Dalal Street witnesses jubilation; Sensex surpasses 37K mark

Dalal Street witnessed jubilation on Monday, with Sensex and Nifty closing above their 37,000 and 11,150, respectively. The markets made a gap-up opening, as Economic Affairs Secretary Subhash Chandra Garg expressed confidence that fiscal deficit target of 3.4 per cent for 2018-19 would be met as shortfall in indirect tax collection would be compensated by lower expenditure. Adding optimism among traders, Commerce and Industry minister Suresh Prabhu said that the government has set a target of attracting $100 billion in foreign direct investments over the next two years. The minister said the government is conducting a sector analysis for FDI investments and is preparing suitable policies which will help in bringing foreign funds. Investors took encouragement with Railways Minister Piyush Goyal’s statement that the government has brought sustainable changes instead of temporary adjustments. He also said that the government took the fruits of progress to under-developed parts of the country, further highlighting that the country has become perhaps the fastest growing economy in the world from a fragile economy.

Bulls held their grip on the markets throughout the session, as Reserve Bank of India (RBI) reported that the country’s foreign exchange reserves increased by $2.599 billion in the week to March 1 to reclaim the $400 billion-mark. The forex reserves stood at $401.776 billion in the reporting week. In the previous week, the reserves had risen by $944.7 million to $399.217 billion. Some support also came with a report that the central government so far transferred Rs 5,215 crore to over 2.6 crore small and marginal farmers under the PM-Kisan scheme announced in the last month's interim budget. The market participants paid no heed towards the latest data report on public debt which showed that total liabilities of the government increased to Rs 83.40 lakh crore at the end of the December 2018 quarter from Rs 82.03 lakh crore in the previous quarter of the current fiscal.

On the global front, European markets were trading in green, as France's manufacturing output grew for a second straight month in January at the fastest pace in three months, defying expectations for a decline. The preliminary data from the statistical office INSEE showed that manufacturing output grew 1 percent month-on-month in January, while the street was looking for a 0.2 percent fall. Asian markets ended in mostly in green, as traders reacted positively to comments from Fed Chair Jerome Powell that interest rates are currently appropriate and roughly neutral.

Back home, stocks related to banking sector ended higher despite the RBI’s statement that it has imposed penalties worth Rs 71 crore on 36 public, private and foreign banks for non-compliance with various directions on time-bound implementation and strengthening of SWIFT operations. Auto sector stocks too gained, amid a report that from April, up to 10 lakh electric two-wheelers will get subsidy of Rs 20,000 each, while 35,000 fully electric cars can avail benefit of Rs 1.5 lakh under the newly notified FAME-II scheme, reducing their prices for buyers.

Finally, the BSE Sensex gained 382.67 points or 1.04% to 37,054.10, while the CNX Nifty was up by 132.65 points or 1.20% to 11,168.05.

The BSE Sensex touched a high and a low of 37,106.19 and 36,726.39, respectively and there were 26 stocks advancing against 05 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.96%, while Small cap index was up by 1.61%.

The top gaining sectoral indices on the BSE were Telecom up by 5.55%, Energy up by 2.92%, Oil & Gas up by 2.85%, Metal up by 2.50% and Consumer Durables up by 2.32%, while IT down by 0.06% was the only losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 8.08%, Power Grid up by 3.90%, Coal India up by 3.80%, Reliance Industries up by 2.72% and Vedanta up by 2.52%. On the flip side, TCS down by 0.41%, HCL Tech down by 0.39%, NTPC down by 0.23%, Indusind Bank down by 0.21% and Infosys down by 0.13% were the top losers.

Meanwhile, the Confederation of Indian Industry (CII) survey stated that Job creation by the micro, small and medium enterprises (MSMEs) sector saw a growth of 13.9% in the past four years. The survey, that covered 1,05,347 MSMEs of varying sizes, across sectors, located in about 350 industrial centres spread across the country, indicates that micro enterprises were the largest job creators in the past four years and will continue to be so in the next three years.

According to a CII survey, given that the total workforce size according to the Labour Bureau is estimated at 450 million, the overall job additions work out to 13.514.9 million per annum. It noted that the top job generating sectors were hospitality & tourism followed by textiles & apparel and metal products, during the past four years. It added that machinery parts and transport and logistics were the next significant job creators.

The report showed that in terms of states, Maharashtra, Gujarat and Telangana were the largest job creators, while in case of exporters, Maharashtra, Tamil Nadu and Telangana topped. It also noted that there is an expectation of higher growth on employment for the next three years. It pointed out that this optimism emanates from the fact that government initiatives like the 2 percent interest subvention given to all MSMEs and trade receivables e-discounting system (TReDS) would drive future growth leading to more employment.

The CNX Nifty traded in a range of 11,180.90 and 11,059.85. There were 42 stocks advancing against 08 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 8.42%, HPCL up by 5.54%, BPCL up by 5.31%, Eicher Motors up by 4.79% and Bharti Infratel up by 4.34%. On the flip side, NTPC down by 0.95%, TCS down by 0.52%, Zee Entertainment down by 0.52%, HCL Tech down by 0.51% and Tech Mahindra down by 0.51% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 71.18 points or 1% to 7,175.49, France’s CAC added 1.30 points or 0.02% to 5,232.52 and Germany’s DAX was up by 11.52 points or 0.1% to 11,469.36.

Asian markets ended on a mixed note on Monday as global growth worries offset hopes for policy support from China. US job growth almost halted in February and new bank loans in China fell sharply last month, adding to concerns over cooling global growth. Investors also awaited a crucial vote on UK Prime Minister Theresa May's revised Brexit deal on Tuesday for directional cues. Chinese shares ended higher after central bank governor Yi Gang said Beijing would not use the yuan exchange rate as a tool to boost exports or ease trade frictions. Meanwhile, Japanese shares bounced back from four days of losses as investors looked ahead to the Bank of Japan (BoJ) policy meeting on March 14-15.