Rally continues for seventh straight session; Sensex regains 36,400 mark

Jubilation continued for the seventh straight session on Wednesday, with both the larger peers, Sensex and Nifty, ending with notable gains. The markets made a positive start of the day, as traders took engorgement with Union Minister of Commerce and Industry Suresh Prabhu’s statement that India will be 5 trillion dollar economy in coming 7-8 years and already have complete road-map for it. Domestic sentiments also remained optimistic with chairman designate of Central Board of Indirect Taxes and Customs P K Das’ statement 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. Adding more enthusiasm, Finance Minister Arun Jaitley released 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. Besides, investors took note of Niti Aayog CEO Amitabh Kant’s statement that achieving double digit growth in the manufacturing sector on sustainable basis is a ‘doable challenge’ but for that the country needs to integrate with global markets.

The trade remained positive during the whole day, tracking firm global cues. Traders were seemed taking encouragement with Union Minister Giriraj Singh’s statement that the government will set up 20 additional technology centres to help micro, small and medium enterprises (MSMEs). These centres support MSMEs by giving them access to advanced manufacturing technologies, skilling manpower and providing technical and business advisory support. Investors paid no heed towards 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. The market participants even overlooked another private report that the government’s note ban decision shaved off economic growth by at least 2 percentage points for the October-December quarter of 2016 in which the demonetisation move was effected.

On the global front, European markets were trading in green, despite Germany's business confidence eased for a fourth straight month in December to its lowest level in two years, as businesses were increasingly worried about the political developments in Europe and a slowing global growth, suggesting that the biggest economy in the euro area may slide into a technical recession. The Munich-based ifo Institute reported that the Ifo Business Climate Index dropped to 101 from 102 in November. The street had expected a score of 101.7. Asian markets ended in green, ahead of the Fed decision. The Federal Reserve is expected to raise interest rates for the fourth time this year later today, but the statement accompanying the rate decision is likely to be dovish amid rising risks to financial stability. Meanwhile, the Bank of Japan and the Bank of England are likely to maintain status quo when they review their monetary policies on Thursday.

Back home, shares of financial companies including banks and non-banking financial companies (NBFC) ended higher, as 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, while sugar sector stocks also gained, amid reports 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. Further, agri stocks remained in limelight, with Union Minister of Agriculture and Farmers’ Welfare Radha Mohan Singh’s statement that India has achieved food security and become a net exporter of agriculture commodities.

Finally, the BSE Sensex surged 137.25 points or 0.38% to 36,484.33, while the CNX Nifty was up by 58.60 points or 0.54% to 10,967.30.

The BSE Sensex touched a high and a low of 36,554.99 and 36,381.87, respectively and there were 19 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.50%, while Small cap index was up by 1.09%.

The top gaining sectoral indices on the BSE were Realty up by 3.11%, Telecom up by 1.90%, PSU up by 1.51%, Power up by 1.36% and Utilities up by 1.24%, while IT down by 1.06% and TECK down by 0.68% were the only losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 3.39%, Axis Bank up by 3.18%, SBI up by 2.68%, Maruti Suzuki up by 2.04% and Bharti Airtel up by 1.84%. On the flip side, Sun Pharma down by 2.10%, Indusind Bank down by 1.70%, Infosys down by 1.64%, TCS down by 1.03% and Vedanta down by 0.96% were the top losers.

Meanwhile, India has been ranked 108th in the World Economic Forum's latest gender gap index, same as 2017. However, India has improved in wage equality for similar work and has been able to fully close the tertiary education gender gap for the first time. According to the WEF Global Gender Gap Report 2018, while India has many challenges as it ranks 142nd out of total 149 countries in the economic opportunity and participation sub index, it also has a few achievements.

WEF has said that India needs to make improvements across the board, from women's participation to getting more women into senior and professional roles. It noted that India continues to rank third-lowest in the world on health and survival, remaining the world's least-improved country on this sub index over the past decade. In fact, it said India actually widens the gender gap on this sub index this year.

However, on the positive side, the report indicated that India has slightly improved in WEF's wage equality for similar work indicator, where it stood at 72nd place. It also noted that the country has also closed its tertiary education enrolment gap for the first time in 2018 and has managed to keep its primary and secondary gaps closed for the third year running. It added that India has the second-largest artificial intelligence (AI) workforce, but one of the largest AI gender gaps, with only 22% of roles filled by women.

The CNX Nifty traded in a range of 10,985.15 and 10,928.00. There were 35 stocks advancing against 14 stocks declining, while 1 stock remain unchnaged on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 7.85%, Bajaj Finserv up by 3.99%, Axis Bank up by 3.33%, Asian Paints up by 3.27% and Bharti Infratel up by 3.06%. On the flip side, HCL Tech. down by 2.76%, Sun Pharma down by 2.39%, Infosys down by 1.77%, Indusind Bank down by 1.51% and Kotak Bank down by 1.05% were the top losers.

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