RBI liquidity measures cheer markets; Sensex up 327 pts, Nifty tops 11,900

All that happened in the markets today

3:43 PM

SECTOR WATCH | Nifty Bank gains nearly 3%

3:42 PM

MARKET AT CLOSE | Gainers and losers on the S&P BSE Sensex

3:36 PM

CLOSING BELL

The S&P BSE Sensex soared 327 points, or 0.81 per cent to settle at 40,509 while NSE's Nifty ended at 11,914, up 80 points, or 0.67 per cent. 

3:12 PM

BSE Midcap index trades flat

3:04 PM

Majesco hits new high, trades above proposed buyback price of Rs 845

Shares of Majesco hit a fresh record high of Rs 889, up 5 per cent on the BSE in intra-day trade on Friday. The shares were trading above the proposed buyback price of Rs 845 per share. The stock surpassed its previous high of Rs 884.85, touched on Wednesday, October 7. At 02:34 pm, the stock was trading 4 per cent higher at Rs 880, against a 0.75 per cent rise in the S&P BSE Sensex. READ MORE

2:56 PM

Australia's largest investment funds plan entry into India, meet NIIF

Australia’s largest investment funds, collectively managing assets of more than A$736 billion (Rs 38 trillion) on Thursday met National Investment and Infrastructure Fund (NIIF) on Thursday to explore investment opportunities in India. READ MORE

2:48 PM

Heatmap: S&P BSE Sensex gainers and losers at this hour

2:40 PM

Stocks that hit 52-week high on BSE today

COMPANY	PRICE(rs)	52 WK HIGH	CHG(%)
APOLLO HOSPITALS	2264.00	2313.00	0.69
BIOCON	452.15	477.90	-3.66
CADILA HEALTH.	438.20	447.95	0.52
CIPLA	803.85	825.00	-0.93
GARWARE TECH.	2125.00	2249.95	-3.97

2:30 PM

Vedanta de-listing

As per the latest data available at exchanges, total 127.86  crores shares have been offered at different prices, with maximum bids happening in between Rs 145 - Rs 160 as compared to floor price of Rs 87.25. We expect that the discovered price may end up being much higher than the floor price and there could be a possibility of the promoters coming out with a counter offer. Currently the promoters own 50.14% of the shares in the company and will need to increase their holdings to at least  90% for successful delisting. The Reverse Book building process for price discovery is currently under progress and today is the last day for bidding. We believe that It would be prudent for retail shareholders to participate in the Reverse book building process.

(Source: Angel Broking)

2:28 PM

COMMENT:: Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life

“As expected, the RBI kept policy rates unchanged, but said that it will maintain accommodative stance in current and next fiscal year—indicating a dovish undertone. The central bank announced various liquidity measures and other measures to help improve credit growth esp. for certain segments. The bond markets have therefore reacted positively with yields falling post the policy announcement, and for the equity markets--sectors like banking, NBFCs (esp home loan providers) have reacted most positively. Overall the monetary policy has been very supportive of growth with ample liquidity measures. We also believe that the worst is behind and that the economy is on the recovery path.”

2:23 PM

UPDATE :: Nifty Bank at day's high

2:19 PM

RBI announces a mix of unconventional steps to check borrowing costs

While the Monetary Policy Committee retained the repurchase rate at 4% and kept its accommodative stance, Reserve Bank of India Governor Shaktikanta Das used a generous mix of tools to assure the bond market that the central bank will keep yields under control despite the government’s record debt program, and also help banks lower lending rates. READ MORE

2:14 PM

Rupee Closing

Rupee ends higher at 73.13 per US dollar vs Thursday's close of 73.24/$

2:10 PM

Larsen & Toubro up 4% after sinking 11% in 7 wks; Jefferies maintains 'Buy'

Analysts at Jefferies said an early recovery in macro investment cycle should see a sharp pick-up in the company's order flow and valuations. The Middle East (ME) margin contraction factored-in does not come through in case of better margin order flow. READ MORE

2:03 PM

Top losers on the BSE at this hour

1:55 PM

COMMENT:: Navneet Munot, CIO, SBI Mutual Fund

"The RBI left the rates unchanged and yet delivered an extremely dovish monetary policy by taking measures to keep the risk free rate low and providing on-tap liquidity. Looking through the transient inflationary hump and supporting growth was a clear message sent out in today’s policy. Overall, the forward guidance was extremely favourable as there was an explicit message to keep policy accommodative at least until FY 2022."

1:50 PM

NEWS ALERT :: HAL employee arrested for supplying fighter aircraft info to Pakistan's ISI: Maharashtra police

(Via PTI)

1:47 PM

COMMENT :: Sunil Kumar Sinha, Principal Economist, India Ratings and Research

As expected, RBI’s monetary policy committee kept the policy rate unchanged at 4% and decided to continue with the accommodative stance in its October 2020 review.  The articulation to continue with the accommodative stance in the next financial year clearly indicates that despite uneasiness due to the elevated  retail inflation, it is in no hurry to reverse rate cycle. On the contrary, it suggests that RBI is willing to wait longer for retail inflation to correct and if incoming data is going to be favourable then another round of rate cut is possible. RBI’s optimism on the inflation front is based on – (i) easing of supply side disruption, (ii) weak demand conditions and (iii) bumper Kharif harvest as it expects the retail  inflation to decline to 4.3% in 1QFY22.  India Ratings and Research believes, in the interim, a long pause on the policy rate looks like the most likely outcome since the impact of past rate cuts is still playing out.

 

On the liquidity front, RBI stated that it will maintain comfortable liquidity conditions and will continue to conduct market operations in the form of outright and special open market operations. Inclusion of SDLs as a special case for doing OMOs during the current financial year is welcome move. This will not only reduce SDL spread bur help states to raise resources at more competitive/reduced rate to finance their fiscal deceit.

1:42 PM

RBI keeps policy rates unchanged, stance accommodative: What experts think

The Reserve Bank of India Monetary Policy Committee on Friday voted to keep key rates unchanged and maintained an accommodative stance, announced Governor Shaktikanta Das. With this repo rate stays at 4.0 per cent while reverse repo rate stays at 3.35 per cent The development comes amid signs of recovery in the economy badly battered by the coronavirus pandemic. READ MORE

1:33 PM

COMMENT:: Jimeet Modi, Founder & CEO, Samco Group

The RBI MPC has continued its accommodative stance and maintained the status quo on repo rates. The outcome was as per expectations but it was the good commentary on GDP outlook and the liquidity measures announced that cheered D-Street. Real estate, the largest share in terms of gross domestic wealth is expected to benefit the most as the RBI has allowed flexibility in home loans which will give more freedom to HFCs to lend aggressively which will also mean reduced rates for home buyers as the competition to lend intensifies. The on-tap TLTRO will also nudge credit pickup as raising money will become easier for smaller players. If that wasn’t all, digitisation has also been given a boost; RBI has announced around-the-clock availability of RTGS from December 2020 which will reduce costs and encourage digital transactions. All these proactive measures undertaken by the Indian central bank to revive growth and stimulate the economy will go down well with capital markets. 

1:31 PM

Sector Watch :: Pharma stocks decline in trade

1:23 PM

European indices trade higher in early deals

1:15 PM

COMMENT :: Bekxy Kuriakose, Head – Fixed Income, Principal Asset Management on RBI policy

The rate cutting spree of last five months had lulled most market participants into thinking that perhaps RBI will continue to push the pedal. However by a unanimous vote RBI prudently decided to keep rates unchanged with accommodative stance. No doubt the recent spikes in CPI inflation (April to June) due to cost push pressures was the most important factor to consider. RBI expects that supply chain disruptions will likely remain elevated in the next few months to come. 

 

Relief in the form of developmental measures is being given to MSME borrowers with restructuring being allowed for accounts which were standard as on 1st March 2020. Relief is also being given for households and individuals who wish to borrow against gold with permissible LTV being hiked to 90% from 75% earlier.

 

Outlook: We think the possibility of further rate cuts is not ruled out but for that to happen CPI inflation needs to show meaningful downward trend closer to 4% which may happen towards latter part of FY 2021. Meanwhile RBI will continue with other measures to aid credit flow to needy sectors and ensure monetary transmission. While a calendar or quantum of further OMOs was not mentioned we expect OMO purchases to continue while being episodic in nature. The disappointment of no rate cut may lead to a selloff of 5 to 10 bps in the near term. We advise investors to maintain a balanced asset allocation within debt funds with short term debt funds being the preferred category.

1:07 PM

Gold ETFs continues to see inflows for sixth straight month in September

The Gold ETF category continued to receive net inflows for the sixth straight month in September. The category received inflows of Rs 597 crore in September, taking its year-to-date total to Rs 5,957 crore, data from Association of Mutual Funds in India show. Gold prices came-off its all-time high of about Rs 56,200 it hit in August, after witnessing almost an uninterrupted rally this year. READ MORE

1:01 PM

COMMENT :: Anagha Deodhar – Economist, ICICI Securities on the RBI Monetary policy

The unanimous vote to keep repo rate unchanged is in line with our expectation, given high inflation and expected inflation trajectory. Despite no rate cut, the policy is extremely dovish due to the liquidity and regulatory measures announced today. More specifically, we believe ‘on tap TLTRO’, OMOs in state development loans, extension of HTM limits till Mar ‘22, and rationalisation of risk weights on housing loans are very important measures and are likely to ease financial conditions further and provide support to key sectors of the economy.

 

The committee also gave forecasts on growth and inflation.

 

After the sharp 24% contraction in Q1FY21, the MPC expects growth to come in at -9.8% in Q2, -5.6% in Q3 and 0.5% in Q4. We agree with the committee’s assessment that manufacturing sector is likely to drive the recovery while relatively more contact-intensive services sector could take a while to recovery.

 

On the inflation front, the governor noted that the recent pick-up in inflation is due to supply disruption and higher markups during lockdown. Going forward, as supply chains are restored inflation could ease to 4.5-5.4% in H2FY21.

12:56 PM

Views on RBI policy by Abheek Barua, Chief Economist, HDFC Bank

Today’s monetary policy was as aggressively accommodative as possible without cutting the policy rate. The decision to remain accommodative for an extended period and to look through “transient humps” in inflation reveals an appreciation for the basic principles of economics –that a GDP contraction of 9.5 per cent is simply not compatible with demand side inflation pressures. If inflation has persisted over the RBI’s target limit, it has been driven by persistent supply side problems. Persistence itself cannot transform a supply driven problem to a demand side concern amenable to monetary policy driven containment. Given the stance, there is a significant probability of a rate cut in February, if not in December itself as inflation, as we expect, moderates.

12:52 PM

Havells India gains 3% on hopes of improvement in operational performance

In the past five days, the stock has rallied 7 per cent, after the company said it has decided to shift its switchgears production capacity from Guwahati location to its existing facilities at Baddi location in order to have benefits of synergy. Last month, on September 24, a leading fast‐moving electrical goods (FMEG) company -- Lloyd -- announced its entry into the refrigerator segment under its consumer durable brand. The refrigerators will be available in capacities ranging from 190 litres to 587 litres, and at an introductory offer price range from Rs 10,000 to Rs 84,990, it said. READ MORE

12:45 PM

RBI to conduct on-tap TLTRO worth Rs 1 trillion to nudge credit growth

The liquidity availed under the scheme can also be used to extend bank loans and advances to these sectors. The TLTRO will be for tenors of up to three years and for a total amount of up to Rs 1 trillion at a floating rate linked to the policy repo rate for banks. READ MORE

12:37 PM

Top gainers on the BSE at this hour

12:29 PM

Views on RBI policy by Naveen Kulkarni, CIO, Axis Securities

"The RBI October 2020 policy, while being on expected lines of pause in rate cuts and maintaining an accommodative stance, has addressed the continuation of liquidity support for the sector. On-tap TLTROs and OMO purchases lowering bond yields will ease liquidity. Aligning risk-weights for individual housing loans to Loan to Value (LTVs) will help home lenders, in turn, also driving demand for the stressed real-estate sector. Macro outlook for FY21 looks muted with a decline forecast in GDP by 9.5%, but buoyancy in rural demand and sector-specific improvement could lead to a gradual recovery."