Frontline equities enticing some more traction

Frontline equity indices enticing some more traction have added some more points on the streets, with the Sensex and Nifty gaining more than 240 and 60 points, respectively. Traders were encouraged with a report stating that retail inflation cooled to an about one-and-half year low of 2.33 per cent in November, The consumer price index (CPI) based retail inflation in October was revised upwards to 3.38 per cent from 3.31 per cent earlier. The markets also remained energized with the encouraging October industrial production and it has sets the tone for a robust economic growth in the second half of the fiscal. India’s industrial output grew at an 11-month high of 8.1 per cent in October mainly on the back of mining, power and manufacturing sectors coupled with higher offtake of capital as well as consumer durable goods. Traders took note of World Economic Forum (WEF) founder and executive chairman Klaus Schwab’s statement that India is still in the ‘middle class’ in ease of doing business and the country should work towards creating the necessary ecosystem to boost entrepreneurship.

On the global front, Asian markets were trading in green, extending gains from the previous session, following the positive lead overnight from Wall Street. Optimism about US-China trade relations and news that British Prime Minister Theresa May survived a no-confidence vote by the Conservative Party boosted investor sentiment. Back home, former Reserve Bank of India (RBI) Governor, Raghuram Rajan stated that with geo-political factors impacting crude prices, India needs to have a good oil hedging policy as the volatility will continue to rise.

The BSE Sensex is currently trading at 36020.12, up by 241.05 points or 0.67% after trading in a range of 35929.29 and 36047.99. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.31%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were Realty up by 1.43%, FMCG up by 1.38%, Capital Goods up by 1.08%, Bankex up by 1.00% and Industrials was up by 0.97%, while Consumer Durables down by 0.04% is the only losing index on BSE.

The top gainers on the Sensex were SBI up by 2.40%, Tata Motors - DVR up by 1.90%, Yes Bank up by 1.71%, Tata Motors up by 1.65% and HDFC Bank was up by 1.29%. On the flip side, Sun Pharma down by 1.15%, TCS down by 1.05%, Hero MotoCorp down by 0.84%, Adani Ports down by 0.81% and Coal India was down by 0.67% were the top losers.

Meanwhile, S&P Global has said that India’s rapid economic growth will be enough to offset worries about the independence of its central bank and keep its credit rating in the coveted investment grade bracket. It also said ‘we always like to see a central bank that is independent because if you do not, it can have very negative consequences on your capacity to contain inflation and foster growth’. It added at the moment the high growth is enough to keep the rating stable.

It further mentioned that ‘when you are growing at 7%, that environment is quite forgiving, because it allows for a lot of these unorthodox things to happen without having a tremendous amount of damage’. Still, there are other pressures mounting too. Prime Minister Narendra Modi’s support has taken a hit ahead of national elections next year, volatile crude prices are tough for a country that imports over 90 percent of its oil, and there is general pressure on emerging markets amid a rumbling global trade war.

India’s BBB- rating puts it on the bottom rung of the investment grade ladder, and sentiment towards the country was hit when central bank governor Urjit Patel resigned following a months-long tussle over policy with the government.

The CNX Nifty is currently trading at 10807.15, up by 69.55 points or 0.65% after trading in a range of 10778.60 and 10816.55. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 6.26%, SBI up by 2.37%, HPCL up by 2.14%, Yes Bank up by 2.06% and Grasim Industries was up by 2.03%. On the flip side, UPL down by 1.19%, Sun Pharma down by 1.09%, TCS down by 1.04%, GAIL India down by 1.00% and Adani Ports was down by 0.88% were the top losers.

Asian markets were trading in green, Nikkei 225 surged 224.58 points or 1.04% to 21,827.33, Jakarta Composite soared 55.02 points or 0.9% to 6,170.60, Straits Times advanced 14.40 points or 0.46% to 3,114.39, KOSPI rose 14.90 points or 0.72% to 2,097.47, Shanghai Composite gained 41.65 points or 1.6% to 2,643.80, Hang Seng increased 331.93 points or 1.27% to 26,518.64 and Taiwan Weighted was up by 27.91 points or 0.28% to 9,844.36.