Key indices provisionally settled with modest gains after witnessing sharp volatility at the onset of the session as assembly elections results showed that BJP will return to power for a sixth straight term in Gujarat and will overthrow Congress rule to form government in Himachal Pradesh. The barometer index, the S&P BSE Sensex, rose 140.66 points or 0.42% at 33,601.68, as per the provisional closing data. The Nifty 50 index gained 55.95 points or 0.54% at 10,389.20, as per the provisional closing data. Positive cues from global markets also lifted investor spirits. Key indices gained for the third straight day.
The Sensex gained 338.93 points or 1.01% at the day's high of 33,801.90 in afternoon trade, its highest level since 7 November 2017. The index slumped 867.34 points or 2.59% at the day's low of 32,595.63 in early trade, its lowest level since 6 December 2017. The Nifty gained 110.30 points or 1.06% at the day's high of 10,443.55 in afternoon trade, its highest level since 7 November 2017. The index skidded 258.45 points or 2.5% at the day's low of 10,074.80 in early trade, its lowest level since 7 December 2017.
The BJP has been ruling in Prime Minister Narendra Modi's home state Gujarat for the last two decades plus and a win today will boost its chances to form government at the centre once again in the 2019 general elections. The win will also help BJP to continue with its bold reforms and fulfill mandate for economic development.
Key indices had slumped in early trade after early trends of Gujarat assembly election results showed a close fight between incumbent BJP and rival Congress party. Market soon reversed losses in morning trade as concerns eased following BJP crossing past simple majority mark in its stronghold Gujarat. Market extended gains in mid-morning trade as BJP win was confirmed in both the states. Stocks held firm till mid-afternoon trade. Indices trimmed gains in late trade.
Among the secondary indices, the S&P BSE Mid-Cap index provisionally rose 0.76%. The S&P BSE Small-Cap index provisionally gained 0.45%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, was positive. On the BSE, 1,467 shares rose and 1,178 shares fell. A total of 179 shares were unchanged.
The total turnover on BSE amounted to Rs 4994.71 crore, higher than turnover of Rs 4792.12 crore registered during the previous trading session.
Tata Power Company declined 0.22%. The company said that its wholly owned subsidiary, Tata Power Renewable Energy commissioned 100 megawatts (MW) solar plant at Pavagada Solar Park in Karnataka. The announcement was made during market hours today, 18 December 2017. Sale of power from solar plant has been tied up under a 25 year power purchase agreement with NTPC at a tariff of Rs 4.79 per unit.
Metal & mining stocks gained. JSW Steel (up 1.07%), Hindustan Copper (up 0.27%), Vedanta (up 3.72%), Hindalco Industries (up 3.19%), Hindustan Zinc (up 0.67%), Jindal Steel & Power (up 0.03%), Tata Steel (up 1.88%), Steel Authority of India (Sail) (up 2.11%), National Aluminum Company (up 0.32%) and NMDC (up 2.41%) gained. Bhushan Steel fell 1.19%.
Eros International Media rose 2.97% after the company announced a four-film co-production deal with leading production house, Drishyam Films. Drishyam has over the years made a mark by producing content driven films that have received worldwide acclaim including Masaan, Rukh, Kadvi Hawa and India's entry to the Oscars in the Foreign Film category this year, the highly celebrated Newton.
In 2018, Eros and Drishyam will jointly produce four films. The first of the four projects, titled Kaamyaab starring Sanjay Mishra along with Deepak Dobriyal and directed by National-Award winning filmmaker Hardik Mehta has already gone on floor and commenced shooting on 25 November 2017. The announcement was made during trading hours today, 18 December 2017.
On the political front, counting of votes is underway for recently held assembly elections in Gujarat and Himachal Pradesh with trends showing that BJP will form government in both the states after early trends had showed a close fight with the rival Congress party. BJP was leading or won in 99 seats while Congress was leading or won in 77 seats out of total 182 seats in Gujarat. BJP was leading or won in 44 seats while Congress was leading or won in 21 seats out of total 68 seats in Himachal Pradesh.
Polling in Himachal Pradesh took place in single phase on 9 November 2017, while in Gujarat, polling took place in two phases on 9th and 14th December 2017.
On the macroeconomic data front, India's merchandise exports surged 30.5% to $26.2 billion in November 2017 over a year ago. Meanwhile, merchandise imports increased 19.6% to $40.02 billion. The trade deficit rose 3.2% to $13.83 billion in November 2017 from $13.01 billion in November 2016.
India's services exports improved 7.9% to $14.15 billion in October 2017 over October 2016. Meanwhile, India's services imports galloped 13.3% to $8.70 billion in October 2017. India's services trade surplus rose 0.3% to $5.45 billion in October 2017 from $5.43 billion in October 2016.
Overseas, European stocks gained and Asian stocks were mostly higher after a positive lead from Wall Street. Japan's export growth accelerated in November to mark a full year of annual gains. The 16.2% export growth in November, showed acceleration from a 14% year-on-year increase in the previous month, according to the Ministry of Finance.
China's central bank raised interest rates on reverse repurchase agreements, or reverse repos, used for open market operations by 5 basis points for the 14-day tenor, following upward adjustments on other tenors last week.
US stocks rose to all-time highs on Friday, 15 December 2017, as expectations of a Republican tax bill passing increased. The plan will likely cut the corporate tax rate to 21% from 35%.
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