Bulls rule Dalal Street; Sensex rallies over 700 points

The last trading day of the week turned out to be fantastic for the Indian equity benchmarks, as they bounced back from the losses posted a day before, supported by rally seen in global markets. The markets made a gap-up opening and never looked back throughout the day, gaining strength to strength as investors continued hunt for fundamentally strong stocks. Domestic sentiments got boost with Federation of Indian Chambers of Commerce and Industry’s (FICCI) latest quarterly survey report that the outlook for India’s manufacturing sector is positive for July-September quarter (Q2) with higher production in manufacturing, even as the hiring outlook for the sector remains subdued. Besides, the survey report showed that exports to rise in the second quarter. Adding some comfort, Finance Minister Arun Jaitley said that the number of people filing tax returns in India is likely to double to 7.6 crore during 5 years of present government due to initiatives like rationalisation of tax structure, lowering of rates and anti-black money measures.

The street remained cheerful, with Commerce Minister Suresh Prabhu’s statement that the new Industrial Policy is in sync with the challenges and opportunities for India with the fourth industrial revolution technologies and will place the country firmly in the global supply and value chains. Some support also came with a report that the rupee will appreciate from the current level due to sliding crude prices on the back of the downward revision of global growth forecast by the International Monetary Fund (IMF). The market participants reacted positively to the Revenue Department of the Finance Ministry’s statement that the government yet again increased import duty on several electronic items and telecom equipment to rein in current account deficit (CAD) and stabilise the rupee. Investors overlooked research agency, India Ratings’ report stating that frequent bid cancellations, the falling Indian rupee and lack of clarity on safeguard duty implications are making bidders cautious about competitive tariffs in renewable energy projects.

On the global front, European markets were trading in green, as France's consumer price inflation eased in September. The latest figures from the statistical office INSEE revealed that consumer price index rose 2.2% year-on-year following a 2.3% increase in August. Besides, Eurostat data revealed that Eurozone industrial production grew more-than-expected in August. Industrial production climbed 1% on a monthly basis, reversing the 0.7% drop each in June and July. Asian markets ended in green, after China's exports logged a double-digit growth in September. As per figures from customs administration, exports grew 14.5% year-on-year in September, faster than the 9.8% increase seen in August. Imports advanced an annual 14.3%, resulting in higher trade surplus of around $32 billion in September.

Back home, on the sectoral front, cement stocks ended higher, aided by credit rating agency, India Ratings and Research’s (Ind-Ra) latest report showing that the overall demand conditions are likely to remain stable for Indian cement sector, amid a gradual economic growth forecast across cement end-markets. Stocks related to pharma sector also ended in green, with a private report stating that the Indian pharmaceutical market (IPM) grew at 9.7% in the second quarter ended September, displaying pre-GST level growth rate. Further, stocks related to telecom equipment remained in focus, amid reports that India has raised basic customs duty on several telecom equipment and imposed duties on printed circuit boards used to make these as the country looks to curb non-essential imports to address its CAD as also boost ‘Make in India’. 

Finally, the BSE Sensex surged 732.43 points or 2.15% to 34,733.58, while the CNX Nifty was up by 237.85 points or 2.32% to 10,472.50.

The BSE Sensex touched a high and a low of 34,808.42 and 34,279.78, respectively and there were 29 stocks advancing against 2 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index jumped 2.42%, while Small cap index was up by 2.60%.

The top gaining sectoral indices on the BSE were Auto up by 4.01%, Metal up by 3.83%, Realty up by 3.53%, Consumer Disc up by 3.41% and Energy up by 3.39%, while IT down by 0.79% and TECK down by 0.50% were the only losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 5.89%, Mahindra & Mahindra up by 5.29%, Kotak Mahindra Bank up by 4.87%, Coal India up by 4.56% and Bajaj Auto up by 4.35%. On the flip side, TCS down by 3.10% and Tata Motors - DVR down by 0.54% were the only losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has said the Union Cabinet may soon approve the new industrial policy that aims at promoting manufacturing, attracting investments and creating jobs. He also said that the policy is in sync with the challenges and opportunities to be brought up by the 'fourth industrial revolution'.

The minister observed that with changing technologies in the manufacturing sector, the world is talking about the fourth industrial revolution which includes artificial intelligence, robotics, internet of things, blockchain and machine learning.  He said that India too is gearing itself to use these modern technologies to boost its manufacturing sector and increase its share in the country's gross domestic product (GDP). Besides, he noted that the proposed policy would look at ways to reduce regulatory hurdles and encourage adoption of frontier technologies such as robotics and artificial intelligence.

In August last year, the Department of Industrial Policy and Promotion (DIPP), under the commerce and industry ministry, floated a draft industrial policy with an aim to create jobs for the next two decades, promote foreign technology transfer and attract $100 billion FDI annually. The new industrial policy will replace the policy of 1991, which was prepared on the backdrop of India's balance of payment crisis.

The CNX Nifty traded in a range of 10,492.45 and 10,322.15. There were 46 stocks in green as against 4 stocks in red on the index.

The top gainers on Nifty were Maruti Suzuki up by 6.22%, Bajaj Finance up by 5.73%, Eicher Motors up by 5.56%, Mahindra & Mahindra up by 5.25% and HPCL up by 5.12%. On the flip side, TCS down by 3.03%, HCL Tech down by 2.65%, Dr. Reddy’s Lab down by 0.37% and Tech Mahindra down by 0.23% were the top losers.

European markets were trading in green; UK’s FTSE 100 surged 53.51 points or 0.76% to 7,060.44, France’s CAC gained 30.17 points or 0.59% to 5,136.54 and Germany’s DAX was up 66.60 points or 0.57% to 11,605.95.

Asian markets ended in green on Friday as investors cheered media reports suggesting that the US Treasury Department has not labeled China as a currency manipulator in an internal report. Sentiments  were also bolstered after data showed China's exports have so far held up well despite escalating trade tensions with the US. China's exports logged a double-digit growth in September, figures from customs administration revealed. Exports grew 14.5 percent year-on-year in September, faster than the 9.8 percent increase seen in August. Imports advanced an annual 14.3 percent, resulting in higher trade surplus of around $32 billion in September. Japanese shares finished modestly higher as the yen held broadly lower and data showed Chinese exports strengthened unexpectedly in September.

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