Bourses gain traction on Friday; Sensex ends over 300 points higher

Indian equity bourses gained traction on the last trading day of the week to end at higher note, with Sensex and Nifty gaining over 0.90% each. After a positive start, key indices remained bullish throughout the day, aided by Union Minister Nitin Gadkari’s statement that the government will soon take a call on the recommendations of U K Sinha committee to strengthen micro, small and medium enterprises sector. Traders took encouragement with Union Minister of state for heavy industries and public enterprises, Arjun Ram Meghwal’s statement that the government will do everything to ensure that the economy remains on track and is not weakened so that the country reaches its target of $5 trillion economy.

Markets extended their gains in the second half of the session, on the back of positive cues from global markets. Domestic sentiments remained positive, as Agriculture Minister Narendra Singh Tomar said that the condition of Kharif (summer-sown) crops is good and the country is likely to have bumper production of foodgrains. The street paid no heed towards report that credit rating agency, CARE Ratings revised the India’s Gross domestic products (GDP) estimate downward from 6.7-6.8% earlier to 6.4-6.5% for current financial year (FY20) with the underlying gross value added (GVA) growth of 6.3-6.4% on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20. 

On the global front, European markets were trading in green, despite Germany's industrial production declined unexpectedly in July. The data from Destatis showed that industrial production fell 0.6 percent in July from June, confounding expectations for an increase of 0.3 percent. Nonetheless, the pace of decline slowed from the 1.1 percent fall posted in June. Asian markets ended higher, even though Indonesia's consumer confidence eased slightly in August, but households remained optimistic. The Bank Indonesia said that the consumer confidence index fell to 123.1 from 124.8 in July. Consumers have remained upbeat based on their perception of current economic dynamics and were more optimistic regarding job prospects.

Back home, automobile industry stocks ended higher, after automotive industry body Society of Indian Automobile Manufacturers (SIAM) sought government intervention to help the sector in smooth transition to BS-VI emission norms from April next year, and said that the prospect of abrupt stoppage of manufacturing and sales of BS-IV vehicles overnight posed a monumental challenge.  Further, sugar industry stocks remained in watch, amid reports that sugar prices are expected to rise by 8 percent to Rs 33-34 per kg in sugar season (SS) 2020 following a decline in cane acreage in Maharashtra and parts of Karnataka due to extreme weather conditions.

Finally, the BSE Sensex gained 337.35 points or 0.92% to 36,981.77, while the CNX Nifty was up by 98.30 points or 0.91% to 10,946.20.

The BSE Sensex touched a high and a low of 37,012.98 and 36,727.66, respectively and there were 24 stocks advancing against 07 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.61%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Auto up by 2.54%, Power up by 2.09%, Metal up by 1.91%, Utilities up by 1.75% and Energy up by 1.61%, while Realty down by 0.71% and FMCG down by 0.16% were the only losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.77%, Maruti Suzuki up by 3.61%, Axis Bank up by 3.35%, Tata Motors - DVR up by 3.00% and Tata Steel up by 2.99%. On the flip side, Yes Bank down by 2.42%, Sun Pharma down by 1.63%, HCL Tech. down by 0.86%, TCS down by 0.82% and Hindustan Unilever down by 0.58% were the top losers.

Meanwhile, Power Secretary S.C. Garg has said that there is need to increase private sector investment to create a more robust integrated cross-border power trading market. He also said that India has various sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste, which need to be exploited

Garg has stated that the country has the scope of exporting 75,000 MW of hydro-generated power to resource-deficient neighbouring countries. He also said there is interdependence among the countries in South Asia and it makes commercial sense to cooperate in areas such as jointly exploring resources (particularly Sri Lanka and Myanmar), integrated transmission network and free participation of entities or producers from other countries such as Bhutan and Bangladesh.

He also urged the private sector to invest and jointly cooperate in the 2.5 lakh megawatt potential that exists in the South Asian region and to make dream of 'One World, One Sun One Grid' a reality.

The CNX Nifty traded in a range of 10,957.05 and 10,867.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.87%, Tech Mahindra up by 3.85%, Tata Steel up by 3.43%, NTPC up by 3.28% and Axis Bank up by 3.23%. On the flip side, Indiabulls Housing Finance down by 4.57%, Yes Bank down by 1.94%, Sun Pharma down by 1.57%, Wipro down by 1.51% and HCL Tech. down by 1.34% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 6.54 points or 0.09% to 7,277.71, France’s CAC rose 14.43 points or 0.26% to 5,607.80 and Germany’s DAX was up by 47.99 points or 0.4% to 12,174.77.

Asian markets ended mostly higher on Friday on reports that China and the United States agreed to hold high-level talks in early October in Washington. Hong Kong shares ended up, despite global rating agency Fitch Ratings downgrading Hong Kong's long-term foreign currency issuer default rating. The rating agency observed that ongoing demonstrations have done long-lasting damage to international perceptions about the effectiveness of Hong Kong's governance system and rule of law. Further, Japanese shares closed higher amid comments from Bank of Japan Governor Haruhiko Kuroda suggesting that cutting interest rates further into the negative zone is always an option, while the  yen retreated against the dollar as investors bid up riskier assets.