Record setting rally continues on Dalal Street for second straight day

Record setting rally continued on the Dalal Street for the second straight day on Wednesday, with Sensex and Nifty ending higher by around half a percent. After a firm start, key indices remained positive during the whole day, as the Department of Revenue is eyeing to collect at least Rs 1.10 lakh crore as monthly Goods and Services Tax (GST) collection for the next four months each. Adding some relief, Defence Minister Rajnath Singh said that India is impacted to some extent by the global economic slowdown but expressed confidence that the country will come out of the difficult situation within a short time.

Indices added more gains to their northward rally in second half of the session, aided with Union Minister Nitin Gadkari’s statement that efforts are on to bolster the economy & create five crore jobs. He also said the government is according high priority to the economy but at the same time, security issues are also important & the government cannot work in silos. Investors took note of CII's President Vikram Kirloskar’s statement that the revised corporate tax rates are competitive & its impact will be visible in the next two years. He emphasised that the government listened to the industry 'word by word' on lowering rates.

On the global front, European markets were trading in green, after the euro area trade surplus increased in October as exports advanced from the previous month amid a fall in imports. The data from Eurostat showed that the trade surplus increased to a seasonally adjusted EUR 24.5 billion from EUR 18.7 billion in September. Asian markets ended mixed, as Japan's exports decreased for the 12th consecutive month in November. The official data showed that exports fell 7.9 percent on a yearly basis in November. Exports to the United States decreased 12.9 percent and that to China were down 5.4 percent.

Back home, pharma stocks ended higher, as ratings agency, ICRA said the Indian pharmaceutical industry is expected to grow around 10-12 per cent between FY2019 and FY2022 while maintaining a stable outlook on the sector. Besides, sugar industry stocks also remained in focus, after industry body ISMA said that India's sugar production stood at 4.58 million tonne till December 15 of the ongoing marketing year, down 35 per cent from the year-ago period, owing to sharp fall in output in Maharashtra and Karnataka. Mills had manufactured 7.05 million tonne of sugar in the same period of the 2018-19 marketing year.

Finally, the BSE Sensex gained 206.40 points or 0.50% to 41,558.57, while the CNX Nifty was up by 56.65 points or 0.47% to 12,221.65.

The BSE Sensex touched high and low of 41,614.77 and 41,358.47, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.19%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Metal up by 0.84%, Healthcare up by 0.69%, Realty up by 0.65%, Consumer Disc up by 0.54% and Energy up by 0.52%, while Utilities down by 0.84%, PSU down by 0.82%, Power down by 0.71%, Telecom down by 0.49% and Oil & Gas down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.37%, Sun Pharma up by 2.53%, Asian Paints up by 1.88%, ITC up by 1.70% and HDFC Bank up by 1.58%. On the flip side, Tata Motors - DVR down by 3.18%, Tata Motors down by 3.05%, Hindustan Unilever down by 1.79%, SBI down by 1.79% and Yes Bank down by 1.79% were the top losers.

Meanwhile, International Monetary Fund’s (IMF) Chief Economist Gita Gopinath has said that IMF may cut India's growth estimate significantly in January 2020. She mentioned that the IMF would be reviewing the October estimates in January.  The IMF in its October forecast had projected 6.1 per cent growth for India in 2019 and the same to go up to 7 per cent in 2020. She said ‘if you look at recent incoming data, we would be revising our numbers and come up with numbers in January, and it is likely to be a significant downward revision for India.’ she noted that India has thrown a surprise by being the only emerging market to have had such a show.

Besides, she sounded doubtful about the country achieving $5 trillion GDP target by FY2025, and chose to present her case arithematically.  She said India will have to grow at 10.5 per cent in nominal terms as against 6 per cent in the last six years, and 8-9 per cent in real terms in order to achieve the target. She pitched for the government utilising its massive mandate to bring in land and labour market reforms as essential aspects if India were to achieve its $5 trillion aspiration.

Moreover, she warned that the fiscal situation in India is 'challenging' and the country will certainly breach the 3.4 per cent deficit target. On the fiscal management front, she acknowledged the cut in corporate taxes announced earlier this year, but rued that there was no revenue increasing measure announced in parallel.

The CNX Nifty traded in a range of 12,237.70 and 12,163.45. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.59%, Sun Pharma up by 2.51%, JSW Steel up by 2.07%, Asian Paints up by 1.98% and HDFC Bank up by 1.70%. On the flip side, Tata Motors down by 2.89%, GAIL India down by 2.09%, Grasim Industries down by 1.86%, Yes Bank down by 1.79% and SBI down by 1.71% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 15.05 points or 0.2% to 7,540.33 and France’s CAC rose 12.87 points or 0.22% to 5,981.13, while Germany’s DAX was down by 6.10 points or 0.05% to 13,281.73.

Asian markets ended mixed on Wednesday as investors awaited more clues on trade and the global economy. Concerns about the prospect of a so-called hard Brexit persisted and Weak data from Japan kept the market sentiment cautious. Meanwhile, China's central bank on Wednesday reduced its 14-day reverse repurchase rate marginally after cutting the short-term 7-day repo rate a month ago. The People's Bank of China also injected CNY 200 billion into the financial system via reverse repurchase agreements to meet liquidity demand. Japanese shares closed down on growth worries after official data showed the country's exports decreased for the 12th consecutive month in November. Exports fell 7.9 percent on a yearly basis in November - slower than the 8.8 percent fall street had expected. Exports to the United States decreased 12.9 percent while that to China were down 5.4 percent.