Indices hover near day's high

The key indices were hovering near the day's high in mid-afternoon trade. At 14:21 IST, the barometer index, the S&P BSE Sensex, jumped 221.24 points or 0.45% to 49,490.56. The Nifty 50 index added 82.20 points or 0.57% to 14,566.95.

The broader market outperformed the benchmarks. The S&P BSE Mid-Cap index rose 0.67%. The S&P BSE Small-Cap index added 0.35%.

Buyers outpaced sellers. On the BSE, 1618 shares rose and 1377 shares fell. A total of 181 shares were unchanged.

Economy:

RBI Governor Shaktikanta Das, in his foreword for the financial stability report released on Monday, said: "Stretched valuations of financial assets pose risks to financial stability. Banks and financial intermediaries need to be cognizant of these risks and spillovers in an interconnected financial system."

The financial stability report has also warned that banks' bad loans may double by September 2021. The RBI sees gross bad loans account for 13.5% of total loans by September even in a base case scenario.

The RBI expects banks' capital ratios will erode to 14% in September from 15.6% in September 2020, the report showed. This may worsen to 12.5% in a very severe stress scenario, under which nine banks may fall short of meeting the minimum capital requirement of 9%.

Buzzing Index:

The Nifty FMCG index shed 0.45% to 34,525.65. The index rose 1.91% in the past two sessions.

Varun Beverages (down 2.73%), Hindustan Unilever (down 2.06%), Jubilant Foodworks (down 1.94%), Colgate-Palmolive India (down 1.76%), Nestle India (down 1.73%), Marico (down 1.14%) and Dabur India (down 1%) edged lower.

Emami (up 4.50%), ITC (up 1.83%), United Breweries (up 1.70%), United Spirits (up 1.30%) and Britannia Industries (up 0.73%) bucked the trend.

Stocks in Spotlight:

Steel Strips Wheels (SSWL) rose 2.92% to Rs 666.95 after the company's net profit soared 4.57 times to Rs 28.75 crore in Q3 FY21 from Rs 6.29 crore in Q3 FY20. Revenue from operations during the quarter increased by 52.66% year-on-year (YoY) to Rs 524.54 crore in Q3 FY21.

Mahindra Lifespace Developers rose 0.83% to Rs 390 after the company signed a Memorandum of Understanding (MoU) with State Bank of India. As part of the agreement, which includes various co-promotional activities and outreach initiatives, customers and employees of SBI and Mahindra Lifespaces will be able to avail the benefits of faster home loan processing and approvals, and special discounts and schemes.

RITES rose 1.54% to Rs 273.15 after the company secured a work order of Rs 67.79 crore from National High Speed Rail Corporation (NHSRCL). The order is for establishment and maintenance of Continuously Operating Reference Stations (CORS) along 487 km long Mumbai-Ahmedabad High Speed Rail Corridor. The contract is for a period of six years.

Numbers To Track:

In the foreign exchange market, the partially convertible rupee rose to 73.3475 compared with its previous closing of 73.40225.

The yield on 10-year benchmark federal paper rose to 5.927% as compared to its previous close of 5.924%.

MCX Gold futures for 5 February 2021 settlement added 0.12% to Rs 49,400.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, shed 0.05% to 90.42.

In the commodities market, Brent crude for March 2021 settlement added 28 cents to $55.94 a barrel. The contract shed 0.60% or 33 cents to settle at $55.66 in the previous trading session.

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