MARKETS ON THURSDAY: Sensex up 578 pts; RBI holds rates; inflation outlook cut

All that happened in the markets today

4:00 PM

COMMENT ON RBI POLICY

As expected, the RBI in its first bi-monthly monetary policy statement for 2018-19 kept the policy rate unchanged at 6.0%. Also, the tone of the policy commentary suggest that despite several uncertainties surrounding the inflation trajectory, RBI is not in a hurry to change its neutral stance of monetary policy.

Although RBI has listed a number of issues such as - (i) revised MSP announced in the FY19 Union Budget, (ii) staggered impact of HRA revisions by various state governments, (iii) another round of fiscal slippage both at the central and select state governments and (iv) industrial outlook survey of RBI indicating rise in input and output prices and (v) volatility in crude oil prices - to put pressure on inflation during the coming months, it is still hopeful of CPI remaining in the range of 4.7%-5.1% during 1HFY19 and 4.4% in 2HFY19. India Ratings and Research therefore believes that RBI may remain in a pause mode in the near term so far as policy rate is concerned

3:58 PM

MARKET COMMENT Devang Mehta, Head – Equity Advisory, Centrum Wealth

There has been consistent improvement in certain macros & important data points like better than expected 3rd quarter GDP, pick up in the manufacturing sector & industrial production, excellent auto sales numbers & pick up in credIt growth. With revised lower Inflation trajectory by RBI, Equity markets were clearly enthused. We have been constantly advising clients to accumulate good quality stocks in a market which has corrected both in terms of valuations & price points. We continue to be bullish on domestic themes where there is good predictability of earnings growth

3:54 PM

MARKET COMMENT Motilal Oswal, CMD, Motilal Oswal Financial Services

As expected, the RBI has left all key rates unchanged. Markets have corrected very well and now awaiting a bouce in the corporate earnings momentum. We think 10,000 level on Nifty 50 and 33,000 level on S&P BSE Sensex are good levels to invest in the equity markets from a long-term perspective. We will witness some turbulence, thanks to global trade fight, but subject to that volatility, these are good levels for retail investors to commit some money

Motilal Oswal

3:52 PM

MARKET COMMENT Prateek Agrawal, Business Head & CIO, ASK Investment Managers

Keeping interest rates unchanged has been as per expectations. This along with the leeway given to banks to absorb loan losses (done over last few day) has provided fuel to the stock market. RBI has been conscious of lower inflation risk and uncertain global trade environment

3:48 PM

Nifty Metal index ends 4.06% higher. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
JINDAL STEEL	235.55	219.60	15.95	7.26
HINDALCO INDS.	214.05	200.80	13.25	6.60
VEDANTA	289.10	274.30	14.80	5.40
JINDAL STAIN .HI	177.40	170.00	7.40	4.35
S A I L	75.25	72.30	2.95	4.08

3:43 PM

Nifty PSU Bank index surges 4.92%. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
CANARA BANK	288.15	262.50	25.65	9.77
BANK OF INDIA	112.05	103.45	8.60	8.31
BANK OF BARODA	148.70	139.90	8.80	6.29
SYNDICATE BANK	60.15	56.65	3.50	6.18
ALLAHABAD BANK	52.05	49.20	2.85	5.79

3:38 PM

Sectoral performers

3:35 PM

BSE Sensex: Top gainers and losers of the day

3:33 PM

Market at close

 

The S&P BSE Sensex ended at 33,597, up 578 points while the broader Nifty50 index settled at 10,325, up 197 points.

3:26 PM

MARKET COMMENT Garima Kapoor, Economist, Elara Capital on RBI Policy

In line with our expectation, MPC maintained status quo in today’s monetary policy. The recent softening in retail inflation that had firmed up during early months of winter, supported RBI’s decision to maintain status-quo. The recent moderation also supported a downward revision to RBI’s forecasts for FY19 CPI inflation. However, we expect headline CPI inflation to overshoot RBI’s forecast.

We expect retail inflation to remain in the range of 4.7%-5.6% in H1 FY19 (vs. RBI’s forecast of 4.7%-5.1%) and 3.7%-5.0% in H2 FY19 (vs. RBI’s forecast of 4.4%). We believe factors such as the expected trajectory of food prices (following new formula for MSP revision), trend in crude oil and other commodity prices and outlook for South West Monsoon will remain key in determining policy trajectory. We expect one rate hike of 25 bps towards second half of FY19

3:24 PM

RBI monetary policy review: Repo rate kept unchanged at 6%; highlights

In its first bi-monthly monetary policy review of 2018-19, the Reserve Bank of India’s (RBI’s) six-member monetary policy committee (MPC), headed by Governor Urjit Patel, on Thursday kept unchanged the key repo rate at 6 per cent and cash reserve ratio at 4 per cent. Also, the reverse repo rate was kept unchanged at 5.75 per cent. READ MORE

3:19 PM

InterGlobe Aviation, Avenue Supermarts, MRF hit new highs

Shares of Avenue Supermarts, which operates supermarkets under the brand name of D-Mart, InterGlobe Aviation, which operates no-frills carrier IndiGo and tyre major MRF have hit their respective new highs on the BSE after the benchmark indices gaining more than one percentage points on Thursday.

InterGlobe Aviation rallied 4.7% to Rs 1,455, extending its past three days 8% surged after the media report suggested that budget carrier will be able to bid solo for Air India’s 76% stake, while other domestic airlines will have to form a consortium to meet the net worth criteria stipulated by the government. READ MORE

3:15 PM

Nifty PSU Bank, Nifty Realty index up 3% as RBI keeps repo rate unchanged

Shares of interest-rate sensitive sectors such as auto, banking and realty were trading higher by up 4% on the National Stock Exchange (NSE) after the Reserve Bank of India (RBI) maintained status quo on the key short-term borrowing rate in its first bi-monthly monetary policy for the financial year 2018-19 (FY19) today.

Nifty PSU Bank, the public sector bank index and Nifty Realty, the real estate index, were up 3% each, while Nifty Auto, Nifty Bank and Nifty Private Sector Bank index were up nearly 2% as compared to 1.6% rise in the benchmark Nifty 50 index at 02:37 pm. READ MORE

3:02 PM

RBI Policy Decision

RBi's Kanungo: Will constitute a comittee to explore the possibility of launching digital currency by the central bank

2:56 PM

RBI Policy Decision

Viral Acharya: Liquidity surplus continue to decline

2:54 PM

RBI Policy Decision

2:53 PM

RBI Policy Decision

Urjit Patel: External demand may get affected if crude prices remain high

2:52 PM

COMMENT ON RBI POLICY Ramesh Nair, CEO and Country Head, JLL India

For the real estate sector, which has aligned to the government’s ambitions, was looking for some encouragement that would move the needle towards accelerated growth. The apex bank could have directed the lenders to keep the MCLR below 10% or put a cap on the same for home loans. Currently it is observed the MCLRs are higher by 10% - 12% in most leading retail lending banks. This could have brought down the effective lending rate for home loans.  Already by linking MCLR to lending rate changing the earlier base rate has made the cost of borrowing home loans higher in the short term.

 

Residential sales across key markets of India in 2016 – 17 where only marginally higher by approximately 5% than new launches in the same period. A rate REPO rate revision leading to lower home loan rates could have given sentimental boost to end user buyers.

2:45 PM

RBI Policy Decision

Crude oil price seen at $68 per barrel in FY19

2:45 PM

RBI Policy Decision

Monsoon expected to be "normal" in 2018

2:45 PM

RBI POLICY STATEMENT

GDP growth is projected to strengthen from 6.6 per cent in 2017-18 to 7.4 per cent in 2018-19 – in the range of 7.3-7.4 per cent in H1 and 7.3-7.6 per cent in H2 – with risks evenly balanced

(Image source: RBI policy statement)

2:43 PM

RBI Policy Decision

Report on digital currency from RBI by June-end

2:42 PM

RBI Policy Decision

RBI to fix big working capital loan minimum loan component

2:40 PM

RBI Policy Decision

MPC votes 5-1 in favour of status quo.  MPC's Patra voted for 25 bps hike

2:39 PM

Market Check

2:39 PM

RBI POLICY IMPACT Nifty Bank up 1.7% on RBI Policy decision

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)	VOLUME
ICICI BANK	276.80	268.65	8.15	3.03	20000841
BANK OF BARODA	143.95	139.90	4.05	2.89	12972409
ST BK OF INDIA	253.45	247.30	6.15	2.49	11928743
KOTAK MAH. BANK	1100.00	1078.30	21.70	2.01	1058624
IDFC BANK	49.10	48.25	0.85	1.76	4776024

2:38 PM

RBI Policy Decision

RBI sees real GDP growth at 7.4% in FY19 vs. 6.6% in FY18

2:37 PM

RBI Policy Statement

Projected CPI inflation for 2018-19 is revised to 4.7-5.1 per cent in H1:2018-19 and 4.4 per cent in H2, including the HRA impact for central government employees, with risks tilted to the upside (Chart 1). Excluding the impact of HRA revisions, CPI inflation is projected at 4.4-4.7 per cent in H1:2018-19 and 4.4 per cent in H2

2:36 PM

RBI Policy Decision

RBI keeps Reverse Repo Rate unchanged at 5.75% in the first policy of FY19

2:35 PM

RBI Policy Statement

For Q4, high frequency indicators point to a further strengthening of demand conditions. Private consumption seems to be improving on the back of strong growth in domestic air passenger traffic and foreign tourist arrivals, rising sales growth of passenger vehicles and a strong upturn in the production of consumer durables. The growth in sales of two-wheelers and tractors reflects buoyant rural consumption