News from the East lifts markets

Written by fe Bureau | Mumbai | Updated: Nov 1 2014, 07:35am hrs
Reassured of the governments reforms agenda and surprised by Bank of Japan's aggressive stimulus package, the markets continued to hit record highs with the BSE Sensex scaling 519.50 points on Friday and the 50-unit S&P CNX Nifty crossing the 8,300 mark.

Click here for graph

On Friday, foreign institutional investors (FIIs) bought $292.45 million worth of shares, while domestic institutional investors (DIIs) sold $46.08 million worth of shares, as per provisional data on the exchanges. YTD, India has drawn $13.4 billion in foreign flows, the highest among its peers.

Germany's Deutsche Bank on Friday said that now it sees Sensex at 29,000-levels by end of March 2015, on expectations that the coming 11 months are likely to see a slew of big-bang reforms. Earlier, the financial services firm had a target of 28,000 for Sensex.

On Friday, the 30-share BSE Sensex ended 1.9% at its lifetime high of 27,865.83 points. The 50-share CNX Nifty ended 153 points or 1.87% higher at 8,322.20 points to close at its lifetime high. The market rally was led by HDFC (4.13%), GAIL (3.83%), Larsen & Tourbo (3.61%), Tata Power (3.36%) and Tata Steel (3.15%).

It was a positive week for the markets with the Sensex advancing in four out of five trading sessions. On Thursday, the 30-share Sensex ended at its lifetime high of 27,346.33 points, shrugging the end of quantitative easing (QE) and cheering Cabinet's decision to relax its FDI policy in the construction development sector. During the week, the 30-share Sensex gained 3.78% or 1014.78 points.

Experts expect the government's reform agenda to gain momentum in the days to come. We expect the Modi government to capitalise on an 11 month election-free window to move ahead decisively on its reforms agenda. We expect the following over next twelve months, beginning with the winter session of Parliament (starting November 23, 2014): Enactment of insurance amendment Bill, tabling of the constitutional amendment Bill on GST, amendment in land and labour Bills, long-pending critical reforms in the banking sector including recapitalisation of the PSBs, introduction of coal regulator Bill and accelerated auction of de-allocated coal blocks, Deutsche Bank said on Friday.

Among its peers, the Asian markets edged higher on Friday. Bank of Japan's announcement that it would increase its yearly asset buying plan to 80 trillion yen, from the previous rate of 60-70 trillion yen, boosted the Japanese markets. Within Asia, the Nikkei was the biggest gainer as it ended 4.83% higher. The Hang Seng (1.25%), Straits Times (1.23%), Kospi (0.28%) and Jakarta Composite (0.61%), all ended with a green bias.

Back home, except one, all the 30 Sensex stocks ended in green. In the broader market, the breadth was strong with 1,775 BSE-traded stocks ending higher against 1,223 scrips that ended in red. Most of the sector indices ended in the green. The BSE Capital Goods (2.66%), BSE Oil & Gas (2.19%) and BSE IT (1.96%) were the major gainers.

The NSE cash turnover on Friday stood at Rs 20,338.74 crore, while the turnover in the F&O segment stood at Rs 2.07 lakh crore.