Benchmarks end higher on F&O expiry day

Indian equity bourses ended higher on the last day of the December series of derivatives contracts, with both Sensex and Nifty surging around 0.45% each, amid firm global markets. The start of the Thursday’s trading session was positive, buoyed by Reserve Bank of India study report showing that Private sector non-finance firms reported a 41 per cent growth in net profits during the July-September quarter, despite higher expenditure as other income contributed to growth. Domestic sentiments got boost with a private report that with global crude oil prices slumping to below $50 a barrel just months after crossing $86, the Prime Minister Narendra Modi-led government is now confident that the current account deficit (CAD) for 2018-19 (FY19) can be contained at about 2 per cent of gross domestic product (GDP). Some support also came in after another private report that the government is likely to infuse Rs 28,615 crore into seven public sector banks (PSBs) through recapitalisation bonds by the end of this month. The amount infused will help the banks meet regulatory capital requirement, and its disbursement might take place before December 31.

The markets remained in green throughout the session, as buying got intensified with the commerce and industry minister Suresh Prabhu’s statement that that India will aim to receive $100 billion of foreign direct investments (FDI) in the next two years, from different sectors. He also noted that the country would remain a top destination for foreign investors in the next year 2019. Some relief also came after the government said that PSBs reported recovery of Rs 60,713 crore against non-performing assets (NPAs) in the April-September period (H1) of current fiscal year (FY19). It added that this is double of the amount recovered in the corresponding period last year and more significant returns on high-value accounts are expected. But, in the last hour of the trade, some of the markets gains got trimmed, with India Ratings and Research’s report stating that farm loan waivers announced by a number of states recently will adversely impact the combined state government capex spending. Investors took note of Corporate Affairs Secretary Injeti Srinivas’ statement that insolvency law is a game-changer but non-adherence to timelines and inordinate delay in admission of cases are major concerns. He also said the law has already impacted the behaviour of borrowers and lenders. 

On the global front, European markets were trading in red, after the European Central Bank said that the global economy is set to slow down in 2019 and stabilize thereafter. It added that Global inflationary pressures are expected to rise slowly as spare capacity diminishes. Asian markets ended higher tracking overnight rally on Wall Street. Easing worries about the tenure of Federal Reserve Chairman Jerome Powell after Kevin Hassett, chairman of the White House Council of Economic Advisers, said Powell's job was not in jeopardy, and bargain hunting after recent losses, pushed up stock prices.

Back home, airline industry stocks ended mixed, amid a report that Aviation watchdog DGCA has proposed duty time limits and rest hours for air traffic services personnel, wherein an individual can be on duty for up to 12 hours in a day. This is the first time that the regulator has mooted duty time limits for Air Traffic Services (ATS) personnel and it also comes at a time when air traffic has been growing exponentially, while stocks related to tea industry came under pressure, amid a research report by Crisil showing that profit margins of domestic tea planters are expected to contract in the coming two financial years due to wage hike, increasing production and muted export realization. Further, NBFC stocks remained in buzz with a private report stating that the higher rated NBFCs have done better than most other borrowers, with their increase in costs being lower than rise in banks’ weighted average lending rate, while steel sector stock were in focus, as India has challenged the WTO dispute panel's ruling that the country's move to impose safeguard duty on some iron and steel products was inconsistent with certain global trade norms.

Finally, the BSE Sensex surged by 157.34 points or 0.44% to 35,807.28, while the CNX Nifty was up by 49.95 points or 0.47% to 10,779.80.

The BSE Sensex touched a high and a low of 36,041.24 and 35,781.95, respectively and there were 18 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.32%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Energy up by 1.54%, IT up by 1.32%, TECK up by 1.22%, FMCG up by 1.04% and Oil & Gas up by 0.83%, while Auto down by 0.37%, Metal down by 0.31%, Bankex down by 0.28%, Basic Materials down by 0.26% and Telecom down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.10%, Infosys up by 1.98%, NTPC up by 1.68%, ONGC up by 1.67% and Hindustan Unilever up by 1.55%. On the flip side, Tata Motors - DVR down by 2.09%, Hero MotoCorp down by 1.71%, Bharti Airtel down by 1.51%, Tata Motors down by 1.23% and Tata Steel down by 1.14% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped Rs 79,247 crore at the end of November. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at November end climbed to Rs 79,247 crore from Rs 66,587 crore at the end of October. In September, the value of P-note investments stood at Rs 79,548 crore.

Of the total, P-note holdings in equities at November-end were at Rs 62,971 crore, while in debts and derivatives were at Rs 15,044 crore and Rs 1,232 crore respectively. Besides, the quantum of FPI investments via P-notes rose to 2.5% during the period under review from 2.2% in the preceding month. P-note investments were on a decline since June last year and hit an over eight-year low in September 2017. This drop in investment trend continued till 2018. However, these investments rose slightly in August and again dropped in September and October.

In July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. In December, capital market regulator SEBI relaxed its norms for clubbing of investment limits by well regulated foreign investors.

The CNX Nifty traded in a range of 10,834.20 and 10,764.45. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 2.24%, Tech Mahindra up by 2.21%, Bharti Infratel up by 2.06%  Zee Entertainment up by 2.03%, and Infosys up by 1.91%. On the flip side, BPCL down by 2.01%, Tata Motors down by 1.67%, Hero MotoCorp down by 1.46%, Bharti Airtel down by 1.37% and Tata Steel down by 1.35% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 35.71 points or 0.53% to 6,650.28 and Germany’s DAX shed 152.27 points or 1.43% to 10,481.55, while France’s CAC was up by 3.93 points or 0.08% to 4,630.32.

Asian markets ended mostly higher on Thursday, tracked by Wall Street’s huge rally yesterday. After suffering a severe setback on Christmas Eve, US stocks climbed higher overnight with traders indulging in hectic bargain hunting. Easing worries about the tenure of Federal Reserve Chairman Jerome Powell and a strong rebound in crude oil prices aided sentiment. The Japanese market rose sharply, extending gains to a second successive session. However, the Hong Kong and Chinese shares ended lower after weak Chinese industrial data highlighted the difficulties the world's second largest economy is facing. Data showed industrial profits declined 1.8 percent in November from a year earlier, the first negative reading since December 2015 and a steep fall from 3.6 percent growth in October.