Bulls continue to roar on Dalal Street

Bulls continued to roar on Dalal Street on Wednesday’s trading session, with Sensex and Nifty closing higher by around half a percent. The start of the day was firm, amid reports that the Department for Promotion of Industry and Internal Trade (DPIIT) has kick-started an exercise to relax India’s foreign direct investment (FDI) norms. The department held an inter-ministerial meeting to discuss further opening up in sectors, especially where 100% FDI is not allowed on the automatic route. The street got comfort, after Finance Minister Nirmala Sitharaman exhorted India Inc to expand CSR reach to poor states like Jharkhand, Chattisgarh, Bihar and North East region.

Indices traded with traction during whole day, aided with a report that the finance ministry & regulators are reviewing the possibility of scrapping the dividend distribution tax. It is also considering rationalisation of the long-term capital gains taxation structure by classifying three asset classes against six at present. However, traders were seen taking a note of a private report that following the surprise move to cut corporate taxes last month, speculation is high that a reduction in personal income taxes is on the cards next in India. With the all-in corporate tax rate at 25 per cent, it is likely that personal income tax rates, which are at 30 per cent plus levels, will also be lowered, surcharges notwithstanding.

On the global front, European markets were trading in red, even after France's economy expanded at a steady pace in the third quarter. The first estimate from the statistical office Insee showed that gross domestic product climbed 0.3 percent sequentially, the same pace of growth as seen in the second quarter. Asian markets ended mixed, despite retail sales in Japan climbed 9.1 percent on year in September, exceeding expectations for an increase of 6.0 percent following the 1.8 percent gain in August. On a seasonally adjusted monthly basis, retail sales spiked 7.1 percent - again topping expectations for 3.5 percent and up from 4.6 percent in the previous month.

Back home, oil & gas sector stocks ended higher, after Prime Minister Narendra Modi said that India will invest a massive $100 billion in oil & gas infrastructure to meet energy needs of an economy that is being targeted to nearly double in five years. Further, stocks related to telecom industry also gained, as the Department of Telecommunications said that the government has formed a committee of secretaries to explore a financial bailout package for the telecom sector by lowering spectrum charges as well as ending the era of free mobile phone calls & dirt cheap data as companies look at the government for avoiding payment of thousands of crores of rupees in overdue statutory levies.

Finally, the BSE Sensex gained 220.03 points or 0.55% to 40,051.87, while the CNX Nifty was up by 57.25 points or 0.49% to 11,844.10.

The BSE Sensex touched a high and a low 40,178.12 and 39,805.11, respectively and there were 19 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were PSU up by 1.62%, IT up by 1.47%, TECK up by 1.35%, Oil & Gas up by 1.31% and FMCG up by 1.17%, while Consumer Durables down by 0.98%, Realty down by 0.92%, Metal down by 0.32%, Auto down by 0.19% and Consumer Disc down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.37%, TCS up by 2.63%, ITC up by 2.43%, Bharti Airtel up by 2.31% and Sun Pharma up by 1.90%. On the flip side, Yes Bank down by 2.41%, Maruti Suzuki down by 2.13%, Indusind Bank down by 1.49%, ICICI Bank down by 1.36% and Bajaj Finance down by 1.32% were the top losers.

Meanwhile, In order to harmonized growth and development of decentralized power loom sector of the country, the Textiles Ministry has invited proposals from evaluating agencies, to study and assess the performance of schemes available in the sector.

The Office of Textile Commissioner floated an expression of interest-cum-request for proposal to select an evaluating agency to assess the three schemes -- PowerTex India, Converged Group Insurance, and Revised Comprehensive Powerloom Cluster Development Scheme -- that are in place till March 2020.

The selected agency will assess the impact of the schemes with respect to the achievement of objectives and outcomes. The evaluation will be also done on the factors like the contribution of the schemes to the growth of power loom sector either directly or by way of creating a leverage of growth in terms of increase in production, improvement in quality and cost of production, reduction in wastage, market improvement, employment generation, and social security, among others.

The CNX Nifty traded in a range of 11,883.95 and 11,784.45. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 6.32%, Grasim Industries up by 3.55%, SBI up by 3.47%, TCS up by 2.88% and ITC up by 2.35%. On the flip side, Bharti Infratel down by 5.25%, Yes Bank down by 3.61%, Cipla down by 2.09%, Maruti Suzuki down by 2.06% and Dr Reddy’s down by 1.87% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 13.41 points or 0.18% to 7,292.85 and Germany’s DAX fell 29.46 points or 0.23% to 12,910.16, while France’s CAC was up by 8.40 points or 0.15% to 5,748.54.

Asian markets ended mixed on Wednesday as investors were cautious about a possible delay in Sino-US trade deal. Investors are looking ahead to an interest rate decision from the US Federal Reserve. The Federal Open Markets Committee (FOMC) meets later today and is widely expected to cut rates by 25 basis points for the third time this year. Investors will also watch the Bank of Japan’s policy decision on Thursday, which is expected to be a close call on whether to unleash more stimulus or hold fire for now. Japanese shares ended lower as the yen rose slightly after the release of robust retails sales data showing that retail sales in Japan climbed an annual 9.1 percent in September following the 1.8 percent gain in August.