Markets end at record closing highs level

Indian equity benchmarks witnessed strong session on Wednesday and settled at record closing highs level amid positive investor sentiment over roll out of Covid-19 vaccines. The benchmarks staged a gap up opening and held on to gains on the back of a broad-based buying interest. Sentiments got a boost after S&P Global Ratings raised India’s growth projection for the current fiscal to (-) 7.7 percent from (-) 9 percent estimated earlier on rising demand and falling COVID infection rates. It said rising demand and falling infection rates have tempered its expectation of COVID’s hit on the Indian economy. Some optimism also came as Finance minister Nirmala Sitharaman asserted that the Budget for FY22 will be vibrant enough to sustain economic revival in the aftermath of Covid-19 disruption. However, markets trimmed some gains in afternoon deals, as some concern came with the government data showing that the country's exports dipped 8.74 per cent to $23.52 billion in November on account of contraction in shipments of key sectors like petroleum, engineering, chemicals and gems and jewellery. Besides, trade deficit during the month narrowed to $9.87 billion as imports too declined by 13.32 per cent to $33.39 billion.

But, key indices regained strength and posted decent gains, as traders remain energized with Union Road Transport Minister Nitin Gadkari’s statement that India holds huge investment opportunities especially in its vibrant infrastructure sector where projects worth Rs 44 lakh crore are under implementation as part of the Rs 111 lakh crore National Infrastructure Pipeline (NIP). He said as per Prime Minister Narendra Modi's vision focus was being laid on developing a world-class infrastructure under the NIP, which is first-of-its-kind exercise to bolster development. Adding optimism, the Securities and Exchange Board of India (SEBI) in its latest data report has showed that investments through participatory notes (P-notes) in the Indian capital market rose to a 27-month high of Rs 83,114 crore at November-end. Market participants also took a note of Union Minister Piyush Goyal’s statement that the industry and government have to partner to achieve the target of India becoming a $5 trillion economy by 2025. He also expressed confidence in the capabilities of the business community as well as startups which can make India the top economy globally in the next 25-30 years.

On the global front, Asian markets ended mostly in green, as investors clung to the possibility of new fiscal stimulus deal in the United States before its previous benefits expire by the end of the year. Sentiment was also underpinned after U.S. regulators said that Moderna's vaccine is safe and effective for preventing Covid-19. Beside, report showed Japan posted a merchandise trade surplus of 366.8 billion yen in November - well shy of expectations for a surplus of 529.8 billion yen and down sharply from 872.9 billion yen in October. However, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in November, albeit at a slower pace, with a PMI score of 49.7, up from 49.0 in the previous month. European markets were trading higher, as flash survey results from IHS Markit showed the euro area private sector moved close to stabilization in December as stronger manufacturing output growth helped to counter a further drop in service sector activity. The composite output index advanced more-than-expected to 49.8 in December from 45.3 in the previous month. The expected level was 45.8. The survey revealed that the economic impact of the second waves of virus infections has been far less severe than the first wave. In the U.K. the IHS Markit/CIPS flash composite Purchasing Managers' Index for the services and manufacturing sectors rose to 50.7 in December from November's 49.0.

Finally, the BSE Sensex rose 403.29 points or 0.87% to 46,666.46, while the CNX Nifty was up by 114.85 points or 0.85% to 13,682.70.

The BSE Sensex touched high and low of 46,704.97 and 46,402.20, respectively and there were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 5.03%, Consumer Durables up by 2.39%, Telecom up by 1.75%, Metal up by 1.75% and Consumer Discretionary up by 1.42%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were HDFC up by 3.11%, ONGC up by 2.69%, Bharti Airtel up by 2.35%, Asian Paints up by 2.17% and Titan Company up by 2.14%. On the flip side, ICICI Bank down by 1.09%, Indusind Bank down by 0.94%, NTPC down by 0.90%, Ultratech Cement down by 0.76% and Tech Mahindra down by 0.59% were the top losers.

Meanwhile, Finance minister Nirmala Sitharaman has stated that the Budget for FY22 will be vibrant enough to sustain economic revival in the aftermath of Covid-19 disruption. Sitharaman stated Public capital expenditure will be stepped up and the disinvestment programme will gain momentum from now on. She added emphasis has also been laid on state-run banks raising capital from the market.

She mentioned ‘recognising that this is an unusual year, borrowing has been kept absolutely at levels with which we can quickly put the money back in capital expenditure and so on. The emphasis on public expenditure for infrastructure through the public sector undertakings (CPSEs) will be definitely kept up.’

Besides, she said after lagging behind in the first and second quarter of FY21 due to Covid-19 disruptions, the CPSEs’ capex has covered a lot of lost ground in the third quarter. She also noted that the National Investment and Infrastructure Fund (NIIF) is taking steps to mobilise funds from abroad including from sovereign wealth funds.

The CNX Nifty traded in a range of 13,692.35 and 13,606.45 and there were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.84%, Bharti Airtel up by 2.80%, HDFC up by 2.75%, Divis Lab up by 2.59% and ONGC up by 2.59%. On the flip side, ICICI Bank down by 1.07%, IndusInd Bank down by 0.95%, Ultratech Cement down by 0.83%, GAIL India down by 0.68% and NTPC down by 0.66% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 62.43 points or 0.96% to 6,575.75, France’s CAC increased 43.07 points or 0.78% to 5,573.38 and Germany’s DAX increased 212.40 points or 1.59% to 13,575.27.

Asian markets ended mostly higher on Wednesday, supported by signs of progress in stimulus talks in the United States as well as the vaccination rollout. The US Food and Drug Administration said that US biotech company Moderna's vaccine candidate is safe and effective for preventing Covid-19. Japanese shares ended a tad higher after tech giant Apple's suppliers rising on report that Apple plans to increase iPhone production by about 30 percent in the first half of 2021. On the economic front, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in November, albeit at a slower pace, with a manufacturing PMI score of 49.7, up from 49.0 in the previous month. Chinese shares ended flat after Chinese chipmaker SMIC said it had become aware of co-CEO Mong Song Liang's intention of conditional resignation and as SMIC’s stock was set to be removed from MSCI indexes.