Post Session: Quick Review

Indian equity benchmarks extended their gaining streak for second straight session and ended with gains of around two percent, on hopes that the new RBI Governor will now address the liquidity issue and could help public sector banks in their recapitalisation programme, besides helping in stabilising short-term investor sentiment. Intense buying in the last hour helped the markets to end on an even stronger note, with Nifty and Sensex ending just shy of 10,750 and 35,800 marks respectively. Key indices made a gap-up opening and traded jubilantly during the morning session of the trade, tracking positivity in Asian markets. Traders took some support with Industry body CII’s statement that the appointment of former bureaucrat Shaktikanta Das as the new Reserve Bank of India (RBI) Governor comes as a huge sentiment booster to the industry and expressed confidence that he will take urgent steps to address the liquidity squeeze in economy. Das was appointed as the new governor of the RBI, a day after his predecessor Urjit Patel’s resignation. Moreover, CII said that the government should consider permitting 100% foreign direct investment (FDI) in multi-brand retail trade and further improve ease of doing business for the sector to promote growth in the segment.

Markets extended northward moment in the afternoon deals and traded near intraday high levels, as sentiments on the street improved further with Asian Development Bank (ADB) retaining Indian growth forecast at 7.3 percent for the current fiscal and 7.6 percent for the next financial year 2019-20, amid rebounding exports and higher industrial & agricultural output. Domestic sentiments were also buoyed with report stating that markets regulator SEBI will discuss a slew of measures at its board meeting on December 12 for expanding its offer for sale framework to more companies, relax its norms for clubbing of investment limits by established foreign investors and tighten insider trading rules. Meanwhile, Fitch Ratings said that the resignation of Urjit Patel as Reserve Bank Governor highlights the risks to RBI's policy priorities and increased government influence on the central bank could undermine the efforts to address bad loan problems.

On the global front, Asian markets ended in green on Wednesday, while European markets were trading in green, as President Donald Trump said he was upbeat about the chances of securing a trade deal with China. Back home, stocks related to renewable energy (RE) sector were in focus with rating agency ICRA expecting a capacity addition of 10,000 MW in fiscal year 2020, and has maintained a stable outlook for the sector. The share of renewable energy in the generation mix has increased from 5.6% in FY2015 to 7.8% in FY2018. Construction sector stocks ended in green despite CARE Ratings’ report stating that the pace of the construction sector is set to face a decline in FY20 on funding shortage for new projects.

The BSE Sensex ended at 35793.56, up by 643.55 points or 1.83% after trading in a range of 35167.47 and 35826.58. There were 31 stocks advancing against 0 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 2.62%, while Small cap index was up by 2.49%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.99%, Auto up by 3.47%, Telecom up by 2.88%, Metal up by 2.66% and Industrials up by 2.58%, while there were no losers on the sectoral front. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 7.09%, Bharti Airtel up by 5.55%, Adani Ports &SEZ up by 5.07%, Yes Bank up by 4.85% and Tata Motors - DVR up by 4.07%, while there were no losers on the Sensex. (Provisional)

Meanwhile, in order to promote growth in multi-brand retail trade, industry body the Confederation of Indian Industry (CII) in its latest report has stated that the government should consider permitting 100% foreign direct investment (FDI) in multi-brand retail trade and further improve ease of doing business for the sector. With an aim to overcome the barriers and enable a smooth growth and harmonious coexistence of traditional and modern retail, the industry body said the government needs to adopt a single cohesive national retail policy, which adequately addresses all the concern areas.

The report further said the government should encourage modernisation of traditional retail by subsidising these retailers to adopt technology. It added that improved access to capital will help retail business especially the traditional retailers. It said that with a simplified, cohesive policy and a focused effort on modernising traditional retail sector, government can create multiple wins such as higher growth of the sector, larger traditional retail stores under regulatory compliance, and improved back-end efficiency with a lower overall cost to serve. So far, only one foreign player, Tesco, had received approval for opening stores under the multi-brand retail policy.

This recommendation is a part of CII’s national retail policy, which was jointly prepared by the industry chamber and AT Kearney. The policy has suggested several steps, including strengthening labour laws by regularising policies around part-time labour to ensure greater participation of women in the workforce; and review of food safety policies to update archaic laws governing stocking limits, weights and measures, labeling, and taxes on expired food items. It also asked for decreasing real estate constraints for retail expansion by creating dedicated retail special economic zones as well as simplify regulations and real estate approvals for kiranas to expand their stores.

The CNX Nifty ended at 10747.15, up by 198.00 points or 1.88% after trading in a range of 10560.80 and 10752.20. There were 46 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hero MotoCorp up by 6.95%, Indiabulls Housing Finance up by 6.63%, Bharti Airtel up by 5.86%, UPL up by 5.39% and Adani Ports &SEZ up by 5.27%. (Provisional)

On the flip side, Dr. Reddys Lab down by 4.50%, Bharti Infratel down by 0.77%, HPCL down by 0.39% and Titan Co down by 0.33% were the top losers. (Provisional)

All European markets were trading in green; UK’s FTSE 100 increased 62.70 points or 0.92% to 6,869.64, France’s CAC rose 75.00 points or 1.56% to 4,881.20 and Germany’s DAX surged 114.16 points or 1.06% to 10,894.67.

Asian markets ended in green on Wednesday after various reports pointed to an easing in tensions between the US and China. Reports emerged in the US overnight that China was moving to cut import tariffs on cars made in the US from 40 percent to 15 percent -- that reports boosted auto stocks stateside and in Asia. reports that Huawei’s chief financial officer Meng Wanzhou was granted bail by Canada also added to the positive sentiment. Chinese shares ended slightly higher on easing trade tensions with the US and hopes of a domestic stimulus package, amid subdued market activity for the second day as investors remained cautious ahead of the year-end.