Post Session: Quick Review

Lower crude prices coupled with a strong rupee buoyed the Indian equity markets on Wednesday to log the 7th straight session of advances. Key gauges traded on positive note since the beginning, as traders got some encouragement with the Reserve Bank of India’s (RBI) statement that it has decided to scale up the amount of liquidity infusion by Rs 10,000 crore to Rs 50,000 crore this month after a review of the evolving liquidity conditions. The RBI also announced to conduct the purchase of government securities under Open Market Operations (OMOs) for Rs 150 billion on December 20. The markets also drew some comfort with chairman designate of Central Board of Indirect Taxes and Customs P K Das saying that the next three months would see the Centre put in place changes in policy and procedures to ensure India further improves its position in the Ease of Doing Business Report-2019.

Traders too remained optimistic with Finance Minister Arun Jaitley releasing the NITI Aayog's strategy for New India, a paper envisaging goals for the country in the 75th year of its Independence in 2022. According to the NITI Aayog strategy paper, the government aims to increase India's tax-to-GDP ratio to 22 per cent and accelerate economic growth rate to 8 per cent. However, up-ward move got restricted as some anxiety spread among the traders with a private report stating that the overall consumer confidence has slipped in the month of December, with liquidity crunch, high inflation and  rising interest rates leading to pessimism. The India Primary Consumer Sentiment Index (Consumer Confidence) has dropped by 0.6% over the previous month of November, signalling growing pessimism about the future prospects of the economy. 

On the global front, Asian markets ended mostly in green on Wednesday, while European markets were trading in green after a dramatic fall in the price of oil spurred speculation the U.S. Federal Reserve might be done with monetary tightening. Back home, sugar sector stocks were in focus with report that a delegation of domestic sugar industry held discussions with top representatives of all three sugar refineries of South Korea in Seoul with a view to increase shipment of the commodity. South Korea imports around 1.5 million tonnes of raw sugar annually and the Indian sugar industry is making efforts to export raw sugar from India during 2018-19 sugar season.

The BSE Sensex ended at 36463.10, up by 116.02 points or 0.32% after trading in a range of 36381.87 and 36554.99. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended green; the BSE Mid cap index rose 1.53%, while Small cap index was up by 1.04%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.31%, Telecom up by 1.84%, Power up by 1.52%, PSU up by 1.49% and Utilities up by 1.38%, while IT down by 1.09% and TECK down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 3.36%, Axis Bank up by 2.94%, SBI up by 2.56%, Maruti Suzuki up by 1.98% and Wipro up by 1.67%. (Provisional)

On the flip side, Sun Pharma down by 2.12%, Indusind Bank down by 1.74%, Infosys down by 1.68%, TCS down by 1.12% and Vedanta down by 1.01% were the top losers. (Provisional)

Meanwhile, after reviewing the evolving liquidity conditions, the Reserve Bank of India has decided to increase the amount of liquidity infusion by Rs 10,000 crore to Rs 50,000 crore in December 2018. The central bank had earlier announced to infuse liquidity amounting to Rs 40,000 crore through the purchase of government securities under Open Market Operations (OMOs) during December. The RBI will also conduct the purchase of government securities under OMO for Rs 15,000 crore on December 20.

It further decided to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The operations will be conducted through five auctions of Rs 10,000 crore each. It added that the liquidity conditions will continue to be monitored and depending on the assessment, RBI will consider similar quantum of OMO purchases until the end of March 2019.

The Central Bank said the exact calibration of the quantum of OMO would depend on sustained changes in the behaviour of currency in circulation, the magnitude of sterilisation operations for RBI's forex operations and other relevant factors. Besides, the RBI had already injected Rs 20,000 crore through two OMO purchase auctions.

The CNX Nifty ended at 10960.30, up by 51.60 points or 0.47% after trading in a range of 10928.00 and 10985.15. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 7.98%, Bajaj Finserv up by 3.83%, Axis Bank up by 3.41%, Asian Paints up by 3.26% and Bharti Infratel up by 3.14%. (Provisional)

On the flip side, HCL Tech. down by 2.87%, Sun Pharma down by 2.38%, Infosys down by 1.83%, Indusind Bank down by 1.64% and TCS down by 1.00% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 48.51 points or 0.72% to 6,750.10, France’s CAC was up by 16.15 points or 0.34% to 4,770.23 and Germany’s DAX added 39.59 points or 0.37% to 10,780.48.

Asian markets ended mostly higher on Wednesday ahead of the US Federal Reserve's monetary policy decision due later in the day. Meanwhile, the Fed is expected to sound a bit more dovish after raising rates by 25 basis points. Chinese shares ended lower as trade tensions remained in focus after US Treasury Secretary Steven Mnuchin said US-China trade talks to expand on a tariff truce are planned for January. Japanese shares closed down as trade data disappointed and caution set in ahead of the Bank of Japan's (BOJ) monetary policy decision due on Thursday. Japan posted a merchandise trade deficit of 737.3 billion yen in November, the Ministry of Finance said. That missed forecasts for a deficit of 630.0 billion yen following the 450.1 billion yen shortfall in October.