Markets end jubilant session at intraday highs

Key Indian equity benchmarks geared up on Wednesday to end the trading session with plenty of gains i.e. 1.79%, ahead of macro-economic data of industrial production and consumer price inflation to be released after the market hours. The start of day was cheerful, aided by reports that the Reserve Bank will infuse Rs 10,000 crore into the market through open market operations (OMOs) on December 13. Adding some enthusiasm on the street, Industry body CII said 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. Domestic sentiments also got boost, with another 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.

In the second half of the session, the markets gained traction to reach their intraday high points, tracking really in global markets. The markets participants remained encouraged, as Asian Development Bank (ADB) retained 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. Separately, CII said that the government should consider permitting 100% foreign direct investment. Further, the street were seen taking note of Fitch Ratings’ statement 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. The markets overlooked report that the government has detected GST evasion worth Rs 12,000 crore in 8 months till November. Investors even paid no heed towards Reserve Bank’s data report showing that India Inc's overseas investment fell 35 percent over the year to $1.05 billion in November.

On the global front, European markets were trading in green, as German investor confidence rose strongly in December, defying expectations for a modest weakening. But caution prevailed as financial analysts' assessment of the current economic situation again deteriorated sharply due to sluggish economic growth and uncertainties linked to global trade and Brexit. The results of a survey by the Centre for European Economic Research, or ZEW, showed that the ZEW Indicator of Economic Sentiment for Germany rose 6.6 points to reach minus 17.5 points in December. Adding some relief, UK wages rose at the fastest pace in a decade in the three months to October, suggesting that real pay growth is turning sustainable and contribute to economic growth if a no-deal Brexit is avoided. Average wages including bonuses rose 3.3 percent year-on-year, which was the biggest increase since the May to July period of 2008. Asian markets ended in green, amid renewed optimism about the trade talks between the US and China. China's Commerce Ministry said Chinese Vice Premier Liu He spoke with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer.

Back home, 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, while healthcare stocks gained, buoyed by Prime Minister Narendra Modi’s statement that India is set to increase its public health spending to 2.5 percent of its gross domestic product (GDP) by 2025. Further, coal Industries stocks were in limelight, as Coal Ministry stated that the government’s effort to increase domestic coal production and power demand falling with the onset of the winters will check coal imports. Power plants across the country had imported 6.6 MT coal in October, 43.5% higher than the monthly average import quantity recorded this year. Stocks related to renewable energy (RE) sector also remained 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.

Finally, the BSE Sensex surged 629.06 points or 1.79% to 35779.07, while the CNX Nifty was up by 188.45 points or 1.79% to 10737.60.

The BSE Sensex touched a high and a low of 35826.58 and 35167.47, respectively and there were 31 stocks advancing against no declining stocks on the index.

The broader indices ended in green; the BSE Mid cap index gained 2.53%, while Small cap index was up by 2.46%.

The top gaining sectoral indices on the BSE were Realty up by 4.07%, Auto up by 3.58%, Telecom up by 2.77%, Industrials up by 2.60% and Consumer Disc up by 2.57%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Hero MotoCorp up by 7.01%, Bharti Airtel up by 6.69%, Yes Bank up by 5.30%, Adani Ports & SEZ up by 4.90% and Tata Motors - DVR up by 4.07%, while there were no losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) in its latest data has showed that it continued to remain a net seller of the US dollar in October 2018, as it sold $7.204 billion of the greenback in the spot market. RBI maintains that its intervention in the foreign exchange market is to curb volatility in the rupee and not to target a level of the domestic currency.

In the reporting month, the central bank purchased $945 million, while sold $8.149 billion in the spot market. In September 2018, the RBI sold $31 million of the US currency in the spot market on a net basis, after it bought $1.012 billion, while selling $1.043 billion. Though, in October 2017, the bank was net buyer of US currency, after it had bought $1.910 billion, while sold $1.058 billion in the spot market.

Besides, the RBI data showed, in the forward dollar market, the outstanding net forward sales at the end of October 2018 was $2.888 billion, compared with $1.358 billion in September. In the last financial year (FY18), the bank had net purchased $33.689 billion of US dollars from the spot market. It had bought $52.068 billion, while sold $18.379 billion. In the financial FY17, the RBI had bought $12.351 billion of the US dollar on a net basis.

The CNX Nifty traded in a range of 10,752.20 and 10,560.80. There were 46 stocks advancing against 04 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 7.15%, Indiabulls Housing Finance up by 6.91%, Hero MotoCorp up by 6.88%, Adani Ports & SEZ up by 5.37% and UPL up by 5.02%. On the flip side, Dr. Reddy’s Lab down by 4.38%, Bharti Infratel down by 0.77%, HPCL down by 0.55% and Titan down by 0.39% were the top losers.

All European markets were trading in green; UK’s FTSE 100 gained 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 was up by 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.