Bulls drive Sensex to record close on last day of 2017; Nifty up 29% this year

Bulls celebrated early year-end party at Dalal Street on last trading session of calendar year post SEBI move, as the Sensex ended at record closing high, while it was a positive start to Nifty January series.

The SEBI’s decision to allow exchanges to provide equity and commodity trading from next year; and to relax the entry norms for foreign portfolio investors boosted sentiment. The market, however, shrugged off fiscal deficit concerns.

Auto (up 1.28 percent) and IT (1.47 percent) were biggest gainers among sectoral indices while Metal, which was the second top gainer in 2017, lost half a percent today.

The 30-share BSE Sensex rose 208.80 points to 34,056.83 and the 50-share NSE Nifty rallied 52.80 points to 10,530.70 today. For the week, indices gained 0.3 percent each.

The year 2017 was fantastic for the market as the Sensex spiked 28 percent and the Nifty surged 29 percent, driven by liquidity, government reforms, positive global cues, state elections results and hopes of earnings growth.

“We’re hopeful that this momentum will extend further, with the earning expectations turning into reality. We advise participants to focus on themes now as we’re seeing rotational buying across the board,” Jayant Manglik, President, Retail Distribution, Religare Securities said.

Arun Thukral (MD & CEO at Axis Securities) expects markets to do well as the corporate earnings improve going forward as the market moves ahead in the year but given the spectacular returns in 2017, one should temper expectations for 2018.

“Though 2018 is being ushered-in amidst few macro concerns like rising crude oil prices, inching inflation along with an increase in the government borrowing programme leading to some slippages on fiscal consolidation path; we feel that these developments would be short-lived,” he said.

Meanwhile, the fiscal deficit at Rs 6,12,000 crore for April-November breached the target and touched 112 percent of the budget estimate for 2017-18 mainly due to lower GST collections and higher expenditure.

The broader markets outperformed frontline indices for the day as well as for the year. The Nifty Midcap gained 0.7 percent today; and shot up 47 percent in 2017, outperforming all global indices.

Among sectors, Nifty Bank, FMCG, Auto and Metal indices rallied 30-48 percent while Nifty IT rose 12 percent, but Pharma fell 6 percent in calendar year.

It was great year not only for equity but also for commodities. Brent crude, US crude and natural gas prices gained 12-20 percent during the year. Among metals, zinc, lead, nickel, copper, steel and aluminium prices rallied 20-36 percent while precious metals like gold prices added 13 percent, silver 5.5 percent and palladium 57 percent.

The market breadth was positive throughout the session today as about 1,566 shares advanced against 1,204 declining shares declined, and 186 shares are unchanged on the BSE.

Auto stocks Tata Motors, Eicher Motors, Maruti Suzuki, Hero MotoCorp and Bajaj Auto gained 1-3 percent ahead of December sales data due on first day of 2018.

TCS, Axis Bank, HDFC, Infosys, Adani Ports, Bharti Infratel, HUL, Wipro and ONGC among others were up 1-3 percent whereas oil reailers HPCL, BPCL and IOC lost another 1-2 percent as Brent crude still traded above USD 66 a barrel.

Shares of debt-laden companies hogged the limelight. Reliance Communications, which had Rs 45,000 crore debt in FY17, surged 17 percent after the company decided to sell wireless assets to Reliance Jio. Reliance Power also rallied 12 percent.

Amtek Group stocks like Amtek Auto (up 5 percent), Castex Technologies (up 18 percent) and Metalyst Forgings (up 5 percent) also gained momentum after a media report indicated that foreign firms AION, SSG Capital, Liberty House and Deccan Value Investors are learnt to have submitted bids to acquire Amtek Auto.

Jaiprakash Power Ventures spiked 20 percent after a media report suggested that Brookfield – Kotak Mahindra Group jointly made a bid for company’s power assets (2200 MW). Jaiprakash Associates rallied 12 percent and Jaypee Infratech gained 10 percent.

GMR Infrastructure rose 11 percent after CNBC reports quoting Cogencis said Axis Bank sought bids for controlling stake in GMR Chhattisgarh. GMR Infra has 47.6 percent stake in GMR Chhattisgarh and the rest is owned by lenders.

Global markets were mixed on last trading day of the year.