Late hour buying helps benchmarks to end near day’s high

Indian equity benchmarks, coming out of their consolidation mood, snapped the session near their intraday high with Sensex and Nifty closing around their psychological 20,000 and 5,900 levels, respectively as sentiments turned upbeat in last leg of trade on expectation of dovish tapering stand from Fed. Earlier in the absence of positive triggers, barometer gauges gyrated slightly above their neutral lines, as investors opted a wait and watch policy ahead of outcome of the US Federal Reserve meeting and Reserve Bank of India’s (RBI) monetary policy review. Sentiments also remained dampened after most of the Asian equity indices ended in the red awaiting outcome of the FOMC meeting that will help determine the pace and quantum of stimulus tapering by the US central bank.

However, the latter half showed a U-turn for Indian bourses, as market-participants drawing some positive cues from the opening of European counterparts, bought fundamentally strong blue chip stocks. European markets were trading firm with CAC, DAX and FTSE all in the green in early deals on Wednesday.

Back home, some strength to the bourses came in from strengthening rupee against dollar. The rupee was trading at Rs 63.25 at the time of equity markets closing as compared with previous close of Rs 63.37 per dollar. Investors’ confidence also got some boost on report that foreign direct investment (FDI) into India increased by 12.9 percent on y-o-y basis to $1.66 billion in July from $1.47 billion recorded in the same month of previous fiscal, highest in the previous three months. During April to July period of current fiscal, FDI inflows were up by 20 percent to $7.05 billion over the same period of previous fiscal.

Buying in realty and banking counters continued for third straight day as investors went for beaten down stocks in the sector. Meanwhile, shares of jewellery companies like Titan Industries, Tribhovandas Bhimji Zaveri (TBZ), PC Jeweller, Gitanjali Gems, Shree Ganesh Jewellery House (India) and Goenka Diamond & Jewels edged higher during trade after the government increased the customs duty on gold and silver jewellery by five percent to 15% to protect the domestic industry.

The NSE’s 50-share broadly followed index Nifty rose by around fifty points to end near its psychological 5,900 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around one hundred and sixty points to gain psychological 19,950 mark.

Moreover, broader markets too traded with traction and ended the session in the green. The market breadth remained in favour of advances, as there were 1,221 shares on the gaining side against 1,112 shares on the losing side, while 170 shares remained unchanged.

Finally, the BSE Sensex gained 158.13 points or 0.80% to settle at 19962.16, while the CNX Nifty added 49.25 points or 0.84% to settle at 5,899.45.

The BSE Sensex touched a high and a low of 20013.33 and 19775.29, respectively. The BSE Mid cap index was up by 0.45% and Small cap index gained 0.08%.

The top gainers on the Sensex were NTPC up 3.28%, Tata Power up 3.11%, Dr Reddys Lab up 2.64%, SBI up 2.38% and Hindustan Unilever up 2.21%, on the flip side, BHEL down 4.76%, Hero MotoCorp down 2.84%, Sesa Goa down 1.58%, HDFC down 0.61%, and Mahindra & Mahindra down 0.47%, were the top losers on the index. 

On the BSE Sectoral front, Realty up by 2.03%, Bankex up by 1.56%, FMCG up by 1.37%, Oil & Gas up by 0.87% and Healthcare up 0.81%, were the top gainers, while there were no losers on the sectoral front.

Meanwhile, in order to track the execution of expressway projects, the government plans to set up a panel comprising senior officials from the highways ministry, department of expenditure and the Planning Commission. The panel will hold periodic meetings to review the progress being made in implementing the expressway projects by the vertical set up under the National Highways Authority of India (NHAI) last month and the Prime Minister’s Office (PMO) will review their observations. 

A project review earlier this month, which found highways authority's blueprints and groundwork for three expressway projects put on the fast track by the PMO in July lacking in multiple aspects. The projects review revealed that the NHAI is yet to resolve technical and other parameters in the Supreme Court-mandated Eastern Peripheral Expressway and the Delhi-Meerut and Mumbai Vadodara expressways. Referring to 135-km Eastern Peripheral Expressway (EPE), the review said that the earthwork required to build the highway may not even be available in the vicinity and will now be necessary to re-examine the design and its cost implications. Further, it added that changes would also be required in project of 125-km Delhi-Meerut expressway and there is need to send a modified proposal to the Public Private Partnership Appraisal Committee.

The government has identified the development of infrastructure as a most crucial to boost the economy’s growth. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector and has entered into the 'Public Private Partnership (PPP)' programme in order to bring in adequate resources for setting up of a sound and efficient infrastructural base.

The CNX Nifty touched a high and low of 5,916.90 and 5,840.20 respectively. 

The top gainers on the Nifty were DLF up by 4.91%, NTPC up by 4.00%, Tata Power up by 3.97%, Grasim up by 3.72 % and Bank of Baroda up by 3.31%. On the other hand, BHEL down by 4.43%, Hero MotoCorp down by 2.95%, Sesa Goa down by 1.55%, Cairn down by 1.39% and NMDC down by 0.97%, were the top losers.

The European markets were trading in green, France’s CAC 40 was up by 0.44%, Germany’s DAX was up by 0.48%, and United Kingdom’s FTSE 100 was up by 0.18%.

Most of the Asian markets concluded Wednesday’s trade in red ahead of close of the much-anticipated US Federal Reserve policy meeting. The Fed will wrap up its meeting later Wednesday, with many investors expecting the central bank to start reducing the scale of its bond-buying program - a process that has become known as tapering. South Korean markets will be closed from today i.e. September 18 for the rest of the week for the Chuseok holidays. Trade will resume on September 23. The average prices of new homes in 70 Chinese cities in August rose to their highest levels so far this year, spurred by unabated home-buying in major cities even as analysts called for more sustainable policies to tame price gains. Compared with a year earlier, growth in median home prices in 70 Chinese cities accelerated in August for the seventh straight month after a turnaround in January, data released by the National Bureau of Statistics showed. In Hong Kong, total goods exports volume rose 8.8% in July over a year earlier, while the volume of goods imports rose 8.5%, the Census & Statistics Department reported. The volume of Hong Kong’s goods re-exports for the month rose 9.2%, while domestic exports fell 7.9%. Total export volume to the Mainland rose 13.1% compared to the same period last year.

Meanwhile, Business sentiment among Asia’s top companies deteriorated in the third quarter, led by businesses in export engines such as China and South Korea, ending three consecutive quarters of improving sentiment. The Thomson Reuters/Insead Asia Business Sentiment Index fell to 66 in the third quarter from 71 in the second quarter when it reached the highest level in more than a year. An index reading above 50 indicates an overall positive outlook. Some of the weakest readings came from north Asia’s economies of China, South Korea and Taiwan, and regional trading hub Singapore, all of which turned in readings of 50 - highlighting the impact of a stuttering global economy.