Markets cheer BJP’s victory in state assembly election

Indian equity benchmarks ended the session on record high level on Monday as Bhartiya Janata Party (BJP) emerged victorious with maximum seat count in four of the five states that went to polls in the month of November and December. Though, the benchmarks cooled off from day’s high in afternoon deals as select investors preferred cashing profits at record high level, but the frontline gauges managed to extend their rally for third straight day with Sensex settling above its crucial 21,300 mark, while Nifty ended near its psychological 6,350 bastion. Sentiments remained jubilant since morning as the poll results lived up to the street’s expectations of a win for the pro-growth BJP, which could also prompt foreign fund managers to bet on the return of the NDA-led coalition at the Centre after the Lok Sabha elections next year. Sentiments also remained boosted on data showing that foreign funds remained buyers of Indian stocks on December 6, 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, as per provisional data from the stock exchanges.

Supportive cues from US markets provided the much needed support to local markets initially and sentiments remained up-beat after non-farm payroll employment rose by 203,000 jobs in November following a revised increase of 200,000 jobs in October. Rally in Asian markets too boosted the traders’ moral with Japanese Nikkei surging over two percent as an upbeat U.S. jobs report hurting the yen and triggering some hectic buying at several counters. Though, the European counters traded flat in opening deals.

Back home, sentiments also remained up-beat after Indian rupee appreciated sharply in today’s trade to hit four month high, though it came off highs and was trading at Rs 61.08 at the time of equity markets closing as compared with previous close of Rs 61.44 per dollar. Public sector Oil Marketing Companies stocks viz. HPCL, BPCL and IOC, remained on buyers’ radar on rupee’s appreciation. Rally in metal stocks too aided the sentiments. Scrips like, Hindalco Industries, Tata Steel, Jindal Steel & Power, Hindustan Zinc SAIL and Sesa Sterlite edged higher after upbeat Chinese trade data. Additionally, select shipping stocks like Great Eastern Shipping Company, Shipping Corporation of India and Varun Shipping Company surged after the Baltic Dry Index, which tracks rates to ship dry commodities, gained 1.45% December 6, 2013. On the flip side, sugar stocks like Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini, Triveni Engineering etc. edged lower despite PM’s panel recommends of Rs 7,500 -crore interest-free loans to bailout sugar.

The NSE’s 50-share broadly followed index Nifty rose by over hundred points to surpass its psychological 6,350 level, while Bombay Stock Exchange’s sensitive Index -- Sensex surged by around three hundred and thirty points to end above the psychological 21,300 mark.

Broader markets too traded with traction and ended the session in the green with a gain of around half a percent. However, the market breadth remained in favour of decliners, as there were 1,201 shares on the gaining side against 1,310 shares on the losing side, while 179 shares remained unchanged.

Finally, the BSE Sensex surged by 329.89 points or 1.57%, to settle at 21326.42, while the CNX Nifty gained 104.00 points or 1.66% to settle at 6,363.90.

The BSE Sensex touched a high and a low of 21483.74 and 21282.64, respectively. The BSE Mid cap index was up by 0.48%, while the Small cap index gained 0.39%.

The top gainers on the Sensex were ICICI Bank up 5.16%, SSLT up 5.04%, L&T up 4.52%, Maruti Suzuki up 3.85%, and ONGC up 3.48%, on the flip side Jindal Steel down 6.01%, Cipla down 0.79%, Tata Steel down 0.44%, and Hindustan Unilever down 0.13%, were the only losers on the index.

On the BSE Sectoral front, Capital Goods up by 3.14%, Bankex up by 2.93%, Realty up by 2.61%, PSU up by 1.76%, and Oil & Gas up by 1.71%, were the top gainers, while, Consumer Durables down by 0.11%, was the only loser on the sectoral front.

Meanwhile, in order to harmonize delisting norms with other regulations, including the new Companies Act, 2013 and takeover and buyback norms, capital markets regulator, the Securities and Exchange Board of India (SEBI) is likely to revise its delisting regulations soon to make it easier for publicly listed companies looking to go private, while safeguarding the interest of minority shareholders. SEBI had put in place present delisting regulations in 2009, which facilitate listed company to remove its securities from a stock exchange with promoters buying out shares held by minority shareholders.   Presently, an internal committee of the SEBI is working on the possible changes that are required in the delisting norms. It is also organizing meetings with industry bodies and various companies to make delisting norms easier and cost-effective for them. Furthermore, SEBI has noted that comments can be sought from the general public and other stakeholders depending on the panel's recommendations.

The changes in SEBI's delisting norms are being considered to remove major issues for companies related to offer price at which promoters are required to buy out the shares of public shareholders. The market regulator will also make the processes cost-effective and easier for cases when promoters are forced to delist their companies on account of factors like long-running trading suspension, persistent losses, and major violations to regulations. The companies are also required to get delisted in the event of their public shareholding falling below minimum threshold limits at 10 percent for public sector companies and 25 percent for private sector companies.

The CNX Nifty touched a high and low of 6,415.25 and 6,345.00 respectively.

The top gainers on the Nifty were DLF up by 6.07%, SSLT up by 5.02%, ACC up by 4.95%, Ambuja Cements up by 4.57%, and ICICI Bank up by 4.45%, On the other hand, Jindal Steel & Power down by 6.17%, Cipla down by 0.84%, Lupin down by 0.72%, Tata Steel down by 0.62%, and Cairn India down by 0.46%, were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.19%, and United Kingdom's FTSE 100 was down by 0.11%, while Germany's DAX was up by 0.29%.

The Asian markets barring Straits Times concluded Monday’s trade in green after strong economic data from the Asia’s largest economy helped sentiment. China posted its biggest trade surplus in almost five years, as soaring exports ran ahead of modest import growth, potentially resurrecting a source of friction with the US. In November, China’s trade surplus rose to $33.8 billion from $31.1 billion the month before. China’s consumer-price inflation slowed slightly in November on an annual basis, coming in just below expectations, while wholesale-price deflation also eased slightly. The consumer price index rose 3% from a year earlier, while slipping 0.1% compared to October, according to reported data from the National Bureau of Statistics.

Japan unexpectedly swung into a current account deficit in October as its massive goods and services trade deficit eradicated the benefits of solid income from overseas investment. The 127.9 billion yen deficit in the current account, the broadest measure of Japan’s trade with the rest of the world, was much worse than the 420.8 billion yen surplus than the country registered a year earlier.