Exuberance continues over Dalal Street on Wednesday

Exuberance continued over the Dalal Street on Wednesday, with Sensex and Nifty ending higher by around 0.90% each. The markets made a cautious start but soon staged sharp recovery, aided with Minister of State for Finance Anurag Thakur’s statement that the Foreign Direct Investment (FDI) in India has been increasing on an annual basis and was at $34.90 billion till November of this fiscal. In early noon deals, volatility hit over the street, as rating agency CRISIL warned of potentially high stress in non-banking financial companies’ (NBFCs) wholesale book well above the reported bad loan numbers by March, indicating rising risks to their retail books.

However, in the second half of the day, bourses bounced to intraday high points, as Indian service sector started a new year 2020 on a strong footing, on the back of fastest increase in new orders and output. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 55.5 in January from 53.3 in December. Further, the Nikkei India Composite PMI Output Index also rose from 53.7 in December to 56.3 in January. Traders got encouragement, after the Central Board of Direct Taxes (CBDT) Chairman P C Mody said that the tax department is reasonably confident of meeting the revised direct tax collection of Rs 11.7 lakh crore in current fiscal.

On the global front, European markets were trading in green terrain, as Swiss consumer confidence improved in the first quarter as households were more positive about economic situation and labor market. The consumer sentiment index rose to -9.4 in the first quarter from -10.3 in the preceding period. Asian markets ended higher, after private sector business in Singapore continued to expand in January, and at a faster rate, with an eight-month high PMI score of 51.4. That's up from 51.0 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, renewable energy stocks remained in watch, as India commissioned renewable energy (RE) projects totalling 7,591.99 MW during April-December, 2019-20. Further, aviation stocks also remained in focus, amid reports that India has retained its position as the top destination country for the Dubai International Airport, which is ranked as the world's busiest airport for the sixth consecutive year despite a series of challenges facing the aviation industry. The Dubai International Airport (DXB) in 2019 received 11.9 million passengers from India, followed by 6.3 million from Saudi Arabia and close to 6.2 million customers from the United Kingdom.

Finally, the BSE Sensex gained 353.28 points or 0.87% to 41,142.66, while the CNX Nifty was up by 109.50 points or 0.91% to 12,089.15.

The BSE Sensex touched high and low of 41,177.00 and 40,703.32, respectively and there were 21 stocks advancing against 09 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.35%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Metal up by 2.90%, Telecom up by 2.58%, Realty up by 2.56%, Industrials up by 1.97% and Capital Goods up by 1.64%, while Power down by 0.21%, Utilities down by 0.20% and Consumer Disc down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 5.14%, Bharti Airtel up by 2.77%, TCS up by 1.91%, HDFC up by 1.85% and Larsen & Toubro up by 1.57%. On the flip side, Hero MotoCorp down by 3.55%, Maruti Suzuki down by 2.25%, Power Grid down by 2.24%, Asian Paints down by 0.98% and Nestle down by 0.48% were the top losers.

Meanwhile, in order to boost India’s outbound shipments, the commerce ministry has started a process to prepare a District Export Plan (DEP) specific to each district in every State/ Union territory (UT) through an institutional structure at the district level. The plan will include the support required by the local industry in boosting their manufacturing and exports with impetus on supporting the industry from the production stage to the exporting stage. The plan will also include strategy to enhance logistics and infrastructure at the district level and better utilisation of the Market Access Initiative (MAI) scheme of the ministry for inviting foreign buyers.

Informative material on various incentives provided by the government and states will be disseminated to the industry and other potential exporters. Budgetary support will be provided to make outreach at the district level and prepare this plan. State and UTs will be assisted in preparing an annual Export Ranking Index of different districts to rank each district on its export competitiveness. In order to prepare data, efforts have been made by the ministry to look into the feasibility of preparing district-level export data from the existing set-up. The products identified, which has export potential, from the 750 districts in the country include leather, spices, garments, wool, food products, ceramics, cement, silk, carpet, glass items, metal crafts, sports goods, pharmaceuticals, engineering items, auto parts, poultry, vegetables, cut flowers, and scientific instruments.

For the plan, the Directorate General of Foreign Trade (DGFT) has been engaging with states/ UTs to initiate its preparation and implementation. The plan will be specific to each district. The DGFT is also developing a portal to enable the states to upload all information related to the products with export potential of every district. The preliminary exercise for the preparation of the plan will include an assessment of a district to identify the current export profile and its further potential in the district.

The CNX Nifty traded in a range of 12,098.15 and 11,953.35. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 10.68%, Yes Bank up by 8.58%, Tata Steel up by 5.75%, JSW Steel up by 4.95% and BPCL up by 4.82%. On the flip side, Zee Entertainment down by 6.38%, Hero MotoCorp down by 3.58%, Dr. Reddy’s Lab down by 3.08%, Power Grid down by 2.29% and Maruti Suzuki down by 2.08% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 57.29 points or 0.77% to 7,497.11, France’s CAC rose 61.07 points or 1.03% to 5,996.12 and Germany’s DAX was up by 163.39 points or 1.23% to 13,445.13.

Asian markets ended higher on Wednesday on expectations that Chinese policymakers will unveil more stimulus measures to support an economic growth jolted by the fast-spreading corona virus outbreak. Chinese shares ended higher after a survey showed China's private sector logged a moderate growth in January. Total new orders received by service providers expanded at a softer rate, in spite of a stronger increase in new work from abroad. Further, Japanese shares ended higher as weaker safe-haven yen buoyed investor sentiment amid easing global worries about the corona virus outbreak.