Post Session: Quick Review

Indian stock markets traded firmly in green during F&O expiry session on Thursday and ended with gains of over a percent, buoyed by expectations that the US Federal Reserve may pause raising interest rates next year bringing liquidity to emerging markets like India. This was the fourth consecutive day of rise for the domestic markets, recapturing their crucial 10,850 (Nifty) and 36,200 (Sensex) bastions. Key indices begun day on positive note and traded with good gains, as traders got encouragement from Union Minister Suresh Prabhu’s statement that the commerce and industry ministry is preparing an action plan for implementing the proposed new industrial policy, aimed at promoting manufacturing and economic growth of the country. The markets also drew some support with a private report that the Reserve Bank of India (RBI) may have to conduct open market operations (OMOs) of another Rs 1,60,000 crore in the fourth quarter of the current fiscal to tide over the banking liquidity crisis.

Sentiment remained buoyant with private report stating that the Reserve Bank of India won't raise interest rates until at least April, much later than thought just one month ago and rise will probably be a ‘one-and-done.’ Moreover, a stronger rupee and falling crude oil prices also helped in adding to positive cues. The traders even overlooked a private report stating that RBI board’s decision of restructuring loans up to Rs 25 crore for the MSME sector is a ‘step backwards’.

On the global front, Asian markets closed mostly higher on Thursday, while European markets were trading in green, tracking a surge on Wall Street, after the chairman of the US Federal Reserve suggested it may nearing an end to its three-year rate tightening cycle, boosting interest in riskier assets.

The BSE Sensex ended at 36209.08, up by 492.13 points or 1.38% after trading in a range of 35946.24 and 36253.85. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.27%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.08%, Bankex up by 1.82%, Energy up by 1.59%, Basic Materials up by 1.49% and Consumer Durables up by 1.45%, while IT down by 0.90%, Utilities down by 0.87%, Power down by 0.68% and TECK down by 0.57% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 4.60%, Kotak Mahindra Bank up by 4.02%, Mahindra & Mahindra up by 3.49%, Vedanta up by 3.08% and Indusind Bank up by 2.88%. (Provisional)

On the flip side, Power Grid down by 2.20%, ONGC down by 1.23%, Infosys down by 1.00%, NTPC down by 0.94% and Sun Pharma down by 0.53% were the top losers. (Provisional)

Meanwhile, with an aim to promote manufacturing and economic growth of India, Union Minister Suresh Prabhu has said that the commerce and industry ministry is preparing an action plan for implementing the proposed new industrial policy. He added that ministry looks to prepare the action plan before seeking the Cabinet approval for the new policy.

The proposed policy aims at promoting emerging sectors and modernising existing industries. It will also look to reduce regulatory hurdles and encourage adoption of frontier technologies such as robotics and artificial intelligence. With an aim to create jobs for the next two decades, promote foreign technology transfer and attract $100 billion FDI annually, the Department of Industrial Policy and Promotion (DIPP) in August last year had floated a draft industrial policy. This will be the third industrial policy after the ones released in 1956 and 1991.

Besides, about free trade agreements, Prabhu said the ministry has appointed two agencies to prepare a template for negotiating these trade pacts. He also urged the textiles industry to prepare a road map to boost exports. He said the contribution of textiles and apparel can be increased by increasing investments. Prabhu added that a free trade agreement with EU would relieve the pressure on the industry and enhance competitiveness. The ministry is also looking to fast track negotiations of the long stalled proposed free trade agreements with the European Union.

The CNX Nifty ended at 10875.75, up by 146.90 points or 1.37% after trading in a range of 10782.35 and 10883.05. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 4.25%, Bajaj Auto up by 4.16%, Hindalco up by 4.14%, Kotak Mahindra Bank up by 4.07% and Mahindra & Mahindra up by 3.63%. (Provisional)

On the flip side, HCL Tech down by 2.50%, Power Grid down by 2.22%, Tech Mahindra down by 1.32%, ONGC down by 1.26% and Infosys down by 1.01% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 54.44 points or 0.77% to 7,058.96, France’s CAC rose 38.11 points or 0.76% to 5,021.35 and Germany’s DAX added 65.23 points or 0.57% to 11,364.11.

Asian markets closed mostly higher on Thursday, though markets in China and Hong Kong shares ended in the red amid anxiety ahead of crucial Trump-Xi meeting on the sidelines of the G-20 summit later this week. While a substantive breakthrough is unlikely, the two sides may agree on a communique for a de-escalation of trade tensions. Underlying sentiment remained supported across the region after Federal Reserve Chairman Jerome Powell said that current interest rate is 'just below a range of estimates of so-called neutral level'. Japanese shares ended higher despite the dollar weakening against the yen on expectations of a slowdown in the pace of rate hikes by the Federal Reserve.