Post Session: Quick Review

Enthusiasm witnessed in last two trading session refused to abate at Indian equity markets, which led to benchmark equity indices ending with gains of close to a percent and half on Friday, on the mounting hopes of more reform measures on anvil. Today’s session was a surprise for those who were expecting some degree of capitulation after previous two consecutive run- up rally, indicating that new found strength of the bourses was here to stay. Trading, however, was on a cautious note as investors winded positions ahead of the long weekend coupled with US Non-Farm Payrolls data to be announced later that may throw light on the health of world’s biggest economy. Nevertheless, benchmarks prolonging its northbound journey and ending near day's highest point, settled above the crucial 19,250 (Sensex) and 5650 psychological levels respectively. Meanwhile, broader indices, showing degree of underperformance compared to frontline indices, went home with gains of over half a percent.

However, global cues remained mixed, while Asian pacific shares mostly ended positive ahead of a much-anticipated US labor report, ahead of monthly jobs report in the US which may help determine whether the US Federal Reserve will curb its stimulus program. Street widely expects U.S. non-farm payrolls to have increased by 180,000 jobs last month, up from a gain of 162,000 in July, potentially paving the way for the Federal Reserve to start cutting back its bond purchases progamme later this month, also affected the currency sentiments. European shares turned negative, after a cautious start.

Back home, massive buying activities in Banking and Oil & Gas counters kept the rally going for third consecutive session at Dalal Street. However, shares from Realty, Consumer Durable and Information Technology counters were the weak spells of the trade.  Meanwhile, shares in state-owned oil companies, viz, Oil and Natural Gas Corporation (ONGC), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) gained on hopes that the government will go for a one-time hike in diesel prices after Indian parliament's extended monsoon session ends on Saturday. While, private banks extended the gains for a second consecutive session as banking stocks saw their biggest single-day gains in over 4 years on Thursday after the RBI raised overseas borrowing limits for lenders. Additionally, telecom stocks also rang loud ahead of Telecom regulator, TRAI’s meeting for spectrum reserve price and usage charge (SUC) issue amid growing anticipation of a reduction in the cost for telecom operators. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1298: 1008, while 147 scrips remained unchanged. (Provisional)

The BSE Sensex gained 290.30 points or 1.53% to settle at 19270.06.The index touched a high and a low of 19293.96 and 18929.38 respectively.  Among the 30-share Sensex, 19 stocks gained, while 11 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.57% and 0.63% respectively. (Provisional)

On the BSE Sectoral front, Bankex up by 2.89%, Capital Goods up by 2.77%, Oil & Gas up by 2.20%, PSU up by 2.11% and Power up by 1.80% were the top gainers, while Consumer Durables down by 0.66%, Realty down by 0.17%, Auto down by 0.02% and IT down by 0.01% were the only losers in the space. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 7.71%, ONGC up by 5.52%, Bharti Airtel up by 5.38%, Cipla up by 5.11% and Jindal Steel up by 3.46%, while, Tata Power down by 2.68%, Sesa Goa down by 2.66%, Coal India down by 2.31%, Hindustan Unilever down by 1.43% and Maruti Suzuki down by 1.06% were the only losers in the index. (Provisional)

Meanwhile, enthused by the pro-reform approach adopted by new RBI Governor Raghuram Rajan, the industry body, Confederation of Indian Industry (CII) expects that the central bank would shift focus towards an expansionary monetary policy by cutting interest rates which in turn would spur investments and bring back economic growth. CII president K Gopalakrishnan said that various reforms suggested by the RBI governor including financial inclusion, facilitating investment flows, promoting financial savings, addressing the rupee depreciation and rising inflation are timely and reflect an innovative approach to tackle the hurdles facing the economy and revive investor confidence. 

Raghuram Rajan, after taking charge as the 23rd Governor of the central bank has laid out a detailed roadmap for his innings in the short-term and came out with a slew of measures, including more trade settlement in rupees to rescue the battered financial markets and hinted at a shift in focus from inflation control pursued by his predecessor, to boost the economic growth, which slowed down to the four year low at 4.4 percent in the April -June quarter of this fiscal.

Gopalakrishnan further said that amidst various degrees of uncertainty owing to an array of global and domestic issues that the industry in India is faced with today, the RBI can be a pillar of strength and provide direction and the RBI Governor’s statement on the issue of internationalization of the Rupee and capital inflows,  is indicative of bold thinking.

India VIX, a gauge for markets short term expectation of marginally gained 0.42% at 28.65 from its previous close of 28.53 on Thursday. (Provisional)

The CNX Nifty gained 80.65 points or 1.44% to settle at 5,673.60. The index touched high and low of 5,688.60 and 5,566.15 respectively. Out of the 50 stocks on the Nifty, 32 ended in the green, while 18 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were ICICI Bank up 7.64%, Bharti Airtel up by 5.81%, Cipla up by 5.23%, ONGC up by 5.15% and Asian Paint up by 4.83%. The key losers were Bank of Baroda down by 2.70%, Coal India down by 2.49%, Tata Power down by 2.41%, Sesa Goa down by 2.38% and Lupin down by 1.90%. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.11%, the United Kingdom’s FTSE 100 down by 0.12% and Germany’s DAX down by 0.20%.

Most of the Asian markets barring Nikkei 225 and Taiwan Weighted concluded Friday’s trade in green. Japan’s Nikkei fell snapping a four-day winning streak, as investors opted to book profits from a recent sharp rally in real estate and construction firms as doubts emerged on Tokyo’s chances of winning its bid to stage the 2020 Summer Olympics. Seoul shares edged higher to a fresh three-month closing high as foreigners extended their buying streak to 11 sessions, though gains were capped as investor’s awaited crucial US jobs data. Foreign investors were net buyers of 423.4 billion won ($385.48 million) of local shares and 1.5 trillion won for the week.

Japan’s index of leading economic indicators rose less-than-expected last month, official data showed. The Cabinet Office stated that Japan’s index of leading economic indicators rose to a seasonally adjusted 107.8, from 107.2 in the preceding month whose figure was revised up from 107.0. Singapore overtook Japan as Asia’s biggest foreign-exchange center for the first time as trading surged in the past three years, the city’s central bank reported, citing a survey by the Bank for International Settlements. Separately, China re-launched trade of its treasury bond futures today, 18 years after banning it following a multi-billion-yuan trading scandal. The three five-year treasury bond futures contracts started trading on the Shanghai-based China Financial Futures Exchange.