Sensex up 460pts, Nifty tops 17600 on dovish RBI policy; bond yields dip 1%

CLOSING BELL

Markets cheered the Reserve Bank of India's (RBI's) first monetary policy for the calendar year 2022 where it kept key policy rates unchanged and continued with its accommodative stance to support growth. This was the tenth straight policy when the repo rate was left unchanged at 4 per cent and the reverse repo rate at 3.35 per cent. READ ABOUT IT HERE

While the RBI decided to roll back some of the operational measures pertaining to the liquidity framework – announced when the coronavirus (Covid-19) pandemic struck two years ago - the tone of the policy remained more dovish than what was expected resulting in bond and stock prices surging. 

Against this backdrop, the S&P BSE Sensex surged 594 points from the day's low and ended 460 points, or 0.8 per cent, higher at 58,926. The index had hit a high of 59,060 in intra-day deals.

On the NSE, the Nifty50 climbed 142 points, or 0.8 per cent, to settle above the 17,600-mark at 17,606.

Tata Steel, Infosys, HDFC Bank, HDFC, Kotak Bank, M&M, Power Grid, and NTPC were the top Sensex gainers today, up between 1 and 2 per cent.

On the downside, Maruti Suzuki, Ultratech Cement, Nestle India, RIL, and Titan Company ended in the negative zone, down up to 1.7 per cent.

The broader indices, however, underperformed the frontline indices where the BSE MidCap and SmallCap indices closed 0.3 per cent and 0.04 per cent higher, respectively.

The gains were largely broad-based on the bourses today with the Nifty Bank, Financial Services, IT, Metal, and Private Bank indices rising more than 1 per cent each. The Nifty PSB and Auto indices were the only 2 indices that ended 0.05 per cent down each.

RBI Policy Key Takeaways

RBI projected real GDP growth at 7.8 per cent for 2022-23; 17.2 per cent for the Q1, 7 per cent for Q2, 4.3 per cent for Q3 and 4.5 per cent for Q4. The growth projection for the next financial year is lower than what the government estimated, between 8 to 8.5 per cent

Assuming a normal monsoon, CPI inflation for 2022-23 is projected at 4.5 per cent with Q1:2022-23 at 4.9 per cent; Q2 at 5.0 per cent; Q3 at 4.0 per cent; and Q4 at 4.2 per cent.

RBI also announced four steps to restore the liquidity framework, including keeping variable rate repos (VRRs) and variable rate reverse repos (VRRRs) of 14-day tenor as the main liquidity management tool.

Policy impact

NIFTY PSU BANKS (NIFTYPSUBA)

Likely target: 3,600

Upside potential: 11%

The week started with PSU bank index hitting a new 52-week high and showing stability above 3,000 level. The next immediate resistance falls at 3,400 and the momentum seems to be heading in the same direction. READ MORE

Money and forex markets
The 10-year govt bond yields were down 0.99 per cent at 6.7 per cent on Thursday, cooling off from 6.9 per cent level seen earlier this week.

The rupee, meanwhile, ended at 74.9 per US dollar compared with Wednesday's close of 74.8 per $.

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Markets at 02:30 PM

LIVE market updates: The key benchmark indices continue to hover near the highs of the day, even as the broader markets lagged in terms of performance.

The BSE Sensex touched a high of 59,060, and was up 546 points at 59,012. The NSE Nifty gained 160 points at 17,624.

Kotak Bank and HDFC Bank were up 2.3 per cent each. HDFC and Tata Steel added 2 per cent each. PowerGrid, Infosys, NTPC, Bajaj Finserv, SBI and Axis Bank were the other notable gainers.

The broader indices however underperformed the benchmark. The BSE Midcap and Smallcap indices were up 0.4 per cent and 0.2 per cent, respectively, as against a 0.9 per cent gain on the BSE benchmark.

A total of 157 stocks hit a fresh 52-week high in trades so far on the BSE including the likes of DB Realty, GMDC, GNFC, Jagran, Mahindra Lifespace Developers, Maruti Suzuki, National Aluminium, Reliance Infra, Speciality Restaurants, TV18 Broadcast and Zee Media. Whereas, 23 stocks registered a new 52-week low including Bajaj Consumer Care, HDFC Life, Jubilant Pharma, Orchid Pharma, Solara Active Pharma, Vijaya Diagnostic and Zydus Wellness.

Similarly, 242 stocks were locked at their respectively upper limits, while 310 stocks hit the maximum lower limit for the day.

Meanwhile, the major markets in Europe held marginal gains in early trades. The FTSE 100 and CAC 40 were up 0.3 per cent each, and the DAX 30 gained 0.7 per cent. The US futures indicated a quiet start to trade for its benchmarks later in the day ahead of the key inflation numbers. Dow Jones futures were up 0.1 per cent, while Nasdaq futures were down 0.2 per cent.

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Markets at Lunch (01:30 PM)

LIVE market updates: The key benchmark indices continue to hold steady gains on the back of smart gains in banking and financial shares. 

The BSE Sensex touched a high of 59,009, and was up 470 points at 58,936. The NSE Nifty gained 138 points at 17,602.

Kotak Bank, HDFC Bank and HDFC were the top gainers among the Sensex 30 shares, up 2.2-2.5 per cent each. The trio accounted for more than 50 per ent of the gains on the BSE benchmark index.

Tata Steel, PowerGrid Corporation, SBI, NTPC, Infosys, Axis Bank and Bajaj Finserve were the other notable gainers.

Whereas, Maruti down a per cent was the only prominent loser among the Sensex-30 pack..  

The broader indices where underperforming the benchmark indices marginally. The BSE Midcap and Smallcap indices were up 0.4 per cent and 0.1 per cent, respectively, as against 0.7 per cent gain on the BSE Sensex.

The overall breadth was also marginally negative, with 1,681 shares declining versus 1,584 advancing stocks on the BSE so far.

In the broader markets, Adani Power, Adani Wilmar, NDTV and Kirti Industries were locked at the respective 20 per cent upper circuits on the BSE. Birla Cable, Pressman Advertising, Nagarjuna Fertilisers, Vadilal Industries, Nahar Industrial Enterprises, Buterfly Gandhimathi, Poddar Housing, Hindustan Composites, Banco Products, TV18 Broadcast, Subex, Himatsingka Seide, Redington India and Mahindra Lifespace Developers were some of the other significant gainers.

On the other hand, GE Power India and Solara Active Pharma were locked at the respective 20 per cent lower limits. Mro-tek Realty, Delta Manufacturing, Shiva Mills, Aries Agro, Nykaa, Keynote Financial Services, Ausom Enterprise, Ugar Sugar Works, Quess Corp, Stove Kraft, Hitachi Energy and Sunflag Iron were some of the other major losers.

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Markets at 12 noon

LIVE market updates: The frontline indices extended gains in noon deals as market sentiment continued to be upbeat after the RBI policy decision. The BSE Sensex was up 500 points at 58,967 levels, while the NSE Nifty50 was 149 points higher at 17,613. 

Strong gains in HDFC twins, Infosys, Kotak Bank, SBI and Bajaj Finance were leading the upmove. Financial stocks gained signifcantly as the key lending rates remained unchanged. On the Nifty, ONGC and Tata Steel were the top gainers. 

The broader markets, however, were underperforming the benchmarks with the BSE SmallCap and MidCap indices up 0.03 and 0.35 per cent, respectively. In comparison, the Sensex and Nifty were up 0.88 per cent. 

Also, READ HERE to know what analysts make of the RBI policy as bond and equity markets turn calmer post the outcome.

Sectorally, the Nifty Financial Services index was up 1.45 per cent, leading gains. Nifty Metals was the other top gainer, trading 1.2 per cent higher. 

Buzzing stocks

Shares of New Delhi Television (NDTV) surged 18 per cent to Rs 138 on the BSE in Thursday's intra-day trade after the company reported a consolidated net profit of Rs 27.6 crore in December quarter (Q3FY22). NDTV said its Q3 was the most profitable quarter for the Group in the last nine years. READ HERE.

Adani Wilmar was locked at upper circuit for the second straight day, up 20 per cent at Rs 386.25 on the National Stock Exchange (NSE) on Thursday, thus also hitting a new high since its market debut on Tuesday. A sharp rally in market price of Adani Wilmar has seen, the company join an elite group of companies having market capitalisation (market cap) of Rs 50,000 crore. READ HERE IN DETAIL

And, shares of staffing firm Quess Corp tumbled on the BSE, trading 11 per cent lower after a moneycontrol report said that that the Group CEO and board member Suraj Moraje is likely to step down from his position. Quoting sources, the report said that Moraje's exit was likely due to differences in strategy between him and company' s promoter Ajit Isaac. 
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Markets at 11 AM

LIVE market updates: The equity markets shrugged off day's early volatility and progressed higher as the Reserve Bank of India's status quo policy, keeping key rates unchanged cheered investor sentiment. 

The BSE Sensex was now up 414 points at 58,880, while the NSE Nifty was at 17,581, higher by 118 points. The two indices were up by 0.7 per cent each. 

"Contrary to many central banks, RBI acted dovish and kept interest rates unchanged with an accommodative stance. There were expectations that RBI may hike the reverse repo rate and may change its stance to neutral from accommodative in tandem with hawkish global central banks amid rising inflation. RBI believes that inflation will peak out soon and there is a need for continuous support to the economy," said said Parth Nyati, founder, Tradingo.

Nyati added that going ahead, it will be important to see how the market will read into this as there could be a risk that RBI will remain behind the curve, which may cause inflation. That said, the overall structure looks bullish for Indian market after a recent correction. Rate-sensitive sectors like infra, real estate, auto, and financial may continue to outperform, he said.  

On the bourses, shares of rate sensitives sectors like financials including banks, non-banking finance companies (NBFCs) and housing finance companies (HFCs), automobiles and real estate rallied smartly on the accomodative stance of the central bank. READ IN DETAIL HERE.

Nifty Bank and Nifty Financial Services indices were now trading over 1 per cent each. Nifty Private Bank index was also up 1 per cent, while PSB index recovered its losses, trading in the green zone, up 0.4 per cent.  

Among Sensex-shares, Kotak Bank and HDFC were the top gainers, up 2.9 per cent and 2.4 per cent, respectively, followed by Tata Steel, HDFC Bank, Bajaj Finance, PowerGrid, Bajaj Finserv, SBI, Infosys, Axis Bank and IndusInd Bank. 


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Markets at 10 AM

LIVE market updates: The benchmark indices were seen turning into the green zone overcoming the day's volatility after the RBI kept the repo rate unchanged at 4 per cent, maintaining its accomodative stance to revive economic growth. The reverse repo rate also remained unchanged at 3.35 per cent. 

The BSE Sensex rose over 142 points at 58,608. The NSE Nifty was up 50 points at 17,513. The indices were highly choppy earlier before the policy decision announcement. 

Of the 30-sensex shares, only 10 were now trading in the red zone, led by losses in Bharti Airtel, Asian Paints, Maruti, Bajaj Finserv, ITC, HUL, M&M, ICICI Bank and Reliance, trading 0.5-1.3 per cent down. On the Nifty 50 index, 29 stocks were declining. 

Sectorally, Nifty Auto and FMCG indices were leading losers, down 0.3 and 0.7 per cent, while Nifty Metals was the top outlier and was trading 1.3 per cent higher. 

Meanwhile, as per a CNBCTV-18 report, state insurer LIC's IPO draft papers are likely to be filed with the SEBI tomorrow as the IRDAI has given it a go-ahead for the public offer. 

Among stocks, shares of Solara Active Pharma Sciences were locked at 20 per cent lower circuit limit at Rs 775.05, also its 52-week low, on the BSE on Thursday after the company reported a consolidated net loss of Rs 140 crore in December quarter (Q3FY22), due to lower revenue. READ MORE. 

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Opening Bell

LIVE market updates: The key benchmark indices opened with strong gains on Thursday extending the rally into a third session. The BSE Sensex was up 197 points at 58,663, while the NSE Nifty was at 17,534, higher by 71 points.

PowerGrid, Infosys, HDFC Bank, Tata Steel, Kotak Bank, NTPC, HDFC, Axis Bank, SBI, HDFC Bank and L&T were the top Sensex gainers, trading 0.2-2.4 per cent higher. ONGC, Tata Motors, and JSW Steel were the top Nifty gainers, up 1-2.5 per cent. 

Asian Paints, Maruti, HUL, Bajaj Finserv, Reliance, Sun Pharma, Bharti Airtel, ICICI Bank, Coal India, Indian Oil Corp, and SBI Life meanwhile, were the top losers on the bourses, down 0.4-1.5 per cent. 

In the broader markets, the BSE MidCap and SmallCap indices were muted with the former up 0.01 per cent and the latter 0.1 per cent down, respectively. 

Sectorally, the Nifty Metal and IT indices were leading gains, trading 0.5 per cent higher each. Nifty Auto and FMCG were weak, while rest of the indices were largely unchanged. Nifty Bank and Financial Services were up 0.12 per cent. 

Among individual stocks, Nykaa was trading 4.4 per cent lower on the BSE on the back of its Q3 numbers. The e-commerce company reported a 59 per cent YoY drop in Q3FY22 net at Rs 28 crore. Total revenue however increased 36 per cent YoY to Rs 1,098 crore.

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Pre-open session

LIVE benchmark indices: The benchmark indices held strong gains in the pre-open trades. The BSE Sensex was up 343 points at 58,809, while the NSE Nifty was at 17,554, higher by 90 points.

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LIVE market updates: The key benchmark indices are likely to start Thursday's session on a muted note with mild gains ahead of the crucial RBI MPC meeting outcome. At 8:05 am, the SGX Nifty Futures were quoting 17,510 level, up 30 points from Nifty's spot close the previous day. 

The RBI policy decision could be a key driver for the market in the near term as it may impact liquidity and interest rates. Experts believe a 25 bps points hike in reverse repo rate is on the cards. 

Among stocks, Amara Raja Batteries, BEML, Hero MotoCorp, Hindalco Industries, Dr Lal Pathlabs, Lemon Tree Hotels, M&M, Quess Corp, Tata Chemicals and Trent will report their quarterly earnings today.

Nykaa, ACC, SAIL and Tata Power may also be in focus as investors will react to their Q3 numbers announced on Wednesday. READ MORE.

Global cues

The US indices ended with smart gains on Wednesday amid a fall in 10-year Treasury yield. Dow Jones gained 0.9 per cent, the S&P 500 jumped 1.5 per cent and Nasdaq surged 2.1 per cent. On Thursday, the markets will look for cues from inflation numbers, which analysts expect to hit a four-decade high at 7.3 per cent.

Oil prices, also, rose on Wednesday after US inventories reported a decline of 5 mn barrels, indicating higher demand. Brent crude futures advanced 0.9 per cent to $91.55 a barrel, and WTI crude ended 0.3 per cent up at $89.66 a barrel.

Major markets in Asia lacked direction in early trades this morning. Nikkei, Kospi and Taiwan were up – up to 0.3 per cent, while on the other hand, Hang Seng, Shanghai Composite and Straits Times were down – up to 0.3 per cent.