Bulls make come back on Dalal Street; Markets gain over 1%

Indian equity bourses gained momentum on Thursday to settle in green terrain. Key indices started on a positive note, after the Employees' State Insurance Corporation (ESIC) in its latest payroll report showed that around 14.24 lakh jobs were created in July 2019, higher than 12.49 lakh in the previous month. Adding more relief, Union minister Som Parkash said that the Centre is determined to bring economic growth to 7-8% at the earliest, asserting that the government has taken many steps to boost the economy. Separately, the SEBI eased the regulatory framework for foreign portfolio investors (FPIs) and simplified KYC requirements for them and permitted them to carry out off-market transfer of securities.

Key benchmarks remained positive throughout the trading day, amid a private report stating that the Indian economy is expected to start its recovery from later part of this fiscal thanks to the initiatives taken by the Reserve Bank for policy rate transmission and steps by the government to boost growth. Domestic sentiments also remained in optimistic mood, even though the United Nations Conference on Trade and Development (UNCTAD) in its Trade and Development 2019 report projected India’s gross domestic product (GDP) growth at 6% for 2019 from 7.4% in 2018. It said slowdown in growth rate is attributed to a sharp fall to 5.8% in the first quarter of 2019.

On the global front, European markets were trading in green, as German consumer sentiment is set to improve in October as stimulus measures announced by the European Central Bank boosted the propensity to buy. The survey data from market research group GfK showed that the forward-looking consumer sentiment index rose to 9.9 in October from 9.7 in September. Asian markets ended in green, despite Singapore's industrial production declined at a faster-than-expected rate in August. The data from the Economic Development Board showed that manufacturing output dropped 8.0 percent year-on-year in August, following a 0.1 percent fall in July.

Back home, telecom sector stocks ended higher, even though the Telecom Regulatory Authority of India, (TRAI) in its latest report said that gross revenue of telecom operators fell 7.13 per cent to Rs 2,37,417 crore in 2018 from Rs 2,55,655 crore in 2017, while licence fee and spectrum charges that the government collects from them slipped 10.29 per cent and 17.7 per cent, respectively, during the year. Further, banking stocks also gained, despite rating agency ICRA said that public sector banks’ (PSBs) profitability and return on assets (RoA) may remain low during the current financial year (FY20) on the back of continued provisioning on existing and fresh bad loans.

Finally, the BSE Sensex gained 396.22 points or 1.03% to 38,989.74, while the CNX Nifty was up by 131.00 points or 1.15% to 11,571.20.

The BSE Sensex touched a high and a low of 39,158.07 and 38,676.11, 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 0.92%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Metal up by 4.20%, Realty up by 2.69%, Oil & Gas up by 2.53%, Auto up by 2.49% and PSU up by 2.09%, while IT down by 0.55% and TECK down by 0.26% were the only losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 6.47%, Mahindra & Mahindra up by 6.00%, ONGC up by 4.15%, ICICI Bank up by 4.05% and Tata Steel up by 3.85%. On the flip side, Yes Bank down by 4.93%, Infosys down by 1.28%, Hindustan Unilever down by 0.67%, HCL Tech. down by 0.62% and HDFC down by 0.26% were the top losers.

Meanwhile, NITI Aayog CEO Amitabh Kant has said that the government is determined to take India back to a high trajectory growth rate of 8-9 percent and the real challenge before the country is to sustain that growth. His comments come at a time when the government has taken a number of measures to boost the economy that has slipped to 6-year low of 5% in April-June quarter of 2019-20.

Kant said ‘but if we have to do this for the next three decades, energy (sector) has to be at the centre of this economical growth,' adding that no country in the world has been able to grow for long periods of time without focusing on energy and managing it efficiently. He stated that India's current energy consumption per capita was only about one third of the world average, and if India aspires to be a developed nation its per capita energy consumption should increase many folds.

NITI Aayog CEO further said ‘though we are comparatively an energy efficient economy, the energy requirement per unit of GDP is much lower than the world average and we would be taking all measure to increase this efficiency further.’ He also said several measures have been taken by the government to revive the sagging economy. He added that the RBI has brought down repo rate to the tune of 110 basis points this year and the finance minister has undertaken four economic boosters.

The CNX Nifty traded in a range of 11,610.85 and 11,466.35. There were 41 stocks advancing against 09 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 6.88%, Mahindra & Mahindra up by 5.67%, Coal India up by 5.40%, IOC up by 4.69% and Zee Entertainment up by 4.66%. On the flip side, Yes Bank down by 4.66%, Indiabulls Housing Finance down by 3.35%, Infosys down by 1.02%, Hindustan Unilever down by 0.71% and Wipro down by 0.67% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 81.67 points or 1.12% to 7,371.66, France’s CAC rose 36.71 points or 0.66% to 5,620.51 and Germany’s DAX was up by 52.17 points or 0.43% to 12,286.35.

Asian markets ended mostly higher on Thursday as easing concerns about US political risks after US President Donald Trump's comments suggesting a trade deal with China could happen sooner than expected. Japanese shares gained slightly after the US and Japan have signed a limited trade deal, under which Japan will open new markets to about $7 billion in US agricultural products. Though, some positive mood faded and Chinese shares ended lower as Trump's repeated mixed messages about trade negotiations caused investors to curb their enthusiasm.