Late recovery helps markets to close in green

Late hour recovery helped the Indian equity benchmarks to close the Wednesday’s trading session in green, with Sensex and Nifty gaining more than 150 and 50 points, respectively. After a sluggish start, key indices remained weak for the most part of the session, impacted with former chief economic advisor Kaushik Basu’s statement that distress in some sectors of the economy has slowed India’s GDP growth, the consequences of which could be far reaching. Basu said distress has been very much visible in the agriculture sector as the condition of farmers is bad. Domestic sentiments also got hit with a private report stating that as India near 2019 general elections, populist steps by the government may exert pressure on India’s fiscal scenario. It expected the general government debt at 70.1% of the GDP in FY19. Weakness in broader markets along with heavy sell-off in IT, Realty and Healthcare stocks also, kept the markets down. Sun Pharma Industries and Yes Bank also contributed to the losses during the trading session.

However, key indices recovered all of their losses in late noon deals to enter into positive territory, on account of last hour buying. The street got encouragement, after investments in the Indian capital market through participatory notes climbed to Rs 79,247 crore in November after hitting a nine-and-a-half year low at the end of preceding month. Some comfort also came with Finance Minister and GST Council Chairman Arun Jaitley raising hopes of further pruning the peak rate (28%) and merging the 12% and 18% slabs. Traders also took some support with a private report that the government is considering several measures to support farmers in distress as pressure mounts for a nationwide loan waiver scheme ahead of the general election. Some relief also came with the commerce ministry Suresh Prabhu’s statement that India is preparing a specific strategy for exports to each geography as part of plans to make 2019 a year when outward shipments would start driving the country's overall economic growth.

On the global front, the markets across Europe remained shut for Boxing Day holiday. Asian markets ended in red, as worries about political uncertainty in the US following a partial government shutdown that now looks set to extend into the New year, and mounting concerns about global economic growth forced investors to largely stay away from stocks. US President Donald Trump's highly critical comments about the Federal Reserve's rate decisions also dented investor sentiment. With a few markets in the region closed for public holiday, movements were a bit sluggish amid subdued activity.

Back home, stocks related to tractor manufacturing industry remained in limelight, with Ratings agency ICRA’s report showing that Indian tractor demand is expected to grow at 10-12 percent in the current fiscal but it will moderate to 4-5 percent in 2019-20. The industry has maintained a healthy year-on-year growth of 14.7 percent during April-October 2018, while metal stocks ended higher, after the commerce ministry Suresh Prabhu is in favour of hiking import duty on aluminium with a view to support domestic manufacturers. Auto stocks also gained, aided by ICRA’s another report indicating that two-wheeler sales in India is expected to grow at 8-10 per cent in 2018-19, supported by growing per capita income, improved farm sentiment following near-normal monsoon over the last three financial years, higher minimum support price (MSP) and farm loan waiver in select states.

Finally, the BSE Sensex surged by 179.79 points or 0.51% to 35,649.94, while the CNX Nifty was up by 66.35 points or 0.62% to 10,729.85.

The BSE Sensex touched a high and a low of 35,711.26 and 35,010.82, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.01%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Telecom up by 1.69%, Capital Goods up by 0.74%, Bankex up by 0.62%, Industrials up by 0.62% and Basic Materials up by 0.56%, while IT down by 0.74%, Realty down by 0.46%, Healthcare down by 0.34%, TECK down by 0.30% and FMCG down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.21%, HDFC up by 2.00%, HDFC Bank up by 1.96%, Larsen & Toubro up by 1.14% and Bajaj Auto up by 1.10%. On the flip side, Sun Pharma down by 1.78%, Yes Bank down by 1.48%, TCS down by 1.33%, NTPC down by 0.92% and Tata Motors - DVR down by 0.75% were the top losers.

Meanwhile, Indian IT industry faces threats from rising protectionism, data flow curbs and fast-changing technological shifts, but it is keeping hopes high for the New Year with plans afoot for big investments in automation and artificial intelligence (AI). For the industry body National Association of Software & Services Companies (Nasscom), 2018 has been the year of 'Digital at Scale' as IT firms focussed on leveraging new technologies and ensuring sustainability by creating right skills with help from innovation, policies and partnerships.

The industry body has projected exports to grow at 7-9 percent for 2018-19, almost same as the previous fiscal, but domestic revenues, excluding hardware, is expected to grow by 10-12 percent to be at $28 billion-$29 billion in the next financial year against $26 billion this year and this may make the new year transformative with overseas funds accounting for a lion's share so far. Over years, the industry has graduated from being the back office of the world to being at the forefront of change, helping clients optimise operations and stay ahead of competition. Protectionist stances are being seen across key markets -- be it the US, the UK or Australia - with governments bringing in more stringent regulations around procurement of work visas. As a counter, Indian IT firms are ramping up their local presence abroad by hiring locals.

Nasscom President Debjani Ghosh has said that the year ahead is punctuated with several transformative opportunities. He also said that rising protectionism continues to be an irritant and the anti-immigration rhetoric discriminatorily targets Indian companies and challenges the level playing field for business delivery. He added that the companies, however, are upbeat on opportunities.

The CNX Nifty traded in a range of 10,747.50 and 10,534.55. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.25%, Adani Ports & SEZ up by 4.13%, Bharti Airtel up by 4.01%, Bajaj Finserv up by 3.04% and HDFC Bank up by 2.12%. On the flip side, Sun Pharma down by 2.22%, Yes Bank down by 1.54%, TCS down by 1.38%, Infosys down by 0.79% and Eicher Motors down by 0.74% were the top losers.

Asian markets ended mostly lower on Wednesday as worries about political uncertainty in the US following a partial government shutdown that now looks set to extend into the New Year, and mounting concerns about global economic growth forced investors to largely stay away from stocks once again. US President Donald Trump's highly critical comments about the Federal Reserve's rate decisions also dented investor sentiment. With a few markets in the region closed for public holiday, movements were a bit sluggish amid subdued activity. Though, Japanese shares closed higher on a wave of late buying after fluctuating throughout the session. A weaker yen contributed as well to market's rise.