Benchmarks make gap-up-opening as exit polls predict BJP win

Indian equity benchmarks have made a gap-up opening and are trading jubilantly with frontline indices surpassing their crucial 21,000 (Sensex) and 6,250 (Nifty) bastions, after exit polls suggested a strong showing for the key opposition party in state elections held since November. Results for state elections are due on Sunday. Confirmation of a strong showing by the opposition Bharatiya Janata Party would bolster the chances of victory in general elections due by May. Some support also came in from currency front, as the rupee reached to its strongest level against the dollar in a month. Rally in oil and gas counter too supported the sentiments, as the Paris-based International Energy Agency has said that India would be the largest single source of growth in global oil demand after 2020.

Moreover, investors shrugged off weak global cues, as US markets ended lower overnight, with traders remaining concerned about the uncertainty about the outlook for the Federal Reserve’s stimulus program after payroll processor ADP reported a stronger than expected private sector job growth in the month of November. Asian markets too were trading in red terrain in early deals with investors indulging in some selling amid uncertainty about the outlook for the US and Federal Reserve’s stimulus program.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Meanwhile, telecom stocks viz. Idea Cellular, Bharti Airtel and Reliance Communication all edged higher after the Cellular Operators Association of India (COAI) said that GSM mobile operators added 16.6 lakh new subscribers in rural areas in October to take the overall base in such areas to 27.43 crore. All the sectoral indices on the BSE were trading in the green with banking and Capital Goods segments gaining the most. Realty, public sector undertaking, oil and gas, metal and power too were trading with significant gains. The broader indices were trading with traction, while the market breadth on the BSE was positive; there were 943 shares on the gaining side against 290 shares on the losing side while 42 shares remain unchanged.

The BSE Sensex opened at 20992.25; about 238 points higher compared to its previous closing of 20708.71, and has touched a high and a low of 21165.60 and 20992.25 respectively. The index is currently trading at 21089.40, up by 380.69 points or 1.84%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 73.93 % stocks advancing against 23.39 % declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.97% and Small cap index up 0.81%. 

The top gaining sectoral indices on the BSE were, Bankex up by 4.11%, Capital Goods up by 2.86%, Realty up by 2.02%, PSU up by 1.73% and Oil & Gas up by 1.68%, while there were no losers on the sectoral index. The top gainers on the Sensex were ICICI Bank up by 6.09%, HDFC Bank up by 4.11%, L&T up by 3.42%, HDFC up by 2.60% and BHEL up by 2.59%. On the flip side, Sun Pharma was down by 0.15% and Dr Reddys Lab was down by 0.14% were the top losers on the Sensex.

Meanwhile, India’s services sector activity after showing a good jump in October from a four-and-a-half year low, has improved a bit more in the month of November. The HSBC Business Activity Index posted 47.2 in November compared to 47.1 in October. Though, there was improvement for the second consecutive month but the numbers remained sub-50.0 level for the fifth time in as many months and indicated a solid rate of output contraction across the Indian service economy.

The seasonally adjusted HSBC India Composite Output Index too remained below the 50.0 no-change mark for the fifth month running in November. However, up from 47.5 in October to 48.5, as manufacturing production rose in the latest month. The decline in service sector activity pointed to the weakest rate of contraction in this sequence.

The latest fall in the Indian Services sector was triggered by the fifth consecutive monthly drop in new work. Five of the six broad sectors covered by the survey recorded lower business activity, the exception being Post & Telecommunication, while for the third successive month; the sharpest drop was noted at Hotels & Restaurants.

The November data further indicated that the outstanding business in the Indian private sector rose for the first time in four months. On the same time there was moderate drop in new orders placed at private sector companies. Average purchase costs at Indian services firms rose further in November, although the weakest in four months, the overall rate of input price inflation remained robust. Going forward the Indian services companies optimism had hit a a three-month high and they anticipate higher business activity in the coming year.

The CNX Nifty opened at 6,262.45; about 101 point higher as compared to its previous closing of 6,160.95, and has touched a high and a low of 6,300.55 and 6,262.40 respectively.

The index is currently trading at 6,279.00, up by 118.05 points or 1.92%. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 5.98%, IDFC up by 5.79%, HDFC Bank up by 4.26%, L&T up by 3.77% and Axis Bank up by 3.76%. On the flip side, Dr. Reddy's Laboratories down by 0.17%, Cairn down by 0.16% and Sun Pharmaceuticals down by 0.05% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite slipped 2.65 points or 0.12% to 2,249.11, Hang Seng declined 75.23 points or 0.32% to 23,653.47, Jakarta Composite tumbled 44.97 points or 1.06% to 4,196.33, Nikkei 225 dipped 52.26 points or 0.34% to 15,355.68, Straits Times dropped 29.86 points or 0.94% to 3,130.84, Seoul Composite contracted 7.03 points or 0.35% to 1,979.77 and Taiwan Weighted was down by 41.37 points or 0.49% to 8,376.63.

On the flip side, KLSE Composite was up by 3.64 points or 0.20% to 1,825.54.