Benchmarks off day's low; RBI keeps repo rate unchanged

Benchmarks came off the day's low in morning trade after the Reserve Bank of India (RBI) left key policy rates unchanged. The Nifty reclaimed 11,850 level and traded higher. At 10:35 IST, the barometer index, the S&P BSE Sensex, was up 166.75 points or 0.41% at 40,349.39. The Nifty 50 index was up 28.25 points or 0.24% at 11,862.85.

In the broader market, the S&P BSE Mid-Cap index was up 0.09 while the S&P BSE Small-Cap index was up 0.11%. Both these indices underperformed the Sensex.

The market breadth was almost even. On the BSE, 1073 shares rose and 1010 shares fell. A total of 105 shares were unchanged.

COVID-19 Update:

India reported 8,93,592 active cases of COVID-19 infection and 106,490 deaths while 59,06,069 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 36,444,284 with 1,060,929 deaths.

RBI Policy Outcome:

RBI's Monetary Policy Committee (MPC) decided to hold key policy rates at existing levels. Three new external members in the panel voted in today's decision. The repo rate, the key interest rate at which it lends short-term funds to commercial lenders, was retained at 4%. Consequently, the reverse repo rate, at which the RBI borrows from lenders, stood at 3.35%. The central bank retained its "accommodative" stance on monetary policy to support the coronavirus-hit economy.

India's GDP growth will contract by 9.5% in fiscal 2021 due to disruptions caused by the Covid-19 pandemic that has hit economic activities, according to a statement by Reserve Bank of India (RBI) governor Shaktikanta Das. However, the GDP growth rate may break out of contraction and turn positive during January-March due to recovery seen across sectors, he added.

Buzzing Index:

The Nifty Bank index rose 0.81% to 23,379.65. The index has added 9.19% in six days.

Among the PSU banks, Indian Overseas Bank (up 2.17%), Punjab National Bank (up 0.72%), Union Bank of India (up 0.41%), CBI (up 0.40%), SBI (up 0.39%), Jammu and Kashmir Bank (up 0.33%), Bank of India (up 0.12%) and Canara Bank (up 0.06%) advanced.

Among the private sector banks, City Union Bank (up 1.69%), HDFC Bank (up 1.12%), Bandhan Bank (up 0.93%), ICICI Bank (up 0.86%), IndusInd Bank (up 0.45%) and Axis Bank (up 0.14%) edged higher.

Lakshmi Vilas Bank surged 12.08% to Rs 19.95 after the bank said it has received an indicative non-binding offer from Clix Group. "Further to the process of considering and evaluating the proposed amalgamation with M/s. Clix Capital Services Private Limited ("Clix Capital"), M/s. Clix Finance India Private Limited ("Clix Finance") and M/s. Clix Housing Finance Private Limited ("Clix Housing") (collectively, the "Clix Group"), we are glad to inform that, the Bank has received an indicative non-binding offer from Clix Group. The Bank will continue to share information on material developments as and when they materialize," the lender said in a communiquto the BSE.

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