Post Session: Quick Review

Extending their northbound journey for fifth straight session, Indian equity benchmarks ended Thursday’s session with a gain of over a percent. Strong buying activity which took place during second half of the day mainly helped markets to end the session near intraday high levels, with Sensex settling above crucial 39,000 mark. Key bourses made cautious start with a report that the Securities and Exchange Board of India (Sebi) is planning to further tighten rules for participatory notes (P-notes), offshore derivative instruments issued by brokers to foreign investors not registered in the country. After that, markets traded flat with positive bias, as traders took some support with Finance minister Nirmala Sitharaman’s statement that more reforms are on the anvil this fiscal to boost growth as fresh economic data and subdued corporate earnings point to a deeper economic downturn.

Markets saw a strong relief rally in the second half of the day, taking support from Union Finance Minister Nirmala Sitharaman’s statement that Prime Minister Narendra Modi’s vision of making India a $5-trillion economy and a global economic powerhouse by 2024-25 is ‘challenging’ but ‘realisable’ and underlined that more reforms are on the anvil before the end of the fiscal year. Investors also cheered with a report that the digital payment system that has been developed in India not only allows big tech companies to participate in it but also has convenience, ease of use, low cost and financial inclusion. Besides, traders took a note of report that Chief Economic Advisor (CEA) K V Subramanian called upon the industry to start making investments, stressing that the fundamentals of Indian economy are ‘very very strong’. He noted that fundamentals of the economy have not changed and it would be back on the 7-8 percent growth path.

On the global front, Asian markets ended mostly in red amid a report that there is still a ways to go before the U.S. and China finalize a 'phase one' limited trade deal. European markets were trading in green, helped by strong earnings from Swedish telecoms gear maker Ericsson as signs of continuing political barriers to a Brexit deal hit domestically-focused UK firms. Back home, stocks related to Telecom sector edged lower despite a report stating that the government is considering a two-year holiday from spectrum payments, a longer payment tenure and lower rates of interest in order to revive the stressed telecom sector. Realty sector stocks were in focus, amid report that the real estate market sentiment index has declined to the level seen during demonetisation and is expected to remain pessimistic for next six months, despite several measures taken by the government and RBI to boost demand in the sector.

The BSE Sensex ended at 39038.36, up by 439.37 points or 1.14% after trading in a range of 38557.43 and 39104.69. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.81%, while Small cap index was up by 0.91%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 3.19%, Consumer Discretionary Goods & Services up by 1.88%, Bankex up by 1.55%, FMCG up by 1.35% and Energy up by 1.34%, while Telecom down by 0.20% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 15.31%, Tata Motors - DVR up by 11.35%, Tata Motors up by 10.65%, Indusind Bank up by 5.14% and SBI up by 3.63%. (Provisional)

On the flip side, HCL Technologies down by 0.70%, TCS down by 0.70%, Power Grid down by 0.65%, Vedanta down by 0.63% and ONGC down by 0.42% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth Finance Minister Nirmala Sitharaman has said that the government’s vision of making India a $5 trillion economy and a global economic powerhouse by 2024-25 is ‘challenging’ but ‘realisable’ and highlighted that more reforms are on the anvil before the close of the fiscal year. She added that Indian economy has been on growth trajectory even since 2014. She also emphasised that a $5 trillion economy will make India a global economic powerhouse moving it from the 7th to 3rd position in terms of current dollar exchange rate.

In order to become a $5 trillion economy, she said ‘India's GDP needs to go faster than what we grew at an average of 7.5% in the last five years. That's a matter of fact statement. Inflation needs to be at 4% to ensure commensurate increase in purchasing power.’ She said inflation in the last five years was 4.5% and has been on a declining path to reach 3.4% in 2018-19. She stressed that fixed investment rate needs to increase from 29% to 36% in the course of the next five years, with some depreciation of the rupee.

Sitharaman said that in July 2019 when she presented the first budget of the second term of the Modi government, India's GDP had decelerated in four consecutive quarters. She said ‘Yet we projected the GDP to grow at 7% in 2019-20, slightly higher than the 6.8% realised in 2018-19. Even when our GDP decelerated in the fifth successive quarter, we did not revise downwards our projections as some institutions around the world have already done.’ She said India has just entered the second half of fiscal year 2019-20 and already implemented a series of reforms, with more on the anvil before the close of the year.

The CNX Nifty ended at 11583.40, up by 119.40 points or 1.04% after trading in a range of 11439.65 and 11599.10. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 15.35%, Tata Motors up by 11.32%, Eicher Motors up by 7.18%, Indusind Bank up by 5.08% and SBI up by 3.48%. (Provisional)

On the flip side, TCS down by 0.82%, Grasim Industries down by 0.80%, HCL Tech. down by 0.78%, Vedanta down by 0.70% and Ultratech Cement down by 0.59% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 37.91 points or 0.53% to 7,205.86, France’s CAC rose 28.46 points or 0.5% to 5,725.36 and Germany’s DAX was up by 118.16 points or 0.93% to 12,788.27.

Asian markets ended mostly lower on Thursday as final breakthrough on Brexit deal failed to emerge ahead of European Union leaders’ two-day summit in Brussels starting today. Japanese shares ended down as investors awaited more clarity on US-China trade talks and Brexit negotiations. Meanwhile, Chinese shares ended on a flat note as investors gave muted reaction to the Hong Kong protests and reports suggesting that China would remove business restrictions on foreign banks, brokerages and fund management firms. Though, Hong Kong shares led gains after the city’s leader Carrie Lam announced on Wednesday measures to ease a housing shortage and calm anti-government protests.