Indices end at record closing high amid positive global cues

Earnings optimism and positive global cues fuelled a broad-based rally in the markets with Sensex and Nifty settling around one and half percent higher each on Friday. Benchmarks made gap-up opening, as sentiments got boost with report that India in 2020 has been one of the biggest and fastest-growing technology markets in the world. Digital and technology adoption in India has been increasing at a steady rate over the last few years, and the current COVID-19 pandemic has accelerated the rate of technology adoption across sectors, including in high involvement services such as education and healthcare. Some optimism also came with report that the RBI will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crore each on January 14. The decision was taken after a review of current liquidity and financial conditions.

Markets extended gains in late afternoon session to end at record high levels, taking support from report indicated that job listings continued to improve in December with industries including telecom, agro-based units, and media and entertainment returning to the pre-COVID-19 levels. Some support also came as the Central Board of Indirect Taxes & Customs (CBIC) has introduced liberalised Authorised Economic Operator package for micro, small and medium enterprises (MSMEs) for swift customs clearances. In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry. Market participants overlooked the government report that India’s economy is set for its biggest annual contraction in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The statistics ministry in its first advance estimate said gross domestic product will shrink 7.7% in the financial year ending March 2021.

On the global front, Asian markets finished mostly higher on Friday, amid expectations that additional U.S. fiscal stimulus under the Biden administration and a mass rollout of coronavirus vaccines will spur a strong economic recovery later in the year. Besides, the Ministry of Internal Affairs and Communications said that the average of household spending in Japan was up 1.1 percent on year in November, coming in at 278,718 yen. That beat expectations for a decline of 1.5 percent following the 1.9 percent increase in October. European markets were trading higher as the prospects of more fiscal stimulus under the Biden administration and the rollout of coronavirus vaccines raised hopes for an economic recovery. Investors cheered upbeat economic data from Germany showing both industrial output and exports rose more than expected in November. Elsewhere, data showed Britain's job market strengthened for the first time in three months in December.

Finally, the BSE Sensex rose 689.19 points or 1.43% to 48,782.51, while the CNX Nifty was up by 209.90 points or 1.48% to 14,347.25.

The BSE Sensex touched high and low of 48,854.34 and 48,365.58, respectively and there were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.01%, while Small cap index was up by 0.72%.

The gaining sectoral indices on the BSE were IT up by 3.55%, Auto up by 3.37%, TECK up by 3.07%, Consumer Disc up by 2.23% and Utilities up by 1.86%, while Metal down by 0.91% and Telecom down by 0.49% were the few losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 5.94%, Tech Mahindra up by 5.64%, Infosys up by 3.95%, Ultratech Cement up by 3.55% and Mahindra & Mahindra up by 3.51%. On the flip side, Indusind Bank down by 1.37%, Bharti Airtel down by 0.93%, SBI down by 0.61%, ITC down by 0.59% and HDFC down by 0.31% were the top losers.

Meanwhile, the Central Board of Indirect Taxes & Customs (CBIC) has introduced liberalised Authorised Economic Operator package for micro, small and medium enterprises (MSMEs) for swift customs clearances. In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry.

The relaxed requirements allow MSMEs who have filed minimum 10 customs clearance documents in one year and who have a clean compliance record over 2 years to apply for the scheme. The documentary requirements have also been appreciably simplified. Another feature is that the CBIC commits to take a decision on an application for grant of AEO status within only 15 days from electronic submission of complete documents for AEO Tier 1. Additional benefits, like further reduction in Bank Guarantee requirements, have been introduced for MSMEs, and will be expanded subsequently.

The approved AEOs derive various benefits including the facility of Direct Port Delivery (DPD) of imported containers, Direct Port Entry (DPE) of their Export Containers, high level of facilitation in customs clearance of their consignments thereby ensuring shorter cargo release time, exemption from bank guarantees, as well as a Client Relationship Manager at the customs port as a single point of interaction.

The CNX Nifty traded in a range of 14,367.30 and 14,221.65 and there were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 5.79%, Tech Mahindra up by 5.35%, Wipro up by 5.22%, UPL up by 4.10% and Infosys down by 3.91%. On the flip side, Hindalco down by 1.94%, Indusind Bank down by 1.61%, Tata Steel down by 1.36%, Bharti Airtel down by 0.96% and GAIL India down by 0.86% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 3.26 points or 0.05% to 6,860.22, France’s CAC increased 19.05 points or 0.34% to 5,688.90 and Germany’s DAX increased 94.22 points or 0.67% to 14,062.46.

Asian markets finished mostly higher on Friday on optimism over swift global economic recovery after US Congress formally certified Joe Biden's election victory, which paving the way for more stimulus package. Further, a mass rollout of corona virus vaccines globally and encouraging US jobless claims data also buoyed market sentiment. Japanese shares rose after data showed household spending rose an annual 1.1 percent in November compared to the same month a year earlier, while the weaker yen also lent support. Japan's capital Tokyo began its first day under a corona virus state of emergency on Friday. Though, Chinese shares ended lower amid rising Sino-US tensions after reports that the Trump administration was considering banning US entities from investing in an expanded list of Chinese companies.