Markets resume gaining rally; Sensex soars over 50%

Indian equity markets resumed the gaining rally on Wednesday, with Sensex and Nifty ending higher by around 225 and 50 points, respectively. After a negative start, key indices remained lackluster during morning deals, amid a private report that the government may discontinue spending on 200-odd schemes in order to stick to its fiscal deficit target of 3.3 percent. Domestic sentiments remained pessimistic, as Fitch Solutions raised India's fiscal deficit forecast to 3.6 percent of the GDP for this fiscal year, from 3.4 percent previously, due to weak revenue collections resulting from sluggish economic growth and government's sweeping corporate tax rate cut.

However, markets staged sharp recovery in noon deals to settle in positive terrain, aided with Finance Minister Nirmala Sitharaman’s statement that the government will soon use its strong electoral mandate to usher in the next wave of reforms, and not to miss the bus this time. Traders took encouragement with Nasscom’s statement that with the addition of more than 1,300 startups this year so far, India continues to reinforce its position as the third-largest startup ecosystem in the world. Adding comfort, Commerce and Industry Minister Piyush Goyal said that India’s services sector has huge potential to generate job opportunities and push country’s gross domestic product growth.

On the global front, European markets were trading in green, after Germany's factory orders grew more than expected in September on rising domestic and foreign demand. The data from Destatis revealed that factory orders grew 1.3 percent month-on-month, reversing a 0.4 percent fall in August. Orders were forecast to climb 0.5 percent. Asian markets ended in green, as Indonesia's economy expanded as expected in the third quarter. The data from the statistical bureau said that gross domestic product grew 5.02 percent year-on-year in the third quarter versus 5.05 percent expansion seen in the second quarter.

Back home, the metal sector stocks ended higher, after Union Minister Dharmendra Pradhan said that steel consumption in India is set for a quantum jump and investors should come forward and become a partner in the country's growth story. Further, stocks related to the sugar industry remained in watch, as industry body ISMA said that India's sugar output is estimated to be at a three-year low of 26 million tonnes in the ongoing marketing year on account of possible fall in cane acreage in Maharashtra and Karnataka as well as diversion to ethanol manufacturing.

Finally, the BSE Sensex gained 221.55 points or 0.55% to 40,469.78, while the CNX Nifty was up by 48.85 points or 0.41% to 11,966.05.

The BSE Sensex touched a high and a low 40,606.91 and 40,037.53, respectively and there were 16 stocks advancing against 14 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.15%, while Small cap index was down by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 2.59%, Bankex up by 1.39%, Metal up by 0.72%, IT up by 0.47% and Industrials up by 0.40%, while Consumer Durables down by 5.30%, Telecom down by 2.69%, Energy down by 0.68%, Consumer Disc down by 0.66% and PSU down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.64%, Infosys up by 2.37%, HDFC up by 1.78%, Indusind Bank up by 1.74% and HDFC Bank up by 1.42%. On the flip side, Bharti Airtel down by 3.31%, Reliance Industries down by 1.07%, Bajaj Finance down by 1.04%, ONGC down by 1.03% and Maruti Suzuki down by 1.00% were the top losers.

Meanwhile, amid ongoing Punjab & Maharashtra Cooperative (PMC) Bank crisis, the Finance Minister Nirmala Sitharaman has reiterated the government commitment to rein in cooperative banks by bringing in necessary legislative changes.

Finance Minister noted that the government is not coming up with a complete solution immediately but it is moving towards better supervision and regulation for cooperative banks. Further, she underlined that the government and RBI discussed the ways at the meetings, to make sure that financial institutions are the best possible manner so that the depositors have confidence in parking their money in banks.

Besides, Nirmala Sitharaman said that the government is also having discussions on hiking the deposit insurance from Rs 1 lakh and that a decision will be taken after proper due diligence, further adding that the government would not like any other institution to fail like the Jet Airways or IL&FS and ruled out any asset quality review of NBFCs.

The CNX Nifty traded in a range of 12,002.90 and 11,850.25. There were 24 stocks advancing against 25 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 3.02%, ICICI Bank up by 2.49%, Infosys up by 2.36%, HDFC up by 1.82% and Indusind Bank up by 1.81%. On the flip side, Titan down by 10.09%, Bharti Airtel down by 3.44%, ONGC down by 1.26%, Bajaj Finserv down by 1.25% and Maruti Suzuki down by 1.07% were the top losers.

European markets were trading mostly in green; DAX gained 4.67 points or 0.04% to 13,153.17 and CAC was up by 5.65 points or 0.10% to 5,852.54, while FTSE was down by 8.59 points or 0.12% to 7,379.49.

Asian markets ended mostly higher on Wednesday. Japanese shares ended higher as the minutes of the Bank of Japan's October monetary policy meeting kept easy money policy on the cards and shrugged off survey data showing that Japan's private sector contracted for the first time in more than three years in October. Though, some gains were capped by cautious trading after reports showed China is pushing US President Donald Trump to remove more tariffs on about $125 billion worth of Chinese goods imposed in September as part of the ‘phase one’ trade deal.