Bulls tighten their hold on Dalal Street; Sensex surpass 45k mark

Friday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges surpassing their crucial 45,000 (Sensex) and 13,250 (Nifty) levels as the Dalal Street cheered the RBI’s MPC decision to keep policy rates unchanged. Markets started the day on optimistic note as traders took encouragement with the International Monetary Fund’s statement that India's economy, severely affected by the coronavirus pandemic, is gradually recovering. It said India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 percent and held out hopes for further improvement on better consumer demand. Adding more optimism, Finance Minister Nirmala Sitharaman said that India’s economy will return to growth in 2021-22 and higher spending in the budget due in February will lay the foundations for even stronger growth in the next four to five years.

Markets extended rally in second half of the trade after the Monetary Policy Committee, led by Governor Shaktikanta Das, voted unanimously to hold the policy repo rate at 4.00 percent. The reverse repo rate was retained at 3.35 percent. The Marginal Standing Facility or MSF rate, and the Bank rate remained unchanged at 4.25 percent. Some support also came after the Finance Ministry in its latest Monthly Economic Review has said that the Indian economy is witnessing a V-shaped recovery as the GDP has recorded a quarter-on-quarter growth of 23 per cent in the July-September quarter of this fiscal. As per the report, this V-shaped recovery, evident at the half-way stage of 2020-21, reflects the resilience and robustness of the Indian economy.

Positive opening in European counters too aided sentiments. Asian markets ended mostly higher on Friday, after South Korea posted a current account surplus of $11.66 billion in October, up from $10.21 billion in September. The goods account surplus widened to $10.15 billion, compared to the $8.03 billion in October 2019. The services account deficit decreased to $0.66 billion, from $1.72 billion in October last year, owing to an improvement in the travel and transport accounts.

Back home, aviation stocks remained in limelight with Civil Aviation Minister Hardeep Singh Puri’s statement that the cap on the number of domestic flights that Indian airlines are permitted to operate was increased from 70 per cent to 80 per cent of their pre-COVID levels. Stocks related to e-commerce industry remained in focus on report that India's e-commerce industry reported nearly 56 per cent growth in order volume this festive season amid the pandemic as compared to the same period last year. The report said that not just marketplaces but brand websites also reported huge growth in consumer demand his festive season.

Finally, the BSE Sensex jumped 446.90 points or 1.00% to 45,079.55, while the CNX Nifty was up by 124.65 points or 0.95% to 13,258.55.

The BSE Sensex touched high and low of 45,148.28 and 44,665.91, respectively and there were 25 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.44%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Bankex up by 2.14%, Telecom up by 1.88%, Consumer Durables up by 1.40%, FMCG up by 1.37%, Metal up by 1.22%, while Energy down by 0.60% was the sole losing index on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.20%, Ultratech Cement up by 4.10%, Sun Pharma up by 3.80%, Bharti Airtel up by 2.91% and Hindustan Unilever up by 2.85%. On the flip side, Reliance Industries down by 0.86%, Bajaj Finserv down by 0.74%, HDFC down by 0.34%, HCL Technologies down by 0.34% and NTPC down by 0.10% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has said India's economy, severely affected by the coronavirus pandemic, is gradually recovering. India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on better consumer demand.

IMF chief spokesperson Gerry Rice said fiscal, monetary, and financial sector measures announced to date provided much-needed support to the economy, including businesses, agriculture, and vulnerable households.

Rice said ‘To further support growth, we believe the Indian authorities should prioritize swift implementation of the existing support programs and may need to consider expanding their scope, as warranted.’

The CNX Nifty traded in a range of 13,152.85 and 13,280.05 and there were 39 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Hindalco up by 4.42%, ICICI Bank up by 4.19%, Adani Ports & SEZ up by 4.11%, Ultratech Cement up by 4.04% and Sun Pharma up by 3.79%. On the flip side, Reliance Industries down by 0.88%, HDFC Life Insurance down by 0.73%, Bajaj Finserv down by 0.68%, HCL Technologies down by 0.43% and BPCL down by 0.41% were the top losers.

European markets were trading mostly in green, France’s CAC surged 20.88 points or 0.37% to 5,595.24 and UK’s FTSE 100 gained 56.29 points or 0.87% to 6,546.56, while Germany’s DAX shed 5.25 points or 0.04% to 13,247.61.

Asian markets ended mostly higher on Friday with expectations that Japan, US and Europe countries will deliver large-scale additional stimulus measures. However, Japanese shares ended lower after reports that US drug-maker Pfizer is dialing back its Covid-19 vaccine rollout plan for this year due to supply chain problems. Meanwhile, Chinese shares ended almost flat on escalating tensions between the world's two largest economies after the US added Chinese chipmaker SMIC and oil giant CNOOC to a blacklist of alleged Chinese military companies.