Bulls hold onto gains for third straight session

Bulls held onto gains for third straight session on Wednesday, with key Indian equity benchmarks closing the day with gains of over half a percent. Markets made a cheerful start, aided by the Reserve Bank of India’s (RBI) statement that it would infuse Rs 12,500 crore into the financial system on March 07, 2019. The purchase will be made through open market operations (OMOs). The market participants remained optimistic with the Union Minister for Finance and Corporate Affairs, Arun Jaitley’s statement that the Government is committed to facilitate trade and industry in the country so that the momentum of the growth continues to move-up. He also said that the process of reforms in case of direct and indirect taxes will continue in order to facilitate and further expedite the process of ease of doing business in the country. Adding some comfort, Commerce Secretary Anup Wadhawan said that the US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences (GSP) programme will not have a significant impact on exports to America.

Key indices kept their heads in positive territory during the whole day, amid reports that the government introduced a scheme for providing financial assistance for transport and marketing of agriculture products with a view to boosting export of farm commodities to certain countries in Europe and North America. Traders took support with the Federation of Indian Chambers of Commerce and Industry (FICCI) President Sandip Somany’s statement that the government has promised to lower corporate tax rate to 25% for all companies once Goods and Services Tax (GST) mop-up improves. Investors paid no heed towards the Centre for Monitoring Indian Economy’s (CMIE) latest report showing that the unemployment rate in India rose to 7.2% in February 2019, the highest since September 2016, and up from 5.9% in February 2018. The unemployment rate has climbed despite a fall in the number of job seekers.

On the global front, European markets were trading mostly in red, even though Eurozone's services sector grew at the fastest pace in three months in February, amid a broad recovery in activity across the member countries due to improved demand and employment gains, while retail sales rebounded at the start of the year driven by a jump in sales over the internet and mail orders. The survey data from IHS Markit showed that the IHS Markit Eurozone Purchasing Managers' Index climbed to a three-month high of 52.8 from 51.2 in January. The flash reading was 52.3. However, Asian markets ended mixed as investors awaited more clarity on Sino-US trade talks and Brexit negotiations.

Back home, cement industry stocks ended higher, buoyed with credit rating agency, Crisil’s report stating that the recent steep hike in cement prices expected to boost operating profitability of cement manufacturers. It added that the price hikes, coupled with falling costs and rising demand growth, will enable 200-250 basis points on-year improvement in margins in the current quarter. Stocks related to the sugar sector remained buzzing with the government’s statement that Sugar mills can sell 24.5 lakh tonne of the sweetener in the open market in the current month.

Finally, the BSE Sensex surged 193.56 points or 0.53% to 36,636.10, while the CNX Nifty was up by 65.55 points or 0.60% to 11,053.00.

The BSE Sensex touched a high and a low of 36,666.47 and 36,456.82, respectively and there were 17 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.49%, while Small cap index was up by 0.97%.

The top gaining sectoral indices on the BSE were Energy up by 1.73%, Consumer Durables up by 1.36%, Telecom up by 1.09%, Power up by 1.07% and PSU up by 0.81%, while Auto down by 0.24% was the lone losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.60%, ICICI Bank up by 2.55%, Reliance Industries up by 2.15%, Vedanta up by 2.00% and HDFC up by 1.32%. On the flip side, Tata Motors down by 2.81%, Axis Bank down by 1.72%, Tata Motors - DVR down by 1.56%, Hindustan Unilever down by 1.38% and HCL Tech down by 1.24% were the top losers.

Meanwhile, Niti Aayog CEO Amitabh Kant said that e-commerce has revolutionized the retail sector in India and it will play a major role in the country's growth story going forward. Further, he stated that driven by the growth in India's retail market, the country's Gross domestic product (GDP) will also witness an increase and result in more job opportunities.

He added e-commerce market has brought a revolution in India's retail sector and nobody can stop it now. According to Kant, India is currently growing at over 7% and if the country has to grow at 9%, then e-commerce market will have to play a major role.

Recently, the Central Statistics Office (CSO) had revised downwards country's growth estimate for the full fiscal (FY19) to 7% from 7.2%. Besides, he noted that traditional retail market and modern retail market (e-commerce) will co-exist in India even as the consumer behaviour is changing.

The CNX Nifty traded in a range of 11,062.30 and 10,998.85. There were 27 stocks advancing against 21 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were BPCL up by 2.84%, Bajaj Finance up by 2.63%, ICICI Bank up by 2.20%, Hindalco up by 2.14% and Vedanta up by 2.09%. On the flip side, Zee Entertainment down by 2.80%, Tata Motors down by 2.40%, Indiabulls Housing Finance down by 1.94%, Axis Bank down by 1.76% and Hindustan Unilever down by 1.43% were the top losers.

European markets were trading mostly in red; France’s CAC dropped 9.53 points or 0.18% to 5,287.99 and Germany’s DAX was down by 24.73 points or 0.21% to 11,596.01, while UK’s FTSE 100 increased 4.36 points or 0.06% to 7,187.79.

Asian markets ended mixed on Wednesday as investors awaited further progress in US-China trade talks and remained focused on the Brexit negotiations. Chinese shares ended up on stimulus hopes after China's state planner said the government would implement measures to boost domestic consumption. Investors shrugged off survey data from IHS Markit showing that China's private sector growth weakened marginally in February with softer growth in services activity. The Caixin composite output index fell to 50.7 in February from 50.9 in January. The services PMI slid to 51.1 from 53.6 a month ago. Meanwhile, Japanese shares ended lower as investors fretted about US-China trade issues and fresh tensions on the Korean Peninsula amid signs that North Korea is restoring part of a missile launch site.