Bulls make comeback; Sensex reclaims 39k mark

Bulls made a roaring comeback on Wednesday’s trading session, with Sensex and Nifty closing with gains of more than a percent each. After a positive start, the markets remained in green terrain throughout the day, as the Reserve Bank of India (RBI) decided to infuse more liquidity into market. It will buy government securities under Open market operations (OMOs) for an aggregate amount of Rs 25,000 crore in May 2019 through two auctions of Rs 12,500 crore each. But, gains were limited, amid credit rating agency, Care Ratings’ latest report warning that a spike in crude oil prices by 10 percent owing to the US sanctions on Iranian crude exports can result in a 0.40 percent widening of the current account deficit (CAD), which can subsequently play out into a 3-4 percent fall in the rupee and also push up inflation by 0.24 percent.

Further, key indices gained traction in the dying hours of the trade, buoyed by Fitch Ratings’ report indicating that the RBI is the first central bank in the Asia-Pacific region to begin an explicit interest rate easing cycle buoyed by benign food inflation and easier global financial condition.  Some support also came with a report that around 3.10 crore small farmers have so far received the first tranche of Rs 2,000 each under the PM-Kisan scheme and 2.10 crore peasants have got the second installment as well, costing Rs 10,500 crore to the exchequer. The market participants took note of another report that the Ministry of Corporate Affairs plans to start gathering 'primary data' from persons who have put in their money in chit funds and deposit-taking schemes, amid continuing efforts to clamp down on illicit fundraising activities.

On the global front, European markets were trading in red, as Germany's business confidence unexpectedly weakened in April to its lowest level in three years. The survey data from the ifo Institute showed that the ifo business climate indicator dropped to 99.2 from an upwardly revised 99.7 in March. The latest reading was the lowest since April 2016, when the score was 99. Asian markets ended mixed, as Malaysia's consumer prices rose annually in March after falling in the previous month. As per figures from the Department of Statistics, the consumer price index rose 0.2 percent year-on-year in March, partly reversing a 0.4 percent fall in February.

Back home, stocks related to the microfinance industry remained in focus, with ICRA’s latest report stating that the microfinance industry (MFI) is expected to grow at 20-22% in the current fiscal. The rating agency estimated Rs 3,500-4,700 crore of capital requirement for the industry over the next three years. Further, power sector stocks also remained in limelight, with rating agency ICRA in its another report that it has estimated 7-7.5 GW solar power capacity addition during the current financial year, which includes 1 GW of rooftop solar.

Finally, the BSE Sensex gained 489.80 points or 1.27% to 39,054.68, while the CNX Nifty was up by 150.20 points or 1.30% to 11,726.15.

The BSE Sensex touched a high and a low of 39,095.35 and 38,571.00, respectively and there were 23 stocks advancing against 08 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.43%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.32%, Energy up by 2.01%, Telecom up by 1.83%, TECK up by 1.45% and PSU up by 1.39%, while Auto down by 0.29% was the lone losing index on BSE.

The top gainers on the Sensex were HCL Tech. up by 3.45%, Indusind Bank up by 3.05%, ONGC up by 2.74%, Bharti Airtel up by 2.62% and Yes Bank up by 2.43%. On the flip side, Tata Motors down by 3.03%, Tata Motors - DVR down by 2.96%, Maruti Suzuki down by 0.77%, Hero MotoCorp down by 0.60% and Coal India down by 0.49% were the top losers.

Meanwhile, India’s pharmaceutical exports have reported an increase of 11 percent to $19.2 billion during the financial year 2019, on the back of higher demand in regions like North America and Europe. According to a commerce ministry data, pharma exports fetched $17.27 billion in FY18 and $16.7 billion in the previous fiscal. It highlighted that North America constitutes over 30 percent of Indian pharma exports followed by Africa and the European Union with 19.37 percent and 15.92 percent respectively.

Chinese market is also gradually opening up and the government is working to push India's exports there as it holds huge potential. The other important destinations include South Africa, Russia, Nigeria, Brazil and Germany, where exports are registering growth. The sector accounted for about 6 percent of the country's total exports of $331 billion in 2018-19. It is one of the top five sectors in the exports segment.

Generic drugs form the largest segment of the Indian pharmaceutical sector holding 75 percent of the market share by revenue. India supplies 20 percent of global generic medicines in terms of volume, making the country the largest provider of generic medicines globally. Over 55 percent of India’s exports go to highly regulated markets. Higher growth in outbound shipments helps create employment opportunities, earn foreign exchange and boost economic activities.

The CNX Nifty traded in a range of 11,740.85 and 11,578.85. There were 42 stocks advancing against 08 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 5.57%, BPCL up by 3.75%, HCL Tech. up by 3.54%, IndusInd Bank up by 3.19% and ONGC up by 2.81%. On the flip side, Tata Motors down by 3.19%, Hero MotoCorp down by 0.84%, MARUTI down by 0.77%, Coal India down by 0.59% and Cipla down by 0.53% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 24.32 points or 0.32% to 7,498.75 and France’s CAC was down by 5.72 points or 0.1% to 5,585.97, while Germany’s DAX was up by 68.93 points or 0.56% to 12,304.44.

Asian markets ended mixed on Wednesday as investors digested upbeat corporate earnings results from the US and looked forward to further progress in US-China trade talks. According to US Press Secretary Sarah Huckabee Sanders, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will head to Beijing next week for talks that start on April 30. Following those talks, Chinese Vice Premier Liu He will lead a delegation to Washington for further discussions that begin on May 8. Japanese shares ended lower as investors braced for a flurry of earnings reports due out on Friday and the 10-day Golden Week holiday starting this weekend. Meanwhile, Chinese shares ended largely unchanged after the country's central bank extended 267.4 billion yuan ($39.8 billion) to some commercial banks to support liquidity in the banking system.