Sensex, Nifty end higher on RBI's move to lift economy; Tata Steel, Infosys gain17 min read . Updated: 06 Aug 2020, 03:47 PM IST
- RBI keeps its key policy rates and maintained its accommodative stance
- Sensex ends above 38,000, Nifty tops 11,200 mark
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Sensex, Nifty close 1% higher
Benchmark indices jumped nearly 1% on Thursday after the Reserve Bank of India left key interest rates unchanged and maintained its accommodative stance. The measures announced by RBI governor Shaktikanta Das to boost the sagging economy cheered stock market investors.
The BSE Sensex closed at 38,046 points, up 382 points. Infosys, Tata Steel were the top gainers on the index, while SBI and Bajaj Auto were the prominent losers. Of the 30 shares, 23 advanced, while 7 declined.
Nifty ended 104 points higher 11,205. ZEEL, Infosys, UPl were top gainers here. On the 50-share index, 38 gained and 12 lost.
All sectoral indices, barring Nifty PSU, closed in the green today.
PI Industries backs-up its hefty valuations with strong growth momentum
Agrochemicals and custom synthesis products maker PI Industries Ltd impressed the Street with strong performance for the June quarter. The stock gained 7% in Thursday's trade, hitting a new 52 week high.
Revenue and operating profit grew 41-55% from the year ago quarter. Domestic revenue grew by an impressive 76% as the company benefited from recovery in demand and amalgamation of products it acquired from Isagro Asia. The (June) quarter saw the highest ever placement of its herbicide product Nominee Gold.
Asian markets end mixed
Asian share markets ended mixed today. Japan's Nikkei ended down 0.4%, and Hong Kong's Hang Seng closed 0.7% lower. Australia's ASX closed 0.7% higher, followed by China's Shanghai Composite index which ended up 0.3%.
Adani Power earnings
Adani Power reports weak earnings with loss expanding and revenue coming in 33% lower YoY. Average plant load factor is at 51% Vs 78% (YoY)
Price hikes, rising demand make a good therapy for metals stocks
Demand for metals has begun to inch up with metals companies able to raise domestic prices. The underperforming Nifty Metals index this year has lately started to turn around this year and gained nearly 6% so far in August.
“It is interesting to note that in the past three months, while prices across regions (except US) have increased 20% on average, domestic prices have stayed flat," said analysts at Edelweiss Securities in a note to clients.
Domestic consumption was up 11% month-on-month in July, pointed out analysts.
Jyoti Roy, DVP- Equity Strategist, Angel Broking, on RBI's monetary policy
The RBI's decision of keeping rates unchanged could have been influenced by the CPI inflation which came in at 6.09% for the month of June and is above the RBI’s upper threshold of 6%. While further rate cuts by the RBI will be dependent on inflation coming down current levels, we expect the RBI will try to ensure adequate credit flow to the economy along with taking steps to ensure full transmission of the 250 bps rate cuts done so far.
Europe markets mixed
European stocks were mixed today. Germany's DAX gained 0.5%, while the CAC 40 in Paris slipped 0.2%. Britain's FTSE 100 fell 1.3%.
Rupee ends flat
The India rupee ended at 74.93 per US dollar against previous close of 74.94.
Oil prices just under five-month highs
Oil prices slipped just below five-month highs on Thursday, with support from a weak dollar and falling U.S. crude inventories undermined by bearish sentiment about fuel demand.
Brent crude fell 7 cents to $45.10 a barrel by 0802 GMT, while U.S. crude was down 25 cents at $41.94.
Yes Securities says buy Tata Consumer Products
Strong revenue/EBITDA/PAT growth of 13%/38%/42% respectively led by strong growth in India Foods and International Beverages. Despite the production and supply chain disruptions in April, superb on-ground execution helped further by pantry stocking led to 8% growth in India tea, 19% in India foods (11% in salt and >50% in pulses/spices), 15% in international beverages (13% in tea and 37% in EOC coffee) and 12% in Tata Coffee. Strong 310bps EBITDA margin improvement to 17.9% led by better realizations, lower trade spends, better product and channel mix, utilization of low priced RM inventory and lower discretionary expenditure across key cost heads. Management highlighted some tapering off in the demand momentum and also the margin risks on account of a 50% rise in India tea prices; integration between foods and beverages business should complete by end-CY20 with expected synergy benefits of 1.5%-2% over 18-24 months and a 100bps reduction in distribution costs post completion of supply chain initiatives. Results were a significant beat on our and consensus estimates with more than expected surge in demand due to pantry stocking across markets coupled with strong execution and lesser promotion and other spends.
We retain our BUY rating despite the recent up move as we believe it is a solid medium to long term story with improving visibility of higher growth rates and better execution coupled with multiple margin levers driving higher return ratios. We increase our SOTP-based TP to ₹490 from ₹460 earlier given a 13% and 9% upgrade to our EPS estimates for FY21 and FY22 respectively, implying 44x P/E.
Angel Broking's Prathamesh Mallya on gold
Gold, the safe haven asset, the yellow metal, the go to asset for investors in times of uncertainty has been on a ride with absolute returns of more than 34% 2020 YTD. Low yields in the US treasuries, low interest rates and massive amount of liquidity pushed by major central banks across the globe has resulted in euphoria for the yellow metal.
For the first time in the past 10 years, gold prices in the international markets have touched all-time highs of $2050 per ounce while on the MCX, gold futures have been trading at Rs.55,500 mark the lifetime highs for the yellow metal and trades in an unchartered territory. The pandemic has slowed the global economy drastically because of which the belief of the investors is surmounted to the precious, safe haven, gold and this faith will continue to bring in more momentum in gold prices in the months ahead, unless, global economy shows any signs of green-shoots of recovery.
Bajaj Finance,Tata Steel top gainers on Sensex, while Maruti, Baja Auto biggest laggards
India slams China's attempt to raise Kashmir issue at UN Security Council
India on Thursday slammed China for making another attempt to raise the Kashmir issue on Pakistan’s behest at the UN Security Council, saying it firmly rejects Beijing's interference in the country's internal affairs.
“We have noted that China initiated a discussion in the UN Security Council on issues pertaining to the Indian Union Territory of Jammu & Kashmir. This was not the first time that China has sought to raise a subject that is solely an internal matter of India," an Indian foreign ministry statement said.
“As on such previous occasions, this attempt too met with little support from the international community. We firmly reject China’s interference in our internal affairs and urge it to draw proper conclusions from such infructuous attempts," it said.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, on RBI policy
The RBI governor's remark on the disconnect between the financial market and the real economy is a reflection of the central bank's concern about the exuberance in the market. The central bank has preferred to play it safe with a pause even while reiterating that further space is available for more monetary action.The setting up of the KV Kamath committee to advise on resolutions is an excellent decision.
Indian rupee was higher against the US dollar at 74.87 per dollar against the previous close of 74.93. It had opened at 74.82 per dollar.
Upasna Bhardwaj, senior economist, Kotak Mahindra Bank on RBI policy
MPCs caution on uncertainty on inflation trajectory suggests that chances of further easing will henceforth remain a function clearly of evolution of supply side shocks. We see next few readings still elevated near 6% and hence we do not see any rate easing in at least the October meeting. On a positive note, the other regulatory and development measures announced today will go a long way in ensuring financial stability.
RBI introduces debt recast window, with riders
The Reserve Bank of India on Thursday provided lenders a window to recast stressed assets without classifying them as non-performing, provided they set aside 10% additional provisions on such loans.
Similar facilities of debt recast was also extended to personal loans and small businesses and is not only confined to corporate exposures.
“The economic fallout on account of the covid-19 pandemic has led to significant financial stress for a number of borrowers across the board. The resultant stress can potentially impact the long-term viability of a large number of firms, otherwise having a good track record under the existing promoters, due to their debt burden becoming disproportionate, relative to their cash flow generation abilities," it said.
RBI to provide additional liquidity facility of ₹10,000 crore to NHB, Nabard
Reserve Bank of India Governor Shaktikanta Das on Thursday said the central bank will provide additional special liquidity facility of ₹10,000 crore to National Bank for Agriculture and Rural Development (Nabard) and National Housing Bank (NHB).
Announcing the monetary policy decisions, Das said ₹5,000 crore will be provided to NHB to support liquidity starved housing finance companies. The facility will be for a period of 1 year and will be charged at repo rate.
“In order to shield the housing sector from liquidity disruptions under the prevailing conditions and augment the flow of finance to the sector, it has been decided to provide an additional standing liquidity facility (ASLF) of ₹5,000 crore to NHB – over and above ₹10,000 crore already provided – for supporting housing finance companies (HFCs)," said RBI in its statement on development and regulatory policies.
RBI also announced a separate liquidity line of ₹5000 crore for NABARD for refinancing NBFC-MFIs and other smaller NBFCs.
RBI Policy: India’s FY21 GDP growth seen in contraction zone
Reserve Bank of India governor Shaktikanta Das on Thursday said India’s GDP growth will continue to contract in fiscal 2021 due to disruptions caused by the covid-19 pandemic that has hit economic activities.
Das said the central bank will maintain accommodative stance "as long as it is necessary to revive growth".
The Reserve Bank of India (RBI) kept the repo rate, the key interest rate at which it lends to commercial banks, unchanged at 4%, according to a statement by the central bank governor. The MPC was unanimous in its decision to stand pat on interest rates.
Nifty Auto at a glance
Maruti, M&M and Eicher Motors biggest losers
Banks clock gains after RBI policy
India's economic growth to contract: RBI
RBI says real GDP growth to remain in negative zone in first half and in full fiscal.
Monetary Policy Committee expects inflation to remain elevated in Q2, ease in second half of fiscal, says RBI Governor Das
RBI Policy: Repo rate unchanged at 4%, to continue accommodative stance
The Reserve Bank of India on Thursday kept the repo rate, the key interest rate at which it lends to commercial banks, unchanged at 4%, according to a statement by the central bank governor Shaktikanta Das on Thursday. The central bank’s six-member Monetary Policy Committee (MPC) was unanimous in its decision to stand pat on interest rates.
The committee concluded its three-day policy monetary review meeting today.
The reverse repo rate, the rate at which Reserve Bank of India (RBI) buys securities from the same banks, was also kept unchanged at 3.35% and so was the bank rate at 4.25%.
This was the last time the current six-member MPC met after a four-year tenure. The MPC will in a month have four new faces.
Nifty at a glance
Nifty gains 0.6% post RBI policy.
Nifty Bank, Auto down
RBI Policy: Repo rate unchanged
MPC keeps policy rates unchanged
Jaikishan Parmar, senior equity research analyst, Angel Broking, on HDFC Ltd QIP
We expect HDFC Ltd would use this capital for growth and inorganic opportunity. Moratorium reduced from 27% to 22%. 39.2% of non-individual book opted for a moratorium, However, only 10.9% of 39.2% has not paid any EMI remaining has paid part or full EMI. HDFC Ltd has one of the hight stage 3 coverage among HFC. It has more than required provision on exiting GNPA. We expect HDFC Ltd will be able to gain market share, as it has been able to raise debt at a competitive rate, whereas other players are finding it difficult to raise debt at competitive rate. At today closing price HDFC Ltd Core business is trading at 1.4x FY22 Book Value, which we believe inexpensive, considering superior management, higher provisioning on exiting non-performing asset and sufficient Capital adequacy."
Indoco gets USFDA nod for schizophrenia, bipolar disorder treatment drug
Drug firm Indoco Remedies on Thursday said it has received approval from the US health regulator for Olanzapine tablets, indicated for the treatment of schizophrenia and bipolar disorder.
The approved product is therapeutically equivalent to the reference listed drug 'Zyprexa' of Eli Lilly.
In a BSE filing, Indoco Remedies announced receipt of approval for its abbreviated new drug application (ANDA) for Olanzapine Tablets USP in the strengths of 2.5mg, 5mg, 7.5 mg, 10mg, 15mg and 20 mg.
Bank of England makes no changes to stimulus push
The Bank of England said on Thursday it was keeping its benchmark interest rate at 0.1%.
The BoE also left unchanged the size of its bond-buying programme at 745 billion pounds ($978 billion)
Alkem Labs gains
The company has launched Favipiravir under the brand name 'Alfluenza' in India for the treatment of mild to moderate covid-19 patients.
IDBI_Bank to sell stake in IDBI Federal Insurance to Ageas: Report
The lender expects to receive ₹595.3 crore from sale of up to 27% stake in the insurance arm, CNBC-TV18 reported.
Apollo Tyres down 2%
The company reported a consolidated net loss of ₹135 crore for the first quarter ended June 30, hit by lower sales due to coronavirus. The tyre maker had reported a net profit of ₹142 crore in the April-June last fiscal.
Adani Gas slips 3%
Adani Gas fell 3% as it net profit dropped 42% to ₹46 crore during the quarter ended 30 June from ₹79 crore in the same quarter of the previous fiscal.
HDFC QIP closed, subscribed around 4 times: CNBC-TV18
HDFC stock is up around 1%. The top mortgage lender had set the floor price at ₹1,838.94 per share for its qualified institutional placement (QIP) issue.
RBI Policy: Five things to watch out for
Reserve Bank of India Governor Shaktikanta Das will announce the policy decision of the Monetary Policy Committee on Thursday. What is unique about the meeting this time is that the MPC members complete their four year cycle since its inception on 29 September 2016. Here are the 5 things to watch out for:
RATE ACTION: Majority of bankers and economists are expecting the MPC to keep its powder dry and announce a status quo policy after three days of deliberation.
GROWTH & INFLATION OUTLOOK: Since the last surprise MPC meeting in June, growth outlook has worsened and inflationary pressures have mounted.
CREDIT GROWTH & RATE TRANSMISSION: While policy transmission has been visible, the banking system is yet to see a pick-up in credit growth.
UNCONVENTIONAL MEASURES: Bankers and economists also expect RBI to announce unconventional measures like raising the HTM for banks, open market operations and exercising yield management tools like “operation twist".
RESTRUCTURING PACKAGE: The market also expects RBI to announce a restructuring package with special focus on certain sectors affected by the pandemic.
Paytm appoints Bhavesh Gupta as CEO of lending business
One97 Communications Ltd, which operates Paytm, has appointed Bhavesh Gupta as chief executive officer (CEO) of its lending business. In his new role, Bhavesh will develop and expand Paytm's lending services and help the company create new credit products for customers and SMEs in partnerships with other banks and NBFCs. Gupta will be reporting to Amit Nayyar, President at Paytm.
Nifty Bank at a glance
HDFC Bank top gainer. Bandhan Bank down 1%
Strides Pharma optimistic on growth prospects
Strides Pharma says emerging markets are seeing a turnaround; witnessing green shoots. Company remains optimistic on growth prospects
Rupee opens strong
The Indian rupee opened 13 paise higher against the US dollar at 74.81
Adani-Total JV to seek fuel retailing licence
The Adani Gas and French energy major Total SA will soon seek government nod to open retail fuel stations in India, said the former's chief executive officer, Suresh Manglani, on Wednesday.
"Definitely we will take full benefit of the expertise and strength of Total," Manglani had told reporters on an earnings call, adding that the intent was to become a full-service operator providing a multi-fuel offering.
The joint venture, Total Adani Fuels Marketing Pvt Ltd, will shortly apply for a licence under the new liberal fuel retailing rules, Manglani said.
Gold prices jump, silver surges 10% in just 3 days
Gold and silver prices in India moved higher today, in line with a strong global rally in precious metals. On MCX, October gold futures moved 0.35% higher to ₹55,290 per 10 gram. September silver futures moved 1% higher to ₹72,600 per kg. In the previous session, gold had risen over 1% or ₹580 per 10 gram, hitting ₹record high of ₹55,597. Silver had surged 3.2% or ₹2250 per kg, extending Tuesday's ₹4,200 gain.
The BSE MidCap was at 14,001.55, up 0.7%
Nifty sectoral indices
Nifty Banks and Nifty IT were among the biggest gainers
ONGC and Tech Mahindra were top gainers, while Maruti and Airtel were the laggards on the Sensex
Hindalco and Tata Steel were the top gainers on Nifty, while HDFC Life and UPL lagged most
Sensex, Nifty open higher
Sensex opened 0.6% higher at 37,897.58 on Thursday, while Nifty started with 0.6% gains at 11,172 points. Nifty Midcap was 0.5% higher.
Nifty at pre-open
Nifty firm at pre-open
Sensex at pre-open
Sensex higher at pre-open session
Vodafone Idea earnings outlook: ARPU growth, AGR dues top concern
Telecom operator Vodafone Idea, which will announce its Q1 results on Thursday, is expected to report ₹11,006.9 crore revenue and loss of ₹5545.9 crore for the quarter ended 30 June, according to a poll of Bloomberg analysts. The Street is expected to keep a close watch on key metrics such as impact to revenue due to the lockdown as well as growth in data usage as demonstrated by telecom rivals.
Manoj Sinha appointed lieutenant governor of J&K
President Ram Nath Kovind on Thursday appointed former union minister Manoj Sinha as the next Lieutenant Governor of Jammu and Kashmir. He will replace Girish Chandra Murmu who resigned on Wednesday.
Markets may open flat, RBI policy eyed
Market players will watch out for Reserve Bank of India's monetary policy decision on Thursday for directions. Trends in the SGX Nifty indicate a flat opening for benchmark indices.
On Wednesday, the BSE ended at 37,663.33, down 24.58 points or 0.07% and the Nifty closed at 11,101.65, down 6.40 points or 0.06%.
Rate sensitive stocks like banks and auto will be in focus today.
RBI MPC meeting outcome today
The Reserve of India’s Monetary Policy Committee may keep policy rates unchanged today owing to rising uncertainty over inflation outlook, according to a Mint survey of bankers and economists. However, there is a small expectation of a 25 basis points cut in reverse repo as the MPC looks to push banks to pass on the rate cut instead of keeping money at the reverse repo window.
Seven out of ten bankers and economists polled by Mint said that they expect MPC to pause as inflation is likely to remain near the upper end of the RBI’s inflation mandate of 4% plus or minus 2% till September.
Stocks to Watch: HDFC, DLF, Alkem Labs, Vodafone Idea
Shares of HDFC, DLF, Alkem Labs, Vodafone Idea, Bharti Airtel will be in focus today.
Prominent among those reporting June quarter earnings today are Lupin, HPCL, Adani Enterprises, Adani Power, Vodafone Idea, Indian Hotels, JK Tyre and Torrent Power.
Asian shares mixed
Equities in Asia were trading mixed with gains in US lending support. Shares edged up in South Korea, while Hong Kong fell.
Japan’s Nikkei was flat
Hong Kong’s Hang Seng fell 0.95%
Shanghai Composite down 0.2%
South Korea’s Kospi index rose 1.04%
Australia’s S&P/ASX 200 Index gained 0.6%
Wall Street ends firm on Wednesday
US stocks rose on Wednesday led by surprise quarterly profit from Disney and as investors were optimistic about a fresh stimulus.
The Dow Jones Industrial Average rose 1.39%, while S&P 500 gained 0.64%, and the Nasdaq Composite added 57.23 points, or 0.52%, to 10,998.40.