Sensex trades higher on last session of 2016, up 250 points

Axis Bank, Maruti Suzuki and ONGC were the top gainers on Sensex and added up to 1% on the BSE

The benchmark indices continued to trade higher even as Asian markets traded flat as investors booked profits in a thin trade.

At 12:22 am, the S&P BSE Sensex was trading at 26,613, up 248 points, while Nifty50 was ruling at 8,173, up 17 points.    

"Technically, with the Nifty surging higher and moving above the recent highs of 8,100, the bulls do seem to have an upper hand. Further, upsides are likely once the immediate resistances of 8,111 are taken out," said HDFC Securities in a technical note. 

Buzzing stocks

Shares of sugar companies gained by up to 15% after the media report suggested that the Union finance ministry is considering a proposal to restructure sugar mills’ debt, which is under severe stress due to lack of capacity utilisation.

Dwarikesh Sugar Industries, Oudh Sugar Mills, Upper Ganges Sugar, Parrys Sugar Industries, Uttam Sugar Mills, Dharani Sugar & Chemicals, Mawana Sugars, Rana Sugars, Rajshree Sugars and Simbholi Sugars were up between 6% and 15% on the BSE.

Tree House Education surged over 5% to Rs 18.25 after the company informed exchanges that a meeting of the board of director is scheduled to be held on Friday to consider and approve appointment of Suraj Manghnani as an additional independent non-executive director. 

Jagran Prakashan also surged over 5% to Rs 184.65 after the company said the meeting of the board of directors is scheduled to be held on Jan 5, to consider the proposal for buyback of shares. 

GE Power India surged 7% to Rs 485 after the company received contract worth of Rs 271 crore from Bharat Heavy Electricals (BHEL) for supply of components and services for 2 thermal power projects in Tamil Nadu.

Among decliners, Engineers India dipped nearly 7% to Rs 156 on profit booking as the stock was trading ex-bonus in the ratio of 1:1.

The state-owned company has fixed January 02, 2017 as the record date for the purpose of ascertaining the eligibility of shareholders for issuance of bonus shares.

Rollover analysis 

Rollovers to the January series have been on the higher side. On the last day, market-wide rollovers stood at 80% as compared to average rollovers of 77% in the last three series. January series will start with market-wide futures open interest (OI) of Rs 816 billion as against Rs 776 billion seen at the start of the December expiry. 

Nifty futures rollover stood at 70% which is higher than the average rollovers of 66% seen in the last three series. Nifty will start the January series with an OI of Rs 136 billion (nearly 16.84 million shares) compared to an OI of Rs 127 billion (nearly 15.9 million shares) seen at the start of December series. 

Long build up was seen in Grasim, BPCL, Yes Bank and Eicher Motors. Short build up was seen in Adani Ports, Sun Pharma, LT and BHEL. The most active future contracts were Sun Pharma, HDFC Bank, Bharat Fin and Axis Bank.

Sectorally, OI long build up was seen in the Auto, Banking, Capital Goods, Oil and Gas, Power and IT indices. No Short build up was seen in any of the indices.

RBI raises red flag on bad loans

The Financial Stability Report (FSR) published by the Reserve Bank of India (RBI) on Thursday raised red flags about the health of the banking sector as lenders struggle with rapid deterioration in asset quality at a time of lower business growth.

Overall, India’s financial system remains stable, but the stress on banking sector, particularly on the public sector banks (PSBs) “remain significant”, the central bank noted.

Global markets

Overseas, Asian stocks were trading higher. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Japan's Nikkei retreated 0.7 percent on a stronger yen, on track for a 0.1 percent loss in 2016. That is its worst in five years, with the yen's 22 percent surge in the first half of the year slamming the index.

US stocks closed fractionally lower overnight as investors remained reluctant to make big bets in a thinly-traded session ahead of long holiday weekend.

On the US data front, jobless claims declined by 10,000 to 265,000 for the week ending 24 December 2016, according to Labor Department report. This marks the 95th straight week that claims were below 300,000, a threshold associated with a healthy labor market.

(With inputs from agencies)