Key equity benchmarks closed at record high levels for second session in a row on Wednesday. Strong inflows from foreign institutional investors (FIIs) in the past few sessions improved trading sentiment.
Gains in index majors Reliance Industries, HDFC twins and ITC pushed the benchmarks higher. Pharma stocks advanced while PSU banks corrected. Most Tata Group stocks declined after NCLAT restored Cyrus Mistry as executive chairman of Tata Group.
The barometer index, the BSE Sensex, rose 206.40 points or 0.50% to 41,558.57, its record closing high. The index hit a record high of 41,614.77 in intraday today.
The Nifty 50 index gained 56.65 points or 0.47% to 12,221.65, its record closing high. The index hit a record high of 12,237.70 in intraday today.
The broader market slipped. The S&P BSE Mid-Cap index fell 0.19% while the S&P BSE Small-Cap index declined 0.05%.
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The market breadth was negative. On BSE, 1190 shares advanced while 1305 shares declined. A total of 208 shares were unchanged.
Economy:
The International Monetary Fund (IMF) will significantly lower India's growth forecast from the earlier number of 6.1% for FY20 on 20 January 2020, given the fall in consumption, lack of private investments and sluggish exports.
As late as October, IMF had forecast India growing at 6.1% for 2019 and 7% for the next year. "But looking at recent incoming data, we will be revising the numbers and it will be a significant downward revision," IMF chief economist Gita Gopinath said on Tuesday.
India's gross domestic product (GDP) grew 4.5% in Q2 September 2019, the lowest since Q4 March 2013.
Meanwhile, Finance Minister Nirmala Sitharaman will chair the 38th goods and services tax (GST) Council meeting today, 18 December 2019. Investors are keenly waiting for the outcome of the meeting to get any cues on the government's plan to overcome revenue shortfall. Concerns on fiscal path may influence government to hike tax slabs.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.703% at 16:31 IST compared with 6.744% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.045, compared with its close of 70.985 during the previous trading session.
In the commodities market, Brent crude for February 2020 settlement fell 39 cents to $65.84 a barrel. The contract rose 76 cents or 1.16% to settle at $66.10 a barrel during the previous trading session.
Buzzing Segment:
Most Tata Group stocks reversed early trend after the National Company Law Appellate Tribunal (NCLAT) ruled in favour of Cyrus Mistry on petition challenging his removal as Chairman of Tata Sons. The tribunal restored Mistry as the Executive Chairman of Tata Group, holding the appointment of N Chandrasekaran as executive chairman illegal.
Tata Global Beverages (down 4.14%), Tata Coffee (down 3.88%), Tata Motors (down 3.05%), Voltas (down 2.26%), TRF (down 1.93%), Tata Chemicals (down 1.65%), Tata TeleServices Maharashtra (down 1.64%), Tata Investment Corporation (down 1.22%), Tata Power (down 0.98%) and Trent (down 0.39%) declined.
Tata Metaliks (up 2.07%), Tata Steel Long Products (up 1.85%), Tata Steel (up 1.16%), Tata Communications (up 1.68%), Tinplate Company of India (up 1.61%), Titan Company (up 0.09%) and Rallis India (up 1.88%) advanced.
Buzzing Sectors:
The Nifty Pharma index rose 1.20% to 8,095.40.
Sun Pharmaceutical Industries (up 2.53%), Glenmark Pharmaceuticals (up 2.24%), Wockhardt (up 1.78%), Dr. Reddy's Laboratories (up 1.64%), Lupin (up 1.6%), Alkem Laboratories (up 1.35%), Aurobindo Pharma (up 1.20%) and Cipla (up 0.97%) advanced.
The Nifty PSU Bank index fell 1.89% to 2,518.75.
Bank of Baroda (down 3.28%), Union Bank of India (down 2.84%), Central Bank of India (down 2.65%), Canara Bank (down 2.42%), Punjab National Bank (down 2.32%), UCO Bank (down 1.8%) and State Bank of India (down 1.79%) declined.
Stocks in Spotlight:
HDFC twins hit record high. HDFC Bank rose 1.58% to Rs 1292.35 after hitting a record high of Rs 1,298.80 in intraday today.
HDFC rose 0.66% to Rs 2446.85 after hitting a record high of Rs 2,459 in intraday today.
Cigarette major ITC rose 1.70% to Rs 245.20 after Puducherry CM reportedly said that cess hike on cigarettes was not on today's GST council meet's agenda.
Index heavyweight Reliance Industries (RIL) rose 0.87% to Rs 1575.70. RIL and British energy major BP Plc on Monday signed a partnership agreement to set up 5,500 petrol pumps under the brand Jio-BP. The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals.
Zee Entertainment Enterprises fell 0.09% after credit rating agency, Brickwork Ratings India, downgraded the company's cumulative redeemable non-convertible preference shares & the issuer rating.
State-run NMDC rose 2.35%. The company said on Tuesday it received a 20-year extension for four mines in its biggest mining project in Chhattisgarh. The disclosure was made by the company after market hours yesterday, 17 December 2019.
In a separate announcement on Tuesday, NMDC said it received allocation of 'Rohne' coal block. This allocation would ensure the coking coal requirement of NMDC's upcoming steel plant at Nagarnar, Chattisgarh to some extent.
Bank of Baroda declined 3.28% after Reserve Bank of India found that the bank showed a divergence in bad loans by Rs 5250 crore in the year ended 31 March 2019. The divergence is the difference in bad loans reported by the bank and the assessment done by RBI.
Bank of Baroda had reported a net loss of Rs 8,339 crore in the year ended March 2019. The adjusted (notional) net loss for the year ended 31 March 2019, after taking into account the divergence in provisioning, was at Rs 10,998 crore. According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR). For the year ended March 2019, the gross non-performing assets (NPAs) assessed by RBI was at Rs 75,174 crore compared with Rs 69,924 crore in gross NPA reported by the bank.
NBCC (India) rose 0.14%. The Committee of Creditors (CoC) of Jaypee Infratech has selected state-run NBCC (India) as the winner in the race to acquire the debt-hit realty developer after the lenders and home buyers concluded their voting on Monday night.
Sunteck Realty gained 2.82% after the company said it has sold 125 apartments out of the recently launched 225 apartments in Mumbai, generating sales worth more than Rs 200 crore.
PC Jeweller fell 5.41% to Rs 24.50 after market regulator Sebi on Tuesday ordered to impound Rs 8 crore from the company's promoters in insider trading case.
Prestige Estates Projects jumped 9.89%. The company said its board will meet on 20 December 2019 to consider and approve raising of funds through preferential issue to an identified allottee.
Foreign Market:
European markets were trading mixed as investor caution returned following U.K. Prime Minister Boris Johnson's vow to block an extension of EU trade talks beyond 2020, reviving fears of a "cliff-edge" Brexit.
A cliff-edge Brexit would immediately remove Britain from the single market, meaning it would lose its privileges for free movement of goods, services, capital and people with the member states of the European Union.
Asian markets ended mixed amid profit booking after recent rally triggered by a recent phase one trade deal reached between Beijing and Washington.
In US, stock indexes closed at records again on Tuesday supported by positive economic data and relief over a truce in President Trump's trade war with China.
In US economic data, home builders increased new construction at an annual pace of 1.365 million in November, an increase of 3.2% from October's pace and a 13.6% increase on a year ago. Industrial production rose 1.1% in November, the largest monthly increase in two years, but is down 0.8% for the past year.
The US reportedly said China agreed to increase imports of goods in 2020 and 2021 by a total of $200 billion more than the total in 2017, including about $40 billion of US farm goods. The deal also included Chinese action to protect American intellectual property and vague assurances not to manipulate its currency.
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