Bourses bounce back; Sensex reclaims 36,000 mark

Friday turned out to be a great day for Indian equity benchmarks, with Sensex and Nifty ending the session above their 36,000 and 10,850 levels, respectively. The start of the day was jubilant, buoyed by World Bank’s report that increasing exports can lead to better jobs and higher wages in India, including more formal sector employment for youth and women. Adding enthusiasm among traders, the Indian manufacturing sector strengthened further in the month of February, with a sharp and accelerated increase in sales boosting growth of output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 54.3 in February from 53.9 in January. Some comfort also came after Finance Minister Arun Jaitley expressed hopes that the remaining six public sector banks (PSBs) under the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework will soon come out of it with the government commitment of support to them.

The markets maintained their gains to end the day on strong note, amid Moody's report stating that the Indian economy is expected to grow at 7.3% in calendar year 2019 and 2020, and the government spending announced ahead of elections this year will support near-term growth. The market participants paid no heed towards slowdown of economic growth. India’s gross domestic product (GDP) growth slowed to a five-quarter low of 6.6% in October-December period of this fiscal (FY19), as compared to 7% growth in the same quarter of FY18, on the back of lower farm and manufacturing growth and weaker consumer demand. Investors also overlooked reports that the growth of eight core infrastructure industries slowed down to 1.8% in January due to fall in output of crude oil, refinery products and electricity. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 134.8 in January, 2019.

On the global front, European markets were trading green, as Turkey's manufacturing activity was the strongest in six months in February, amid a slower decline in output and a rebound in new export orders as well as softer reduction in employment. The survey data from IHS Markit showed that the Istanbul Chamber of Industry Turkey Manufacturing Purchasing Managers' Index rose to a six-month high of 46.4 from 44.2 in January. Asian markets ended in green, after White House economic advisor Larry Kudlow said the US and China are making fantastic progress in their trade negotiations, with China expressing willingness to make key structural changes to prevent intellectual property theft.

Back home, sugar companies stocks ended higher, after Indian Sugar Mills Association (ISMA) Director General Abinash Verma said that the government's decision to provide up to Rs 10,540 crore as soft loans to sugar mills will help them in clearing arrears of cane growers by about Rs 9,000 crore. Stocks related to the minerals and mining industry remained buzzing, as the Union Cabinet approved National Mineral Policy 2019. The New National Mineral Policy will ensure more effective regulation. It will lead to sustainable mining sector development in future while addressing the issues of project affected persons especially those residing in tribal areas.

Finally, the BSE Sensex surged 196.37 points or 0.55% to 36,063.81, while the CNX Nifty was up by 71.00 points or 0.66% to 10,863.50.

The BSE Sensex touched a high and a low of 36,140.67 and 35,952.41, respectively and there were 25 stocks advancing against 06 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.29%, while Small cap index was up by 2.13%.

The top gaining sectoral indices on the BSE were PSU up by 1.85%, Basic Materials up by 1.66%, Industrials up by 1.59%, Metal up by 1.57% and Capital Goods up by 1.37%, while Telecom down by 1.34% was the lone losing index on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.97%, Indusind Bank up by 2.94%, Yes Bank up by 2.68%, Vedanta up by 2.24% and Hero MotoCorp up by 1.78%. On the flip side, Bharti Airtel down by 3.43%, Asian Paints down by 1.20%, Bajaj Auto down by 1.16%, Axis Bank down by 0.80% and Reliance Industries down by 0.39% were the top losers.

Meanwhile, Finance Minister Arun Jaitley stated that the Union Cabinet has cleared a Rs 10,000-crore programme under the FAME-II scheme for promoting electric and hybrid vehicles. The scheme will be implemented over a period of three years with effect from April 1, 2019. The objective of the scheme is to encourage faster adoption of electric and hybrid vehicles by way of offering upfront incentive on purchase of electric vehicles and also by way of establishing necessary charging infrastructure for EV. It is the expanded version of the present scheme FAME India I (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles) which was launched on April 1, 2015, with a total outlay of Rs 895 crore.

The emphasis will be on electrification of public transport that includes shared transport, demand incentives on operational expenditure mode for electric buses will be delivered through state/city transport corporations (STUs).  In three-wheeler and four wheeler segments, incentives will be applicable mainly on vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus will be on private vehicles. The scheme is planned to support 10 lakh electric two-wheelers, 5 lakh three-wheelers, 55,000 four-wheelers and 7,000 buses. The scheme will help in addressing the issue of environmental pollution and fuel security.

Besides, in order to encourage advance technologies, the benefits of the incentives will be extended to only those vehicles which are fitted with advanced battery like lithium-ion battery and other new technology batteries. The scheme also proposes support for setting up of charging infrastructure whereby about 2,700 charging stations will be set up in metros, other million-plus cities, smart cities and cities of hilly states across India.

The CNX Nifty traded in a range of 10,877.90 and 10,823.10. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.48%, HPCL up by 4.43%, Indusind Bank up by 2.93%, BPCL up by 2.68% and IOC up by 2.56%. On the flip side, Bharti Airtel down by 3.16%, Bajaj Auto down by 1.36%, Axis Bank down by 1.00%, Asian Paints down by 0.80% and UPL down by 0.80% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 46.28 points or 0.65% to 7,121.01, France’s CAC soared 41.37 points or 0.79% to 5,281.90 and Germany’s DAX was up by 129.79 points or 1.13% to 11,645.43.

Asian markets ended mostly in green on Friday after fourth-quarter US GDP data topped expectations and White House economic advisor Larry Kudlow said the US and China are making ‘fantastic’ progress in their trade negotiations. Chinese shares ended higher after global index provider MSCI said it would quadruple the weighting of Chinese mainland shares in its global benchmarks later this year. Further, Japanese shares rose sharply to hit 2-1/2-month highs on futures buying as a weaker yen boosted exporters. Meanwhile, the South Korea markets were closed for the Independence Movement Day holiday. Taiwan’s stock market remains shut for the Peace Memorial Day holidays.