RBI loan restructuring option, hike in gold LTV sees Sensex end 362 pts up

All that happened in the markets today

3:54 PM

Market Closing Comment :: Vinod Nair, Head of Research at Geojit Financial Services

Indian benchmark indices came off highs but still closed out a volatile day with gains, following RBI commentary regarding interest rate outlook. Although expectations of a rate cut were there, RBI kept rates on hold, following a rise in inflation. However, it has indicated that monetary policy will remain accommodative until growth revives. We believe that if inflation remains under control, there will be further policy easing from the central bank. With this event out of the way, markets expected to turn focus back on earnings visibility and quality.

3:47 PM

BSE Snapshot at Close

3:44 PM

Stocks that supported Sensex's 360 pts-rally

3:43 PM

Sectoral trends on NSE at Close

3:39 PM

Sensex Heatmap at Close

3:37 PM

Closing Bell

>> Benchmark S&P BSE Sensex index settled the day at 38,025 level, rallying 362 points or 0.96 per cent. The index hit an intra-day high of 38,221.

>> The broader Nifty50, meanwhile, ended at the psychological level of 11,200, up 99 points or 0.89 per cent. The index hit an intra-day high of 11,257.

3:33 PM

COMMENT ON RBI POLICY :: Niranjan Hiranandani, President, Assocham

A Positive step by Reserve Bank of India to pay heed to India Inc’s long pending demand of Onetime restructuring of loans without classifying them as NPAs, by setting up an expert committee steered by KV Kamath. Opening up the window for restructuring of loans to companies, individuals and MSME under mandated safeguards grants breather to the liquidity strapped industry. A flexible repayment scheme under the new resolution framework shall bring in the much-needed relief to resume operations smoothly.

3:28 PM

Valuation drop, legal complications likely to hit HDIL's sale prospects

Real estate major HDIL may find good offers hard to come by, given the slump in the real estate sector, litigation woes, and arrest of its promoters. The Mumbai-based firm had earlier attracted attention from top players like Adani Properties, SunTeck Realty, and Suraksha Asset Reconstruction Company (owned by the Dilip Shanghvi family). READ MORE

3:25 PM

INDEX GAINER:: Infosys surges 3%

3:18 PM

MARKET CHECK:: BSE Healthcare index up 1%

3:09 PM

Steel Strips Wheels bags manufacturing orders worth $2,09,000 for US market

Steel Strips Wheels Ltd (SSWL) said the orders are worth $2,09,000. It said similar orders are expected in times to come from other regular customers as the market remains normalcy.

 

"This will support further ramping up of production at Chennai steel wheels plant," it added. READ MORE

2:59 PM

COMMENT ON RBI POLICY :: Dhiraj Relli, MD & CEO, HDFC Securities

The outcome of MPC of RBI’s meeting was on expected lines. Additional special liquidity facility to NHB and NABARD to help the housing sector and agriculture/rural activities is welcome. However, raising of LTV on gold loans to 90% from 75% may have some delayed impact as lenders may be wary of lending upto 90% after Gold prices have already run up too much over the past few months.

Key provision of restructuring of loans to borrowers who were not in default on March 01 through recommendation of KV Kamath committee cannot have come sooner. The committee’s recommendations will enable ensuring prudent entry norms, clearly defined boundary conditions, specific binding 10 covenants, independent validation and strict post-implementation performance monitoring. Mention of outer limit of 2 years for the resolution and raising the provision limits to 20% for lenders not signing inter-creditor agreement will help speeden the resolution process and maintain the soundness of the banking system.

Overall the outcome of MPC meet this time around is prudent, to the point and meets the current requirements of the lending community though the borrowers may want something more. What will be crucial to watch is the challenges faced by the committee in making its recommendations considering the viewpoints of the parties involved and ensuring the success of the plan.

 

 

2:52 PM

India must look beyond what rating agencies think, says Raghuram Rajan

Former Reserve Bank of India governor Raghuram Rajan said on Thursday that overly focusing on what sovereign rating agencies think can take one's eyes off what needs to be done for the economy. "It is also important to convince both domestic and international investors that after the crisis associated with the pandemic is over, we will return to fiscal responsibility over the medium term, and the government should do more to convince them of that," Rajan told the Global Markets Forum. READ MORE

2:47 PM

HDFC Bank's delayed reports to draw in Indian regulator

Indian banks seeking to assess the credit worthiness of borrowers depend on data from credit bureaus like Experian, particularly at a time when soured debt is expected to surge due to the coronavirus pandemic. Lenders are obliged by the RBI to provide information on their borrowers to Experian and three other credit bureaus on a monthly basis. HDFC Bank has in recent weeks brought its information up to date, the people said. READ MORE

2:37 PM

MARKET CHECK:: Top 5 gainers on the BSE at this hour

2:29 PM

MARKET CHECK:: Sensex pares gains

2:20 PM

Debt restructuring to help India Inc to tide over Covid crisis: CEOs

A host of Indian companies led by airlines, hotels, travel and tourism, real estate and media are expected to fall into a financial crisis, as their cash flows dried up due to the nationwide lockdown announced by the Indian government to contain the Coronavirus pandemic.

 

“We want to see immediate action by August end. Debt restructuring is important if the companies need to survive and do not lay off employees,” said the CEO of an airline asking not to be quoted. READ MORE

2:08 PM

RUPEE CHECK:: Rupee ends at 74.93 / US dollar Vs Wednesday's close of 74.94

2:00 PM

NEWS ALERT :: Unichem Lab gets US FDA nod for Tolterodine Tartrate tablets

1:56 PM

5 rate sensitive stocks that look bullish on the charts post RBI policy

The Reserve Bank of India (RBI) decided to keep the benchmark repo rate unchanged at 4 per cent on Thursday and the reverse repo rate at 3.35 per cent. In its outlook for the rest of the year, the RBI MPC noted that inflation was expected to remain elevated in the second quarter of 2020-21 and ease thereafter in the second half of the year. READ MORE

1:43 PM

RBI extends debt restructuring for MSME, ups gold LTV ratio; bank stks gain

Rate sensitive stocks such as financials and realty counters soared in the afternoon session on Thursday after the Reserve Bank of India, in its second bi-monthly policy for financial year 2020-21 (FY21), kept repo rate unchanged at 4 per cent. Auto stocks, on the other hand, declined on profit booking. READ MORE 

1:34 PM

Pragmatic view taken by the RBI; still expect rate cuts going ahead

The repo rate call was a tough one to take considering that inflation is high and at the upper level of the band. Going strictly by the book, a rate hike or change in stance could have been called for. However, if one goes back to March 2020 and the subsequent announcements in April and May, it is clear that the MPC was going to wear the bifocals and also look at growth which is definitely in the negative zone. READ MORE 

1:24 PM

COMMENT ON RBI POLICY :: Lakshmi Iyer, CIO (Debt) & Head of Products, Kotak Mahindra AMC

Status quo was on expected lines. Today’s inaction in no way suggests a U-turn in interest rate trajectory. The MPC members have been mindful of the recent spike in CPI inflation, hence the inaction seems valid. Growth worries remaining, the accommodative bias suggests scope for further easing as inflation recedes in the second half of Fy21. We expect benign rate scenario to remain conducive for bonds

1:19 PM

COMMENT:: Anuj Puri, Chairman, Anarock Property Consultants on RBI policy

Much along the expected lines, the RBI kept repo rate untouched at 4% and reverse repo rate at 3.35% amid a recent rise in retail consumer prices. The RBI was expected to do all it can to keep the inflation rates reined in for the duration. However, the RBI announced several additional measures that will go on to accelerate the economy, enhance liquidity, improve the flow of credit, and deepen digital payment facilities, among others. Commendably, its allotment of Rs 5,000 crore each to National Housing Bank and NABARD is a much-needed step for sectors including real estate reeling under the liquidity crisis. It will help infuse capital into the HFCs and eventually provide relief to developers battling liquidity issues in Covid-19 times.

1:10 PM

COMMENT:: Naveen Kulkarni, CIO, Axis Securities on RBI policy announcement

"RBI has maintained the rates unchanged which is in line with our expectation. At the current inflation, the CPI has been quite sticky around 6%, so further cut in interest rates was not warranted. RBI continues to maintain good liquidity in the system which is encouraging. The markets have reacted positively, especially the Bank Nifty which is reacting to the recasting and restructuring of loan profiles. The increase in LTV for gold is positive and also drives priority sector loans which will help growth. LTV for advances against Gold loans increased to 90% from 75% - positive for gold financiers. Overall, it is positive for the financial services system"

1:07 PM

COMMENT:: Deepthi Mary Mathew, Economist, Geojit Fin Services on RBI policy

"RBI acted judiciously by keeping the rates unchanged. The surplus liquidity in the banking sector and the expectation of inflation rate to remain at the elevated levels in Q2FY21 guided RBI’s decision. One of the major announcements was with regard to raising LTV for gold from 75 per cent to 90 per cent. This would be beneficial to Indian households in the wake of rising gold prices." 

1:06 PM

MARKET CHECK:: Sensex extends gains, surges 500 pts

12:56 PM

RBI monetary policy review: Repo rate unchanged at 4%; stance accommodative

The decisions were announced after the 24th bimonthly meeting of the RBI's six-member Monetary Policy Committee (MPC), headed by Governor Shaktikanta Das. Repo rate is the rate at which the RBI lends to commercial banks, and reverse repo is the rate at which it borrows from them. READ MORE 

 

12:52 PM

MARKET CHECK:: Most realty stocks gain, Nifty Realty index up 1.5%

12:51 PM

Relief for MSMEs

It has been decided that stressed MSME borrowers will be made eligible for restructuring their debt under the existing framework, provided their accounts with the concerned lender were classified as standard as on March 1, 2020. This restructuring will have to be implemented by March 31, 2021: RBI