GST hopes buoy markets; Sensex gains 170 points (Roundup)

Mumbai, Nov 27 (IANS) The central government’s efforts to get a key economic legislation passed during the winter session of parliament cheered the Indian equity markets on Friday.

Both the bellwether indices of Indian equity markets opened on a higher note, supported by hopes of a stimulus package in the European Union. Besides, a better-than-expected roll-over rate after Thursday’s derivatives expiry also supported market gains.

However, the initial gains were capped over concerns regarding the weakening rupee.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day’s trade up 170 points or 0.65 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during Friday’s trade session. It closed higher by 59 points or 0.75 percent at 7,942.70 points.

The S&P BSE Sensex, which opened at 26,003.20 points, closed at 26,128.20 points — 169.57 points or 0.65 percent up from the previous day’s close at 25,958.63 points.

The Sensex touched a high of 26,184.65 points and a low of 25,937.32 points during the intra-day trade.

Analysts said the markets made gains on the back of increased hopes that the Goods and Services Tax (GST) bill will get passed during the winter session of parliament.

“Expectations that the government will be able to build consensus over the GST bill and get it passed supported markets’ gains,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline.

Besides the GST, hopes of European Central Bank (ECB) announcing a stimulus package during its next monetary policy meet slated for December 3 and rising European stocks gave a positive cue to Indian markets.

“The reasonably good roll-over (rate) after yesterday’s expiry added to the positive momentum which helped prices to rise,” James added.

Notwithstanding the equity-positive sentiments, the market gains were capped due to a weak rupee.

The Indian currency dipped to 66.88 to a dollar at 9.15 a.m., falling nearly 40 paise in two days on account of selling by foreign funds. But some dollar sales by public sector banks, ostensibly at the behest of the Reserve Bank of India (RBI), cushioned the losses.

After quoting at the lowest levels since September 2013 in early trade, the rupee closed the day’s trade weaker by 19 paise at 66.76 to a US dollar from its previous day’s close of 66.57 to a greenback.

“The trend of foreign institutional investors (FIIs) off-loading stocks due to the upcoming US FOMC (Federal Open Market Committee) and the expected rate hike in the US has impacted the rupee value,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

The foreign institutional investors (FIIs) were net sellers in the day’s trade at stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers.

According to data with stock exchanges, FIIs sold stocks worth Rs.519.25 crore, while DIIs bought stocks worth Rs.900.48 crore.

Nitasha Shankar, vice president of research with YES Securities: “Broader markets marginally under performed, however, market breadth ended in favour of the bulls with 1,379 advances and 1,252 declines.”

“All major sector indices ended in the green barring energy which ended in red. PSU (public sector undertaking) bank index saw massive build up which ended with gains.”

Sector-wise, during the day’s trade, banking, capital goods and information technology (IT) indices gained, while consumer durables, automobile and oil and gas stocks came under selling pressure.

The S&P BSE banking index augmented by 362.59 points, capital goods index gained by 218.45 points and IT index was was higher by 79.33 points.

The S&P BSE consumer durables index plunged by 172.38 points, automobile index receded by 24.04 points and oil and gas index declined by 19.47 points.

Major Sensex gainers during Friday’s trade were Hindalco Industries, up 3.26 percent at Rs.77.50; State Bank of India (SBI), up 2.80 percent at Rs.249.55; Larsen and Toubro (L&T), up 2.23 percent at Rs.1,363.80; ICICI Bank, up 1.97 percent at Rs.269.60; and Vedanta, up 1.72 percent at Rs.91.85.

The major Sensex losers were Tata Motors, down 1.32 percent at Rs.417.55; Lupin, down 1.24 percent at Rs.1,814.65; Reliance Industries, down 0.88 percent at Rs.979.05; Maruti Suzuki, down 0.68 percent at Rs.4,580.10; and Bajaj Auto, down 0.55 percent at Rs.2,448.85.

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