Sensex crosses 35K mark first time ever

Key benchmark indices provisionally settled with strong gains with the indices registering new milestones. The announcement of reduction in additional borrowing by the government allaying fiscal deficit concerns and expectation of big ticket changes in the Goods and Services Tax (GST) in the GST council’s next meet boosted sentiment. Indices bucked weak trend in global stocks.

The barometer index, the S&P BSE Sensex, spurted 310.77 points or 0.89% at 35,081.82, as per the provisional closing data. The Nifty 50 index jumped 93.05 points or 0.87% at 10,793.50, as per the provisional closing data. The Sensex hit record high above 35,000-mark, the level which it crossed for the first time in its history. Nifty also scaled record high above 10,800-mark.

Indices opened slightly lower and swung between the gains and losses in early trade. Stocks extended gains in morning trade and held firm till early afternoon trade. Buying momentum picked up pace in afternoon trade. Indices hovered close to their intraday highs in mid-afternoon trade. Market extended gains in late trade with the indices scaling fresh record high.

The Sensex jumped 347.56 points or 1% at the day’s high of 35,118.61 in late trade, a record high. The index fell 70.23 points or 0.2% at the day’s low of 34,700.82 in early trade, its lowest level since 15 January 2018. The Nifty gained 102.55 points or 0.95% at the day’s high of 10,803 in late trade, a record high. The index declined 33.70 points or 0.31% at the day’s low of 10,666.75 in early trade, its lowest level since 12 January 2018.

Among the secondary indices, the S&P BSE Mid-Cap index provisionally rose 0.66%. The S&P BSE Small-Cap index provisionally gained 0.43%. Both these indices underperformed the Sensex.

The side indices recovered after witnessing sharp fall earlier during the session.

The market breadth indicating health of the market was tuned positive from negative in late trade. On the BSE, 1,458 shares rose and 1,443 shares fell. A total of 146 shares were unchanged.

Zee Entertainment Enterprises declined 2.79%. The company’s consolidated net profit rose 28.28% to Rs 321.72 crore on 11.5% rise in total revenue to Rs 1886.11 crore in Q3 December 2017 over Q3 December 2016. The announcement was made during market hours today, 17 January 2018.

On a consolidated basis, Zee Entertainment Enterprises’ earnings before interest, taxes, depreciation and amortization (EBITDA) rose 15.2% to Rs 594.40 crore in Q3 December 2017 over Q3 December 2016.

Consolidated advertising revenue grew 25.8% to 1202 crore in Q3 December 2017 over Q3 December 2016. Consolidated subscription revenue fell 15.5% to 501.70 crore in Q3 December 2017 over Q3 December 2016.

Most IT stocks gained for the second straight day. HCL Technologies (up 0.66%), TCS (up 1.9%), and Infosys (up 2.5%) edged higher. Tech Mahindra (down 0.94%) and Wipro (down 1.48%) declined.

Euphoria in large cap IT stocks was mostly led by foreign brokerage’s prediction that Indian IT services stocks could be set for a turnaround in 2018. An improving global economy could spur tech spending, which could lead to a re-rating of IT stocks.

From the upcoming union budget on 1 February 2018, the IT industry has been reportedly seeking that adjustments to past years’ income emanating from advance price agreements (APAs) should be recognised as income of those years itself. Besides, equalisation levy should be treated as tax on income and be eligible for tax credit in a foreign country to the overseas online ad businesses. The industry is also seeking an extension in the exemptions granted to STP units in relation to procurements, as it used to be before the GST rollout.

On the macro front, Ministry of Finance said that upon a review of trends of revenue receipts and expenditure pattern, it has been assessed that additional borrowing of only Rs 20000 crore of government securities would be adequate to meet financing needs. Government did not accept borrowings of Rs 15000 crore in last three auctions. Remaining Rs 15000 crore would be reduced from the notified borrowing programme of ensuing weeks. Vide the Press Release dated 27 December 2017, government had stated that it will raise additional market borrowing of Rs 50000 crore through dated government securities in the current financial year, 2017-18.

Meanwhile, country’s six-month old revamped indirect tax system is reportedly set to undergo significant changes, which will include simplification of return filing process, amendment in laws and rules to simplify procedures, along with rate cuts of around 70 goods and services. The Goods and Services Tax (GST) Council – the apex body for decision making headed by finance minister Arun Jaitley – is reportedly likely to consider the big bang recommendations from states and various officers’ panel in its next meeting tomorrow, 18 January 2018.

Overseas, European stocks declined with global sentiment curbed by a sharp reversal for equities on Wall Street in the previous session. Asian stocks were mixed. Japanese orders for machinery surged to their highest level in a decade in November. Cabinet Office data showed core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 5.7% in November from the previous month.

US benchmark indices pulled back from lifetime highs set earlier in the session to end mostly lower yesterday, 16 January 2018, on likely profit booking amid concerns over the possibility of a government shutdown. On the data front, the Empire State manufacturing survey slipped to 17.7 in January from a revised 19.6 in December, the New York Fed said.

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