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Indian benchmarks stage a remarkable rally; Nifty ends above 8350 mark

Indian benchmark indices staged a blockbuster performance on Wednesday by vivaciously rallying close to a percent in the session and settling above the psychological 8,350 (Nifty) and 27,100 (Sensex) levels. Tuesday’s optimism got spilled over into the Wednesday’s session helping the frontline indices in extending the winning momentum for second successive session as investors are hoping that Budget 2017 to be unveiled on February 1, would contain incentives for companies to help prop up an economy being hit by a ban on higher-value cash notes. Market percipients continued to build hefty positions across the board as sentiments got a boost with Prime Minister Narendra Modi’s statement that India is on threshold of becoming most digitised economy in the world. While he also declared his ambition to bring about a paradigm shift through a series of historic changes, reiterating the government's commitment to reforms and projecting India as a bright spot amid global gloom after having emerged as the world's fastest-growing economy. Some support also came with Finance Minister Arun Jaitley’s statement that the Centre is still aiming to roll out the Goods and Services Tax (GST) regime from April 1. He further said while most of the issues have been resolved, there are a few critical issues that still need to be addressed. However, caution prevailed ahead of President-elect Donald Trump's first presser due later in the day and quarterly earnings from blue-chip companies. Market participants also await the key quarterly corporate results from software services firm TCS and Infosys.

On the global front, Asian markets ended mixed on Wednesday, as investors looked to US President-elect Donald Trump's press conference later in the day for clues on his policies. While his plan for tax cuts and infrastructure spending has boosted U.S. shares and the dollar, his protectionist statements have kept many investors on guard. Resources stocks advanced on higher commodity prices, while crude oil prices rebounded in Asian trades. Further, Japanese shares edged higher as a weaker yen boosted exporters, while Chinese shares ended in red, pressured by an increase in equity supply and as investors took profits on state-owned stocks which had soared on reform hopes. Meanwhile, European markets and US index futures are lacking momentum, as traders appear wary of making bold bets ahead of US president-elect Donald Trump's speech.

Back home, the local benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the frontline indices gathered further momentum and traded with over half a percent gains through the morning session of trade. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. The northbound journey only concluded with the close of the session. Eventually, the NSE’s 50-share broadly followed index Nifty, got buttressed by over a percent to settle below the crucial 8,350 support level while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over two hundred and forty points and closed above the psychological 27,100 mark. Moreover, the broader markets too participated in the rally and closed with gains of around a percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the high beta Metal counter which rocketed by over four percent, while the Banking, PSU and Capital Goods pockets too gained from strength to strength and climbed by over a percent each. However, only chink in the armor was IT index which closed on a flat note with a negative bias. The market breadth remained optimistic as there were 1738 shares on the gaining side against 1071 shares on the losing side, while 161 shares remained unchanged.

Finally, the BSE Sensex rallied 240.85 points or 0.90% to 27140.41, while the CNX Nifty rose 92.05 points or 1.11% to 8,380.65.

The BSE Sensex touched a high and a low of 27174.87 and 26978.44, respectively and there were 23 stocks on gainers side against 7 stocks on the losers side on the index.

The broader indices made a positive closing; the BSE Mid cap index ended higher 1.37%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were Metal up by 4.42%, Bankex up by 2.40%, PSU up by 1.72%, Capital Goods up by 1.39% and Power up by 1.00%, while IT down by 0.02% was the sole losing index on BSE.

The top gainers on the Sensex were Coal India up by 5.41%, Tata Steel up by 3.99%, Lupin up by 2.20%, Larsen & Toubro up by 1.91% and ICICI Bank up by 1.79%. On the flip side, Bajaj Auto down by 0.85%, ITC down by 0.56%, Reliance Industries down by 0.28%, ONGC down by 0.18% and Infosys down by 0.16% were the top losers.

Meanwhile, India's automobile sales has saw their biggest monthly fall in 16 years in December after Prime Minister Narendra Modi's decision to ban high-value banknotes as server cash shortage in the economy dented demand for big-ticket items such as cars. As per the data released by Society of Indian Automobile Manufacturers (SIAM), automobile sales for December declined 18.66 percent on account of weak consumer sentiment in market due to withdrawal of high-value currency.

According to SIAM data, Vehicle sales including passenger vehicles, commercial vehicles, three wheelers and two wheelers, registered a decline of 18.66 percent at 12,21,929 units in december 2016  as compared to 15,02,314 units in December 2015. Since December 2000, this is the highest decline across all categories when there was a drop of 21.81 percent in sales. All the other categories of the industry saw decline in sales in December, barring light commercial vehicles segment, which saw a growth of 1.15 percent at 31,178 units.

The data showed that during the period domestic car sales were at 1,58,617 units as compared to 1,72,671 units in December 2015, down 8.14 percent. It was the lowest rate since April 2014 when sales declined by 10.15 percent. Further, Passenger vehicle sales declined by 1.36 percent to 2,27,824 units in December 2016 from 2,30,959 units in the year-ago month. Similarly , two-wheeler sales fell 22 percent in December from the previous month, one of the biggest falls on record, to 910,235 units, while domestic passenger car sales saw a 8.14 percent drop to 158,617 units.

The CNX Nifty traded in a range of 8,389.00 and 8,322.25. There were 42 stocks in green against 9 stocks in red on the index.

The top gainers on Nifty were Indusind Bank up by 6.40%, Hindalco up by 6.17%, Coal India up by 5.69%, Bank of Baroda up by 4.25% and Yes Bank up by 3.99%. On the flip side, Bajaj Auto down by 1.11%, HCL Tech down by 0.93%, ITC down by 0.78%, Reliance Industries down by 0.46% and Tata Power down by 0.39% were the top losers.

The European markets were trading mostly in green; UK’s FTSE 100 increased 12.74 points or 0.18% to 7,288.21, Germany’s DAX increased 4.04 points or 0.03% to 11,587.34, while France’s CAC decreased 1.74 points or 0.04% to 4,886.49.

Asian equity markets ended mixed on Wednesday, as investors looked to US President-elect Donald Trump's press conference later in the day for clues on his policies. Trump's proposed tax cuts and spending plans could boost US and global growth, while uncertainty about his trade policies adds to the risks, the World Bank said in its latest outlook on the global economy. Japanese shares eked out modest gains as a weaker yen boosted exporters. Meanwhile, Chinese shares ended lower, pressured by an increase in equity supply and as investors took profits on state-owned stocks which had soared on reform hopes.

Asian Indices

Last Trade            

Change in Points

Change in %  

Shanghai Composite

3,136.75 -24.92-0.79

Hang Seng

22,935.35 190.500.84

Jakarta Composite

5,301.24 -8.69-0.16

KLSE Composite

1,675.21 3.160.19

Nikkei 225

19,364.67 63.230.33

Straits Times

3,000.94 -5.08-0.17

KOSPI Composite

2,075.17 30.051.47

Taiwan Weighted

9,345.74 -3.90-0.04

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