Published on 14/01/2020 5:22:18 PM | Source: LKP Securities Ltd

Markets Hit Yet Another Record Closing Highs On Tuesday - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

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Indian equity bourses hit yet another record closing highs on Tuesday, with Sensex and Nifty gaining over 0.20% each. The start of the day was sluggish, as India’s retail inflation based on Consumer Price Index (CPI) jumped to an over five-year high of 7.35% in December 2019. The CPI was 2.11% in December 2018 and 5.54% in November 2019. Traders remained pessimistic, amid reports that the deepening slowdown has it impact on the deal market in 2019 with mergers and acquisitions (M&As) plummeting over 34 per cent to $67.1 billion but still making it the second best, on the back of the $6-billion ArcelorMittal takeover of Essar Steel.

Volatility persisted over the street for the most part of the session, after India’s Wholesale price index inflation also worsened to 2.59 percent in the month of December 2019 as against 0.58 percent for the previous month and 3.46 percent during the corresponding month of the previous year.  However, in the last leg of the trade, bourses staged sharp recovery to end higher, as the Reserve Bank of India remained a net purchaser of the US dollar in November, buying $6.928 billion from the spot market on a net basis. The RBI had bought $7.458 billion of the greenback and sold $530 million in the spot market in the reporting month.

On the global front, European markets were trading in green, even though Finland consumer price inflation rose in December. The data from Statistics Finland showed that the consumer price index rose 0.9 percent year-on-year in December, following a 0.6 percent increase in November. Asian markets ended higher, as the measure of the public assessment of the Japanese economy improved for the second straight month in December. The current conditions index of the Economy Watchers' Survey, which measures the current situation of the economy, increased to 39.8 in December from 39.4 in November.

Back home, the realty sector stocks ended in red terrain, amid a private report stating that housing sales declined 30 per cent during the third quarter of this fiscal year to around 64,000 flats across nine major cities on poor demand amid economic slowdown. However, stocks related to the metal industry settled on a positive note, after India imposed anti-subsidy duty for a period of five years on copper wire rods from Indonesia, Malaysia, Thailand and Vietnam after concluding a probe that these imports have impacted domestic players.

Finally, the BSE Sensex gained 92.94 points or 0.22% to 41,952.63, while the CNX Nifty was up by 32.75 points or 0.27% to 12,362.30.

The BSE Sensex touched high and low of 41,994.26 and 41,770.90, respectively and there were 23 stocks advancing against 07 stocks declining.

The broader indices ended in green; the BSE Mid cap index rose 0.75%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were FMCG up by 1.46%, Metal up by 0.94%, Consumer Disc up by 0.84%, IT up by 0.72% and Auto up by 0.71%, while Energy down by 0.48%, Bankex down by 0.39%, Realty down by 0.12% and Capital Goods down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.15%, ITC up by 1.74%, NTPC up by 1.48%, Mahindra & Mahindra up by 1.43% and Tech Mahindra up by 1.42%. On the flip side, Indusind Bank down by 3.85%, Reliance Industries down by 0.93%, Kotak Mahindra Bank down by 0.84%, SBI down by 0.82% and Larsen & Toubro down by 0.63% were the top losers.

Meanwhile, Invest India, a non-profit venture under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, has stated that India's textile and apparel exports are expected to reach $300 billion by 2024-25, resulting in a tripling of the country's market share globally from 5 percent to 15 percent.

The domestic textile and apparel industry including handicrafts stood at $140 billion in 2018, of which $100 billion was domestically consumed while the remaining portion worth $40 billion was exported to the world market. The textile and garments industry in India is expected to reach $223 billion by 2021. The textiles and apparel industry contributes 2.3 percent to India's GDP and accounts for 13 percent of industrial production, and 12 percent of the country's export earnings.

The textile and garments industry is the second-largest employer in the country providing employment to 45 million people at present, and this number is expected to rise to 55 million people by the end of 2020. FDI in the garments and textile industry has gone to $3.1 billion during the year 2018-19. India is the largest producer of cotton and jute in the world, and the second largest producer of polyester, silk and fibre.

The CNX Nifty traded in a range of 12,374.25 and 12,308.70. There were 37 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Vedanta up by 2.87%, Britannia up by 2.30%, Hero MotoCorp up by 2.06%, ITC up by 1.61% and Cipla up by 1.58%. On the flip side, Yes Bank down by 8.31%, Indusind Bank down by 3.99%, UPL down by 1.14%, Reliance Industries down by 0.95% and SBI down by 0.80% were the top losers.

All European markets were trading higher; UK’s FTSE 100 increased 26.73 points or 0.35% to 7,644.33, France’s CAC rose 3.97 points or 0.07% to 6,040.11 and Germany’s DAX was up by 27.23 points or 0.2% to 13,478.75.

Asian markets ended mostly higher on Tuesday, with China's yuan jumped after the United States removed the currency manipulator label it imposed on China last summer, in a sign of easing Sino-US tensions after nearly two years of conflict. Further, Japanese shares ended up as traders returned to their desks after a public holiday on Monday. Though, Chinese shares ended lower despite upbeat trade data. China's exports rose an annual 7.6 percent in the month, marking the first gain in the country's exports since July 2019 and the fastest growth rate since March 2019, official data showed. At the same time, imports in the month grew 16.3 percent from a year earlier.


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