Bourses bounce back; Sensex reclaims 35,600 mark

Indian equity benchmarks got a breather on the last trading day of the week, with Sensex and Nifty showing a smart recovery of 1.02% and 0.87%, respectively. The markets made a firm start, aided by the Reserve Bank of India’s (RBI) deputy governor Viral Acharya’s statement that the RBI will continue to inject liquidity into the banking system through open market operation (OMO) purchases till the end of this fiscal. In the current financial year, the central bank has conducted OMO purchases to the tune of Rs 1.36 trillion, with over Rs 1 trillion of the infusion in the last three months. Traders took encouragement with a private report stating that in the next 16 years, India will dominate the list of fastest growing cities in the world. Domestic sentiments also got boost with another private report that the investment of $100 billion in the Indian telecom industry as envisioned in the National Digital Communications Policy 2018 (NDCP) would result in an increase of $1.21 trillion in India's Gross Domestic Product (GDP) on a cumulative basis.

In the last leg of the trade, the key indices added gains to end the session near intraday high points, tracking firm global cues. Traders were optimistic with a report that the RBI is likely to cut key interest rates by 25 basis points either at the upcoming policy review in February or the one after that in April. Adding more comfort, the Cabinet raised the government's contribution to National Pension Scheme (NPS) to 14% of basic salary from the current 10%. Some support also came with reports that the total wealth held by individuals in the country is expected to touch Rs 517.88 lakh crore by FY23, growing at an annual rate of 16.99%. Direct equity and mutual funds are expected to be the growth drivers of this northward trend, growing at a CAGR of 24.41% and 21.04%, respectively, over the next five years.  Meanwhile, Commerce and Industry Minister Suresh Prabhu sought investments from global funds in startups from different sectors including infrastructure, agriculture and healthcare.

On the global front, European markets were trading in green, as Germany's manufacturing orders increased for a third straight month in October, defying expectations for a decline, led by strong foreign demand despite the global trade uncertainties. The preliminary data from the Federal Statistical Office showed that factory orders grew 0.3% from September, while the street had forecast a 0.4% fall. The trade remained firm, even though German industrial production dropped 0.5 percent from September, when they grew 0.1 percent. Economists had forecast a 0.3 percent increase. Asian markets ended in green, after US stock markets recovered from an early plunge to end mixed overnight, helped by hopes the Federal Reserve could pause its interest-rate hikes. Investors looked ahead to a key US jobs report due tonight, with the street expecting employment to increase by 205,000 jobs in November after an increase of 250,000 jobs in October. The jobless rate is expected to hold at 3.7 percent.

Back home, selected stocks of healthcare sector ended higher, after the Cabinet gave ex-post facto approval to the Memorandum of Cooperation (MoC) between India and Japan in the field of healthcare and wellness, while some telecom sector stocks ended in green with Trai Secretary S K Gupta’s statement that the telecom sector will move to 5G by 2022 and access to digital platform will become highly advanced in the next five years. Consumer durable stocks remained in limelight, amid private report that a range of goods from air conditioners to dishwashers, from television sets to digital cameras, will likely become cheaper, with the Goods and Service Tax (GST) Council expected to slash rates to 18% on all products in the 28% slab, except demerit goods, cement and automobiles. Further, agriculture industry stocks remained in focus, as Union Cabinet approved a maiden export policy for the farm sector that imposes no restrictions on export of all organic and processed products. The policy seeks to double agricultural export to $60 billion by 2022.

Finally, the BSE Sensex gained 361.12 points or 1.02% to 35,673.25, while the CNX Nifty was up by 92.55 points or 0.87% to 10,693.70.

The BSE Sensex touched a high and a low of 35,730.05 and 35,378.27, respectively and there were 22 stocks advancing against 9 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index surged 0.23%, while Small cap index was down by 0.27%.

The top gaining sectoral indices on the BSE were Bankex up by 1.66%, Capital Goods up by 0.95%, FMCG up by 0.82%, Auto up by 0.79% and Consumer Disc up by 0.68%, while Utilities down by 1.05%, PSU down by 0.66%, Oil & Gas down by 0.65%, Metal down by 0.52% and Telecom down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 8.53%, Adani Ports & SEZ up by 2.71%, Bajaj Auto up by 2.23%, Infosys up by 1.92% and Asian Paints up by 1.69%. On the flip side, Sun Pharma down by 2.09%, Coal India down by 1.62%, Yes Bank down by 1.31%, NTPC down by 0.93% and Tata Steel down by 0.62% were the top losers.

Meanwhile, amid problems being faced by traders in filing annual goods and services tax (GST) return, the Confederation of All India Traders (CAIT) said it has urged finance minister Arun Jaitley to extend the last date for filing annual GST return from December 31, 2018 to March 31, 2019. It also urged that format should be made available in regional languages. It further said that the format of filing of annual GST return is not available anywhere including the GST website. Actually, the option itself is not available.

It underlined that under such circumstances it will not be possible for the traders to file their annual GST return by the stipulated period and as an immediate measure. Besides, it noted that the concept is till unclear to a large number of traders and most are not even aware of the obligation of filing annual GST return. It also urged that format should be made available in regional languages.

Moreover, CAIT added that they are unaware that annual return is the last opportunity for assessees to rectify their previously filed return with the department for the concerned year. This would help avoid any denial of input tax credit which in turn could also be resulted into unwanted tax recovery.

The CNX Nifty traded in a range of 10,704.55 and 10,599.35. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 8.84%, Bajaj Finserv up by 3.17%, Adani Ports & SEZ up by 2.76%, Bajaj Auto up by 2.33% and Bajaj Finance up by 2.22%. On the flip side, HCL Tech. down by 5.00%, GAIL India down by 3.94%, Sun Pharma down by 2.43%, Indiabulls Housing down by 2.28% and Coal India down by 1.54% were the top losers.

All European markets were trading in green; UK’s FTSE 100 jumped 106.47 points or 1.56% to 6,810.97, France’s CAC zoomed 66.35 points or 1.37% to 4,846.81 and Germany’s DAX was up by 85.45 points or 0.78% to 10,895.43.

Asian markets ended mostly higher on Friday after US stock markets recovered from an early plunge to end mixed overnight, helped by hopes the Federal Reserve could pause its interest-rate hikes. Investors looked ahead to a key US jobs report due tonight, with employment is expected to increase by 205,000 jobs in November after jumping by 250,000 jobs in October, while the unemployment rate is expected to hold at 3.7 percent. Japanese shares snapped a three-day losing streak despite a firm yen on lingering trade worries. Meanwhile, Chinese shares ended flat in thin trade after a sharp fall yesterday as the arrest of Huawei CFO Meng Wanzhou dealt a blow to hopes of easing of US-China trade tensions.