An expectation of tax sops in Budget, weakness of dollar and robust tax collection are adding positive sentiment
Benchmark indices settled the last trading session of 2016 over 1% higher to post a yearly gain as they recover from the recent losses tracking various local and global cues.
Nifty gained around 300 points in the last 4 sessions but failed to end the year above 8,200 in 2016 . On the other hand, Sensex rose as much as 308 points today to settle the year 544 points higher.
The S&P BSE Sensex ended at 26,626, up 260 points while Nifty50 gained 82 points at closing, to quote at 8,186. Among broader markets, BSE Midcap gained 1.15% while BSE Smallcap was up 0.97%.
"The euphoria continued in the last trading day of the year, hoping for radical remarks in PM speech tomorrow. Additionally, an expectation of tax sops in budget, weakness of dollar and robust tax collection are adding positive sentiment," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
The broad market depicted strength. There were almost two gainers against every loser on BSE. On the BSE, 1,758 shares rose and 859 shares fell. A total of 196 shares were unchanged.
Markets in 2016
Nifty gained 3% while Sensex was up 2% in 2016, a year marked by volatility from global and local events. Globally, Brexit, and Donald Trump getting elected as US President surprised the markets. Back home, where approval of GST tax bill, good monsoon gave a boost to the markets, demonetisation, and declining bank credit growth casted a negative shadow.
This year's gains would mark a recovery from a decline recorded in 2015.
But analysts are optimistic for the coming year, with RBI expected to cut rates and annual budget coming up.
“Outlook is cautiously optimistic as there are several imponderables to contend with in 2017. Direction of US interest rates, progress on GST, economy recovery post demonetization and commodity price cycle will decide the trend of 2017,” said Gautam Duggad, Head of Research,Motial Oswal Securities.
“Possibility of consumption stimulus in budget will be a good catalyst for stocks in the FMCG, Consumer Durables and Auto sectors,” he added.
Sectors and stocks
All sectoral indices ended the day in green with FMCG, realty, pharma stocks stealing the show on the last session of 2016.
Aurobindo Pharma was the top gainer for the day on Nifty but fell over 20% in 2016. Other gainers for the day include ITC, PowerGrid, Sun Pharma and ICICI Bank, up between 2-3.5% while BPCL, Bharti Infratel, Tata Steel and Bajaj Auto were the top decliners.
Hindalco Industries was the top gainer for the year, up 82% followed by YES Bank, Tata Steel, BPCL and PowerGrid.
The Nifty IT index, which fell nearly 8% this year post Brexit and Donald Trump win, was up almost 1% on Friday, with Just Dial and Tata Elxsi rising about 2% each. Nifty Bank gained 7.64% this year, was trading 0.84% up on Friday.
While metal, energy, auto were among the biggest sectoral gainers, telecom and pharma were the biggest laggards for the year.
Reliance Industries (RIL) hit a two-month high of Rs 1,084, up 1.8% in intra-day trade on Friday to close at 1.43%, extending its Thursday’s 1% gain on the BSE after the company said it commissioned the first phase of Para-xylene (PX) plant at Jamnagar, Gujarat. The stock was trading at its highest level since October 21, 2016. It hit a 52-week high of Rs 1,129 on September 26, 2016 in intra-day trade.
Engineers India dipped over 9.5% to Rs 150 on the BSE in early morning trade on profit booking as the stock trading ex-bonus on Friday in the ratio of 1:1. The stock ended 9.53% lower.
Global markets
Asian stocks looked set to end 2016 on an upbeat note, with the benchmark headed for its first annual gain in three years, while the dollar reversed earlier losses and oil was poised to record its biggest gains in seven years.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5% on Friday, diverging from Wall Street, which posted slight declines overnight.
In a year marked by major political shocks, including Brexit in June and the unexpected election of Donald Trump as U.S. president in November, Asia Pacific ex-Japan stocks are poised to record a 3.8% gain.
Despite the modest figure -- the Dow Jones Industrial Average, in contrast, is up a whopping 14% -- 2016 had the Asia-Pacific index's best performance in four years.
China's CSI 300 index added about 0.1% in its first session of gains this week. But mainland stocks are poised to be this year's worst performers in the Asia Pacific with declines of about 12%.
Hong Kong's Hang Seng rose 1%, its biggest one-day rally in 5 1/2 weeks, helping the index eke out a 0.6% gain for the year.
Thailand, after an almost 20% surge, is set to be the region's best-performing major market, followed by Indonesia, which has soared 16%. Along with China, Malaysia, down 3.4%, and the Philippines, down 1.5%, were the only other markets poised to post losses for the year.
Japan's Nikkei closed down 0.2% on Friday, erasing most of this year's meager gains and ending 2016 up only 0.4%. While this is its fifth straight year of increases, it is also its worst performance in the time, with the index slammed by the safe-haven yen's 21% surge from the start of 2016 to its peak after the Brexit vote.
Photograph: Arko Dutta/Reuters
