Bulls tighten grip on Dalal Street; Sensex breaches 38K mark

Extending their gains for fifth straight session, Indian equity benchmarks ended Friday’s trade with a gain of around three fourth of a percent, with frontline gauges surpassing their crucial 38,000 (Sensex) and 11,400 (Nifty) levels. Sentiments remained upbeat throughout the session and markets started the day with a decent gains with traders taking encouragement with private report that the Reserve Bank of India's (RBI) $5 billion plan to swap rupees for dollars with domestic banks will help achieve its twin objectives of pushing interest rates down while also preventing a sharp appreciation in the rupee. Markets extended northward journey, as sentiment improved further with Commerce Secretary Anup Wadhawan’s statement that India's exports are likely to touch an all-time high of $330 billion in the current fiscal ending March 31 (FY19), braving global challenges such as protectionist measures. He added that the country’s engineering exports have grown significantly in recent years, notwithstanding major global challenges.

Sentiments also remained jubilant with EEPC India-Deloitte strategy paper stating that India can achieve a three-fold 'aspirational' increase in its engineering exports to reach $200 billion by 2025, if concerted efforts are made by the government and industry to develop a conducive ecosystem, and ensuring inputs at competitive prices. Traders took note of the RBI’s statement that financial sector regulators discussed ways to address challenges pertaining to the quality of credit ratings and other issues concerning the economy. It added that the sub-committee reviewed the major developments on the global and domestic fronts that impinge on the financial stability of the country. However, traders trimmed some of their gains in last leg of trade, as investors remain little concerned with principal economic advisor’s report that the economic growth during the UPA era was ‘not bad’, but ‘the system was out of control’. The economy then faced problems of rising soaring inflation, widening and current account fiscal deficit.

Global cues too remained supportive with all the European markets trading in green in early deals as Brexit-related worries eased and investors remained hopeful for a US-China trade deal. Asian markets ended mostly in green, as traders took encouragement after the Bank of Japan kept its monetary policy steady.

Back home, Niti Aayog Vice Chairman Rajiv Kumar has underlined the need to mobilise funds from all sources especially corporates to achieve the Sustainable Development Goals (SDGs). Kumar further said the focus should be on conscious capitalism wherein corporates go beyond chasing bottomline and focus on ensuring maximum social return. Meanwhile, stocks related to banking sector remained on buyers’ radar with ICRA’s report that after four years of consecutive losses, the state run banks are likely to report a profit of Rs 23,000-37,000 crore in the next financial year, with their gross non-performing loans declining to 8.1-8.4 percent by March 2020. Insurance industry stocks edged higher with IRDAI data showing that India’s life insurance industry witnessed a rise of 32.7 per cent in its collective new premium income at Rs 18,209.50 crore during February 2019.

Finally, the BSE Sensex rose 269.43 points or 0.71% to 38,024.32, while the CNX Nifty was up by 83.60 points or 0.74% to 11,426.85.

The BSE Sensex touched a high and a low of 38,254.77 and 37,760.23, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in mixed; the BSE Mid cap index gained 0.55%, while Small cap index was down by 0.34%.

The top gaining sectoral indices on the BSE were Power up by 1.94%, Utilities up by 1.92%, PSU up by 1.82%, IT up by 1.75% and Bankex was up by 1.59%, while FMCG down by 1.79%, Telecom down by 1.55%, Energy down by 0.42% and Basic Materials was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.31%, ONGC up by 2.84%, Power Grid Corporation up by 2.61%, TCS up by 2.59% and NTPC up by 2.50%. On the flip side, Hindustan Unilever down by 2.23%, Yes Bank down by 1.92%, Bharti Airtel down by 1.71%, ITC down by 1.52% and Reliance Industries down by 1.39% were the top losers.

Meanwhile, financial sector regulators have discussed ways to address challenges pertaining to the quality of credit ratings and other issues concerning the economy. Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA), along with senior officials of the finance ministry, came up with key issues facing the economy at the meeting of the sub-committee of the Financial Stability and Development Council (FSDC) chaired by RBI Governor Shaktikanta Das.

The sub-committee reviewed the major developments on the global and domestic fronts that impinge on the financial stability of India. It also said that the panel discussed ways to address challenges pertaining to the quality of credit ratings; and inter-linkages between housing finance companies and housing developers.

The panel also deliberated on the interlinking of various regulatory databases and the National Strategy for Financial Inclusion. Further, the sub-committee reviewed the functioning of state-level coordination committee (SLCCs) in various states and Union territories, activities of its various technical groups, and a thematic study on financial inclusion and financial stability.

The CNX Nifty traded in a range of 11,487.00 and 11,370.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 4.65%, Indian Oil Corporation up by 3.21%, HPCL up by 2.94%, Power Grid Corporation up by 2.88% and Wipro up by 2.67%. On the flip side, Hindustan Unilever down by 2.09%, Yes Bank down by 1.92%, Reliance Industries down by 1.33%, ITC down by 1.32% and Bharti Airtel down by 1.30% were the top losers.

All the European markets were trading in green; UK’s FTSE 100 rose 29.96 points or 0.42% to 7,215.39 and France’s CAC gained 29.20 points or 0.55% to 5,378.98 and Germany’s DAX was up by 60.46 points or 0.52% to 11,647.93.

Asian markets ended higher on Friday after UK lawmakers backed delaying the Brexit process and Chinese Premier pledged support for the slowing economy during his annual news conference at the end of the National People's Congress. Chinese shares ended higher as Chinese Premier Li Keqiang said the country could use reserve requirements and interest rates to prevent a sharper deceleration in the world's second-largest economy. Further, Japanese shares ended higher after the Bank of Japan left its monetary stimulus program unchanged, as widely expected, but offered a relatively weak assessment of the economy.