Rally continues on Dalal Street for 2nd straight day; Sensex up by 0.42%

Rally continued on the Dalal Street for the second straight day on Thursday. The start of the day was fabulous, as the Union Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business. Firm trade persisted during the whole day, also because of positive cues from global markets.

Key equity indices traded at their intraday fresh highs in the second half of the trading session, taking support with Former President Pranab Mukherjee’s statement that ‘certain things’ that are happening would have its impact and he was not worried over the economic slowdown. Mukherjee, further said there is nothing wrong in public sector banks needing capital infusion. Market participants remained optimistic ahead of GST Council meeting, headed by Finance Minister Nirmala Sitharaman, which is schedule on December 18 in the backdrop of lower-than-expected GST collection and pending compensation to many states.

On the global front, European markets were trading in green, as Germany's inflation rate remained stable, as initially estimated, in November at its lowest level since early 2018. The final data from the Federal Statistical Office showed that the consumer price index climbed 1.1 percent year-on-year, the same rate as seen in October. Asian markets ended in green terrain, even though Malaysia's industrial production growth slowed in October driven by the weakness in mining. The data from the Department of Statistics showed that Industrial production rose 0.3 percent year-on-year in October, slower than 1.7 percent increase in September.

Back home, the banking sector stocks ended higher, after the Union Cabinet approved a partial credit guarantee scheme for public sector banks (PSBs) to purchase high-rated pooled assets from financially sound NBFCs and housing finance companies. Further, stocks related to non-banking finance companies (NBFCs) remained in watch, as rating agency, CRISIL in its latest report said that asset growth of NBFCs and housing finance companies is expected to hit a decadal low of 6-8 percent during current fiscal year (FY20) from a high 15 percent last fiscal year, amid falling growth rates, de-risking of loan books and funding constraints.

Finally, the BSE Sensex gained 169.14 points or 0.42% to 40,581.71, while the CNX Nifty was up by 61.65 points or 0.52% to 11,971.80.

The BSE Sensex touched high and low of 40,712.65 and 40,490.69, respectively and there were 23 stocks advancing against 08 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Metal up by 2.41%, PSU up by 1.53%, Industrials up by 1.47%, Auto up by 1.32% and Bankex up by 1.25%, while IT down by 1.53%, TECK down by 1.41% and Telecom down by 0.65% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 7.23%, Tata Motors up by 7.17%, Yes Bank up by 5.96%, Vedanta up by 3.86% and Tata Steel up by 3.29%. On the flip side, Infosys down by 2.63%, ONGC down by 1.68%, HCL Tech. down by 1.51%, TCS down by 1.20% and Bharti Airtel down by 0.95% were the top losers.

Meanwhile, in order to support the unserved segments of renewable energy and the scaling up of new clean energy technologies, Secretary for the Ministry of New and Renewable Energy (MNRE), Anand Kumar has said that the Indian Renewable Energy Development Agency (IREDA) is planning to set up a dedicated ‘Green Window’.

Kumar further noted that renewable energy is increasingly cheaper and better for the strategic interests of India and the IREDA Green Window would provide a significant boost to the renewable energy market. He also said that as India moves towards becoming a $5 trillion economy, the country’s aim to install 450 gigawatts (GW) of renewable energy capacity would be one of the major drivers of its economic growth.

Meanwhile, an allocation of approximately $20 million is being considered for the Green window, with plans of leveraging $80 million from other agencies to establish a facility of $100 million is envisaged. The seed capital will be used to leverage additional sources of capital from both private domestic banks and international sources.

The CNX Nifty traded in a range of 12,005.50 and 11,934.00. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.86%, Yes Bank up by 5.84%, Vedanta up by 3.72%, Tata Steel up by 3.03% and SBI up by 2.77%. On the flip side, Infosys down by 2.63%, TCS down by 1.91%, ONGC down by 1.56%, HCL Tech. down by 1.43% and Bharti Airtel down by 1.07% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 41.30 points or 0.57% to 7,257.55, France’s CAC increased 25.06 points or 0.43% to 5,885.94 and Germany’s DAX was up by 62.71 points or 0.48% to 13,209.45.

Asian markets ended mostly higher on Thursday after reports showed that US and Chinese negotiators are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase one trade deal. Chinese shares closed higher after US President Donald Trump said trade talks with China were going very well, sounding more positive than, when he said a trade deal might have to wait until after the 2020 US presidential election. Moreover, Japanese shares ended up after Prime Minister Shinzo Abe announced a $120 billion fiscal package to support stalling growth in the world's third-largest economy.