holder providing internet access service shall not engage in any discriminatory treatment of content, including based on sender or receiver, the protocols being used in or the user equipment. The amendment prohibits from entering into any arrangement, agreement or contract by whatever name called, with any person, natural or legal that has the effect of discriminatory treatment of content. According to the note, the amendments will include specific points around principle of non-discriminatory treatment, definition of specialised services and reasonable traffic management and other exceptions.

The CNX Nifty traded in a range of 11,495.20 and 11,454.10. There were 22 stocks in green as against 27 stocks in red, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Axis Bank up by 4.20%, ICICI Bank up by 4.17%, Hindalco up by 3.40%, SBI up by 2.90% and Vedanta up by 2.56%. On the flip side, Bharti Airtel down by 4.75%, Titan Company down by 2.14%, ONGC down by 2.03%, Cipla down by 1.82% and Indiabulls Housing Finance down by 1.56% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 shed by 19.18 points or 0.64% to 7,727.47 and France’s CAC dipped 11.41 points or 0.21% to 5,490.49, while Germany’s DAX was up by 22.65 points or 0.18% to 12,656.19.

Asian equity markets ended mixed on Thursday after China announced retaliatory tariffs against the United States, raising concerns over the escalation of the trade war between the world's top two economies. A slump in oil prices overnight and the US announcement that it would soon impose new sanctions on Russia also kept investors nervous. Chinese shares ended higher after a government report showed consumer inflation in the country rose an annual 2.1 percent in July, exceeding expectations for 2.0 percent and up from 1.9 percent in June. The producer price index climbed 4.6 percent from last year - beating forecasts for 4.5 percent and down from 4.7 percent in the previous month. Meanwhile, Japanese shares ended lower as machinery orders data disappointed and caution crept in ahead of US-Japan trade talks. Singapore’s market was closed for a holiday.