Thursday turned out to be a remarkable day of trade for Indian equity markets with both the frontline indices snapping the Futures & Options series of November month ending near their psychological 20,550 (Sensex) and 6,100 (Nifty) bastion buoyed by firm global cues. Sentiments remained up-beat since beginning as key bourses opened with a huge gap on upside after industry body Assocham pegged the country's growth at 5.4% for the period on improved agricultural output. Buying continued on the street throughout the day ahead of Q2 GDP numbers to be announced tomorrow, as there is general belief that after a sluggish first quarter, India’s economy may have expanded by about 4.5 percent in the July-September period.
Global cues too remained euphoric with the US markets providing much needed support to Indian benchmarks in initial trade. Moreover, most of the Asian equity benchmarks shut shop in the green led by Japanese Nikkei, which was up by over a percent, as stronger dollar triggered some hectic buying across the board. Firm opening in European markets too provided strength to domestic bourses with CAC, DAX and FTSE all were trading in the positive terrain on report that politicians Germany struck a deal overnight to form a government.
Back home, software stocks like, Infosys, MphasiS, HCL Technologies, Wipro, Tech Mahindra etc. hogged limelight after a batch of upbeat economic data in the US. Buying in telecom stocks too supported the sentiments with stocks like, Bharti Airtel and Tata Communications edging higher after telecom regulator TRAI came out with guidelines and tariff on unstructured supplementary service data (USSD)-based mobile banking services in order to promote use of mobile banking services across the country.
Meanwhile, stocks related to oil and gas companies too remained on the buyers’ radar after Oil Secretary Vivek Rae stated that the Ministry of Petroleum and Natural Gas was working out a policy framework on shale gas exploration under which private domestic oil and gas players would get the right to explore shale gas or oil in their blocks. Additionally, sugar stocks rallied for yet another session after Food Minister K.V. Thomas highlighted that the country could give financial assistance to sugar mills to help them pay farmers higher prices for cane, thereby highlighting that some relief measures may be in store. The industry has been demanding an increase in import duty, interest-free loans for mills, subsidies for exports and creation of buffer stocks to help mills.
The NSE’s 50-share broadly followed index Nifty rose by around forty points to end near its psychological 6,100 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and ten points to end above the psychological 20,500 mark.
Broader markets too traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,442 shares on the gaining side against 1,032 shares on the losing side, while 189 shares remained unchanged.
Finally, the BSE Sensex surged by 114.65 points or 0.56%, to settle at 20534.91, while the CNX Nifty gained 34.75 points or 0.57% to settle at 6,091.85.
The BSE Sensex touched a high and a low of 20606.38 and 20461.51, respectively. The BSE Mid cap index was up by 0.81%, while the Small cap index gained 0.92%.
The top gainers on the Sensex were BHEL up 3.04%, Hindalco Inds up 2.36%, Mahindra & Mahindra up 1.78%, Coal India up 1.70%, and L&T up 1.67%, on the flip side Cipla down 0.55%, Tata Motors down 0.31%, ICICI Bank down 0.24%, ITC down 0.14%, and HDFC Bank down 0.07%, were the top losers on the index.
On the BSE Sectoral front, Capital Goods up by 1.92%, Realty up by 1.40%, Power up by 1.37%, Metal up by 0.95%, and Oil & Gas down by 0.89%, were the top gainers, while FMCG down by 0.10%, was the only loser on the sectoral front.
Meanwhile, the Department of Industrial Policy and Promotion (DIPP) is expected to propose a new policy on foreign direct investment (FDI) in the pharma sector. As per the new DIPP's proposal, 100 percent FDI would be allowed in brown-field projects, subject to government's approval. However, for brown-field project deals with rare facilities and critical verticals, only 49 percent FDI would be allowed with government's approval. Furthermore, DIPP also noted that 25 per cent of the total investment in the brown-field projects should be used in Research and Development (R&D) activities.
Meanwhile, the DIPP's proposal has brought disappointment to Finance ministry, which stated that proposed 49 per cent FDI cap on projects dealing with rare facilities would discourage potential investors. Foreign Direct Investment (FDI) in the pharma sector grew by more than double to $1.07 billion during April-August' 2013 as compared to $487 million during the same period last year. During the period 2000-2013, India's pharmaceutical sector attracted $11.39 billion in foreign investment, which was around 6 percent of its total $200 billion foreign investment inflows.
On the other hand, the DIPP and health ministry are of the view that in the absence of such policy, affordability and accessibility of Indian generic drugs would be highly impacted. Industry's generic segment accounts for the largest chunk of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.
The CNX Nifty touched a high and low of 6,112.95 and 6,068.30 respectively.
The top gainers on the Nifty were Jaiprakash Associates up by 7.91%, BHEL up by 3.46%, Grasim Industries up by 2.64%, Power Grid Corporation of India up by 2.55%, and IndusInd Bank up by 2.52%, On the other hand, Cairn India down by 1.58%, Cipla down by 0.25%, Tata Motors down by 0.05%, and NMDC down by 0.04%, were the only losers.
The European markets were trading in green, France's CAC 40 was up by 0.37%, Germany's DAX was up by 0.43%, and United Kingdom's FTSE 100 was up by 0.31%.
The Asian markets barring Hang Seng and Jakarta Composite concluded Thursday’s trade in green with Japan’s Nikkei making its highest closing level in nearly six years, as a slump in the yen pushed exporters higher on expectations of improved earnings. Japanese retail sales rose 2.3% in October from a year earlier in a sign that household consumption may be leading the nation’s economic recovery. The figures, released by the Ministry of Economy, Trade and Industry, were led by increases in sales of automobiles. Sales at large-scale retailers fell 0.4% on year, after adjustment for the change in the number of stores. The data was an encouraging sign for Prime Minister Shinzo Abe’s pro-growth policies that successfully lifted consumer spending in the first half of the year, largely on one-off, luxury purchases.
Philippine economy grew 7 percent in July-September, the National Statistical Coordination Board stated. Gross domestic product growth in the first nine months stood at 7.4 percent, compared with 6.7 percent in the same period last year. The Office of Industrial Economics Thailand stated that Thai Industrial Production fell to a seasonally adjusted -4.0%, from -2.9% in the preceding month. The National Statistical Coordination Board reported that Philippines GDP fell to a seasonally adjusted annual rate of 7.0%, from 7.6% in the preceding month whose figure was revised up from 7.5%.
