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What lifted the market sentiment was the RBI's policy rate hike of 50 bps that came in as expected and its comment that India's economy remains on strong footing despite global headwinds. The relief rally was backed by investors' preference for growth-driving stocks from banking, automobile, realty & metal space. However, global macro factors will continue to dictate the domestic market sentiment going ahead as any fresh spell of negative news could once again trigger the downward spiral. Technically, after a sharp selloff the Nifty took support near 16800 and bounced back sharply. On daily charts, the index has formed a long bullish candle, and also formed a promising Hammer candlestick formation on weekly charts which is broadly positive. For the trend following traders the 200- day SMA (Simple moving Average) and 16900 would act as a sacrosanct support zone. Above the same, the reversal wave is likely to continue till 17250. Further upside may also continue which could lift the index till 17400. On the flip side, below 16900, uptrend would be vulnerable and on further decline the index could slip till 16800-16700.Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd
The broader indices underperformed their larger peers with MidCap and SmallCap gauges gaining over 0.8%. Seventeen of the 19 sectoral measures compiled by BSE advanced with Financial Services, Telecommunication, Utilities, Bankex, Metal and Power indices gaining over 2%.
The market breadth is skewed in the favour of bulls. About 2,064 stocks rose, 1,195 fell and 128 remained unchanged.
Net LAF continues to be in surplus for last two years, except maybe two-three days
Many banks are holding excess CRR, SLR
Many banks are dipping into excess CRR and SLR, because they need the cash
The second half expenditures of state and central governments are very high
If you take everything into account, the system liquidity is in the order of Rs 5 lakh crore
There should not be any concern about liquidity suddenly being tight
Nobody is blaming the major global central banks, but we are dealing with the spill-over of their actions, says Shaktikanta Das, RBI Governor
Actions taken by major central banks to combat inflation has indeed been a shock
It has further accentuated the situation in the global markets
It has created excessive volatility in the currency market
Global currencies are depreciating, bond yields are very volatile
The third shock has added to the uncertainty that has been prevailing
The forward guidance of the U.S. Fed talks about future rate hikes, which are large
The stress on global markets has increased by the actions taken by the global central banks
Source: RBI Governor
The MPC decisions continues to be guided by domestic factors
There are two components in monetary policy framework – growth and inflation
MPC decisions are based on twin objectives, with primacy given to price stability
Other than that, currency market fluctuations, depreciation or appreciation of rupee is not a factor for consideration of the MPC
For dealing with issues not relating to growth and inflation, the RBI has other tools
Source: RBI Governor
Forex reserves at $ 537.5 billion
67 % of the decline due to valuation changes
Accretion of $ 4.6 billion to reserves
Market intervention continued to be judicious
Source: RBI Governor
Umbrella (reserves) continues to remain strong.
In policy tightening it is arduous to provide forward guidance in a continuous evolving climate.
Our actions will be carefully calibrated with data and evolving conditions.
Source: RBI Governor
It has been decided that 28 day VRRR to be merged with 14 day VRRR auction.
Going forward only 14 day VRRR auction will be conducted.
Source: RBI Governor
The RBI does not have any exchange rate in mind
The RBI intervenes to curb excessive volatility
Our actions have helped in anchoring investor confidence
In medium term, the primacy of price stability in our inflation targeting framework provides bedrock for exchange rate stability
Source: RBI Governor
With retail inflation at 7.1% in Q2, 6.5% in Q3, 5.8% in Q4 with risks evenly balanced.
Inflation expected at 5% in Q1FY24.
Source: RBI Governor
Growth in Q2 FY23 seen at 6.3%, Q3 at 4.6% and Q4 at 4.6%
Real GDP Growth in Q1 FY24 is projected 7.2%
RBI retains retail inflation projection for FY23 at 6.7%, says Shaktikanta Das, RBI Governor
Indian basket crude oil price was around $104 in the first half of FY23
Assuming brent crude at $100 per barrel in the second half of FY23
Project CPI inflation at 7.1% in Q2, 6.5% in Q3 and 5.8% in Q4
CPI inflation seen moderating to 5% in Q1 FY24
Source: RBI Governor
Inflation is hovering around 7% and we expected to remain elevated around 6% in the second half
Liquidity remains in surplus
As government expenditure picks up, system liquidity will go up further
Policy rate adjusted for inflation trails the 2019 level
Source: RBI Governor
US dollar has reached a new high
EMEs are confronted with challenges of slowing global growth, elevated food and energy prices, spillovers from advanced economy policies, debt distress and sharp currency depreciation
Economic activity in India remains stable, gives us the confidence of dealing with the current problems
Source: RBI Governor
Repo rate hiked for the fourth time and now stands at 5.9%
Decision to raise policy rate was decided by a majority of 5 out of six.
Remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth
Source: RBI Governor
Covid-19 pandemic and conflict in Ukraine have create profound impact on global economy, says Shaktikanta Das, RBI Governor
Another storm of tough macroeconomic policy and more aggressive guidance by central banks is here
All segments of the financial markets are in turmoil across countries
Global economy is indeed in the eye of a new storm
Indian economy continues to be resilient
Source: RBI Governor's monetary policy address
The broader indices almost mirrored their larger peers. Thirteen of the 19 sectoral indices compiled by BSE Ltd. declined with Information Technology and Oil & Gas losing the most.
The market breadth is skewed in the favour of bulls. About 1,241 stocks rose, 1,039 fell and 111 remained unchanged.
Yield on the 10-year bond rose 2bps to 7.36% at the open
Source: Bloomberg
Indian currency appreciated 25 paise to 81.60, at the open.
Source: Bloomberg
After US markets tumbled in overnight trades, key Asian indices are following suit and hence local equity gauges too are likely to drift lower in early trades Friday. Markets are expected to be volatile before the announcement of the RBI's credit policy decision scheduled in the next few hours time today. Weak global cues will continue to rupture any intraday strength in Nifty. Market is already looking forward to a 50 bps hike in the policy rate in the backdrop of depreciating rupee and retail inflation which continues to be above the central bank's tolerance level of 6%. Also, the rising US bond yields and FIIs taking exit route from domestic equities in the last few sessions are the other dampeners that would keep investors on the edge. Technically speaking, Nifty’s drop to 16483 support appears to be on the table.Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities Ltd
Medical oxygen generator supplier Airox has filed for an IPO to raise Rs 750 crore.
Lohia Corp. has filed for an IPO via sale of 3.17 crore secondary shares.
Source: SEBI
U.S. Dollar Index at 111.89.
U.S. 10-year bond yield at 3.79% on Thursday.
Brent crude up 0.02% to $88.51 per barrel
Nymex crude at $81.41 per barrel.
SGX Nifty down 0.6% to 16,704.5 as of 6:10 a.m.
Bitcoin up 0.2% to $19,542.4.
Adani Power: The Competition Commission of India has approved the acquisition of 100% equity of Diliigent Power and DB Power by Adani Power.
Hero MotoCorp: The company will invest $60 million (about Rs 490 crore) in U.S.-based Zero Motorcycles to jointly develop electric motorcycles.
Vodafone Idea: In response to clarification sought by the exchanges on reports of Indus Towers seeking payment of dues to continue services, the company said that discussions are going on over softer payment terms and are yet to be concluded.
Adani Green: The company commissioned the world's largest wind-solar power plant of 600 MW capacity in Jaisalmer, Rajasthan.
Lupin: The company launched Sildenafil for Oral Suspension, indicated for the treatment of pulmonary arterial hypertension, in the U.S. market. The company has also received USFDA approval for its abbreviated new drug application Mirabegron extended-release tablets.
Maruti Suzuki/Tata Motors/Mahindra & Mahindra: Car sales volumes in India are expected to increase by 12.5% this year and another 4% in 2023, Moody’s said.
Bajaj Electricals: The company received an order for the supply of goods and services under a transmission line project from the Power Grid Corporation of India, aggregating to Rs 332.65 crore.
Zydus Lifesciences: The USFDA completed a pre-approval inspection of the Ahmedabad-based manufacturing facility of Zydus Animal Health and Investments, a wholly owned subsidiary of the company, and issued two observations, none of which were related to data integrity.
Spandana Sphoorty Financial: ICRA assigned an ‘[ICRA]A-; Stable’ rating on non-convertible debentures of the company worth Rs 500 crore.
Shoppers Stop: CARE Ratings upgraded the ratings for short-term bank facilities of the company to CARE A1+.
GMM Pfaudler: The company has completed the acquisition of 46% share capital of GMM International from Pfaudler International and from Millars Concrete Technologies, now holding a 100% stake in it.
Coforge: The company received a U.S. patent for its Copasys automated compliance audit and quality assurance platform, which is built for banks and financial institutions.
Ircon International: The company commissioned doubling work of the 72-km-long Hajipur-Bachhwara section, including electrification. The company was appointed by East Central Railways for this work.
Punjab National Bank: The lender will sell its entire stake in Asset Reconstruction Company (India), amounting to 10.01% of the entire shareholding of the latter.
Rail Vikas Nigam: The company received a contract for construction of 12.25-km-long four-lane highway from Samarlakota to Achampeta Junction by NHAI as a part of Kakinada port to NH-16 connectivity in Andhra Pradesh under the Bharatmala Project on EPC mode at a total cost of Rs 408 crore.
Life Insurance Corporation of India/Deepak Nitrite: The LIC increased its shareholding in Deepak Nitrite from 4.977% to 5.028%.
Arvind SmartSpaces: The company’s board approved the consolidation of its partnership interest in Ahmedabad East Infrastructure LLP from 51.43% to 55.24% and profit sharing in the same from 94.25% to 98.00% upon the acquisition of the entire partnership interest of Arvind Infrabuild LLP in AILLP.
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