Indices reverse gains; IT stocks in demand

The key equity indices reversed gains and slipped into the negative terrain in mid-morning trade. The Nifty held above the 15,700 mark. The RBI maintained status quo with respect to key policy rates in its latest monetary policy announced today. IT shares rose for second day.

At 11:24 IST, the barometer index, the S&P BSE Sensex, was down 141.16 points or 0.27% to 52,091.27. The Nifty 50 index lost 36.65 points or 0.23% to 15,653.70. The Nifty hit a record high of 15,733.60 in morning trade.

In broader market, the S&P BSE Mid-Cap index gained 0.06% while the S&P BSE Small-Cap index rose 0.42%.

The market breadth was positive. On the BSE, 1635 shares rose and 1262 shares fell. A total of 149 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 172,026,069 with 3,698,663 global deaths.

India reported 1,635,993 active cases of COVID-19 infection and 340,702 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

RBI MPC Meet Outcome:

The Reserve Bank of India (RBI) kept the policy repo rate unchanged at 4% while maintaining its accommodative stance after the conclusion of the Monetary Policy Committee (MPC) meeting today, 4 June 2021.

The RBI's MPC began its bi-monthly monetary policy deliberations on Wednesday, 2 June. Following the meet, RBI on Friday (4 June) kept the benchmark interest rate unchanged amid COVID-19 uncertainty. Repo rate (lending rate) will continue at 4% and reverse repo rate (RBI's borrowing rate) at 3.35%. The central bank has maintained an accommodative stance.

MPC expects CPI inflation to be at 5.1% in 2021-22; 5.2% in Q1, 5.4% in Q2, 4.7% in Q3 and 5.3% in Q4. GDP growth is projected at 9.5% in Financial Year 2021-22.

Buzzing Index:

The Nifty IT index rose 0.39% to 27,094.35, extending gains for second day. The index has added 0.57% in two sessions.

Coforge (up 1.11%), Larsen & Toubro Infotech (up 0.79%), Wipro (up 0.73%), Mphasis (up 0.48%), Tech Mahindra (up 0.68%), Oracle (up 0.41%), Infosys (up 0.30%), MindTree (up 0.16%) and TCS (up 0.15%) advanced.

Earnings Impact:

Gujarat State Petronet (GSPL) added 3.67% to Rs 296.30 after the company's consolidated net profit jumped 16% to Rs 577.51 crore on 19.5% surge in net sales to Rs 3766.95 crore in Q4 March 2021 over Q4 March 2020. Volumes declined 7.99% to 33.84 million metric standard cubic meter per day (MMSCMD) in Q4 FY21 over 36.78 MMSCMD in Q4 FY20.

Cupid tumbled 6.75% to Rs 231.45 after the company's standalone net profit dropped 38% to Rs 6.47 crore on a 4.1% decline in net sales to Rs 39.60 crore in Q4 March 2021 over Q4 March 2020.

Global Markets:

Most Asian stocks were trading lower on Friday after U.S. equities sagged amid robust economic data that stoked concerns about a pullback in central bank stimulus.

US stocks ended lower on Thursday, though they came off lows on signs President Joe Biden may be willing to compromise on corporate taxes. Strong U.S. jobs data and record service-sector growth underscored the recovery from the pandemic.

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