The stock market traded firm with modest gains in afternoon trade as assembly elections results in Gujarat and Himachal Pradesh 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. At 13:16 IST, the barometer index, the S&P BSE Sensex, rose 263.55 points or 0.79% at 33,726.52. The Nifty 50 index gained 84.35 points or 0.82% at 10,417.60.
The BJP has been ruling in Prime Minister Narendra Modi's home town 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 fulfilling 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 in afternoon trade. Positive cues from global markets also lifted investor spirits.
Among the secondary indices, the S&P BSE Mid-Cap index rose 1.01%. The S&P BSE Small-Cap index gained 0.8%. Both the indices outperformed the Sensex.
Overseas, 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%.
Closer home, the breadth, indicating the overall health of the market, was strong. On the BSE, 1,625 shares rose and 898 shares fell. A total of 141 shares were unchanged.
IT stocks were mixed. Oracle Financial Services Software (up 1.02%), TCS (up 0.93%) and Persistent Systems (up 0.05%) edged higher. Tech Mahindra (down 1.25%), HCL Technologies (down 0.71%) and Infosys (down 0.02%) edged lower.
Wipro was up 0.41% at Rs 291 after the company announced a partnership with Headspin, a San Francisco-based powerful, easy-to-use mobile experience platform, to offer next-generation mobility quality engineering and testing solutions on global mobile networks. Wipro Ventures, the strategic investment arm of Wipro that is focused on investing in early-to-mid-stage startups, made an investment in Headspin in October 2017. The announcement was made after market hours on Friday, 15 December 2017.
Pharma stocks advanced. Sun Pharmaceutical Industries (up 2.54%), Cipla (up 2.36%), Dr Reddy's Laboratories (up 2.06%), Aurobindo Pharma (up 1.37%), Lupin (up 1.29%) and Divi's Laboratories (up 0.57%) gained. Wockhardt (down 0.85%) and Ipca Laboratories (down 0.74%) dropped.
NTPC was down 0.37% at Rs 176.60. NTPC said that the Central Electricity Authority has deleted the capacity of 325 megawatts (MW) of the company's subsidiary Patratu Vidyut Utpadan Nigam (PVUNL) from the database of All India Installed Capacity, based on the decision of the board of directors of PVUNL. Accordingly, NTPC Group's installed capacity is revised from 51,708 MW to 51,383 MW and Group's commercial capacity stands revised from 50,908 MW to 50,583 MW. The announcement was made during market 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 102 seats while Congress was leading or won in 74 seats out of total 182 seats in Gujarat. BJP was leading or won in 42 seats while Congress was leading or won in 22 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.
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