The market extended initial gains and scaled fresh intraday high in morning trade. While domestic economic data was weak, global cues were supportive on the back of US reaching 'deal in-principle' with China and Boris Johnson heading for crushing UK election victory.
Metal stocks were in demand on trade deal optimism. The Nifty scaled 12,050.
At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 362.85 points or 0.89% at 40,944.56. The Nifty 50 index was up 87.65 points or 0.73% at 12,059.454.
The broader market was in line with benchmark indices. The S&P BSE Mid-Cap index was up 0.83%. The S&P BSE Small-Cap index was up 0.73%.
The market breadth indicated bullish sentiment. On the BSE, 1207 shares rose and 515 shares fell. A total of 93 shares were unchanged. In Nifty 50 index, 38 stocks advanced while 12 stocks declined.
Economy:
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India's retail inflation jumped to a 40-month high in November on higher food prices, while industrial output contracted in October from a year earlier, data showed on Thursday.
India's IIP declined for third straight month at 3.8% in October 2019, in addition to 4.3% dip in September 2019 and 1.4% decline in August 2019. The numbers were better than expected given that in October there are several holidays when factories were shut.
The manufacturing sector output declined 2.1%, while electricity generation plunged 12.2% in October 2019 contributing to the overall decline in industrial production. Further, the mining sector production plunged 8.0% in October 2019.
The all-India general CPI-based retail inflation jumped to 5.54% in November 2019, compared with 4.62% in October 2019. The higher inflation was driven by transitory factors such as increase in food inflation while core inflation continued to remain subdued, reflecting the tepid demand in the economy. The core CPI inflation rose marginally to 3.50% in November 2019 compared with 3.44% in October 2019.
Food price inflation (rural and urban) climbed 10.01% in November 2019, as against 7.89% in October 2019. Food inflation rose sharply as unusually heavy rains at the end of the monsoon season hit crop yields and caused a spurt in prices of vegetables such as onions.
The RBI in its fifth bi-monthly monetary policy statement on 5 December 2019, revised retail inflation projection upwards to 4.7-5.1% for the second half of FY2020 and 3.8-4% for the first half of FY2021.
Buzzing Index:
Metal stocks hardened as US President Donald Trump's tweet that a trade deal with China, fuelled demand for the industrial metals.
The Nifty Metal index jumped for second trading session in a row. The Nifty Metal index was up 2.36% at 2,629.45. The index is up 4.78% in two sessions.
Steel Authority of India (up 4.52%), Vedanta (up 4.2%), Hindustan Copper (up 4.01%), Jindal Steel & Power (up 3.84%), Hindalco Industries (up 3.48%), Tata Steel (up 3.09%), JSW Steel (up 2.95%), National Aluminium Company (up 2.2%), Hindustan Zinc (up 1.53%) and NMDC (up 0.4%) were top gainers in metal segment.
Stocks in Spotlight:
IT major Infosys rose 1.02% after the company issued a clarification regarding class action lawsuit. The company in an exchange filing stated that it is not aware of any additional complaints, other than the initial complaint, which was disclosed on 24 October 2019. The company further added that it is not uncommon for plaintiffs' lawyers to issue press releases or other media communications asking potential plaintiffs to contact them in order to apply for lead plaintiff status in an existing lawsuit. It appears that the press communications by the Schall Law Firm is soliciting potential lead plaintiff applicants, the company added.
Sterling & Wilson Solar was locked in an upper circuit of 5% at Rs 300.60 extending its gains for third session. The company announced that it has executed a definitive contract for Engineering, Construction and Procurement for a 144 MW DC Solar Farm in Australia amounting to AUD 170.60 million (approx. Rs 827 crore).
Foreign Markets:
Asian shares rallied after US President Donald Trump said Washington was close to a trade deal with China. Dovish stances by the US Federal Reserve and the European Central Bank further helped to provide support. The ECB on Thursday decided to keep its deposit rate at -0.5% and its asset purchase program unchanged at 20 billion euros a month. Also on investors' radar was the British election, which will pave the way for Brexit.
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