Nifty above 17,100 level, metal stocks advance

The headline equity indices continued to march higher and traded near the day's high in the mid- afternoon trade. Bargain hunting emerged after the Reserve Bank of India (RBI) today raised benchmark repo rate by 50 basis points, along expected lines. The Nifty crossed the 17,100 level, reversing from the day's low of 16,747.70 in the early trade. All the sectoral indices on the NSE were in the green with bank, financial services and metal stocks gaining the most

At 14:30 IST, the barometer index, the S&P BSE Sensex, surged 1,239.02 points or 2.20% at 57,648.98. The Nifty 50 index gained 344.40 points or 2.05% at 17,162.50.

In the broader market, the S&P BSE Mid-Cap index rose 1.31% while the S&P BSE Small-Cap index gained 1.47%.

The market breadth was strong. On the BSE, 2,311 shares rose and 1,062 shares fell. A total of 123 shares were unchanged.

Economy:

The Monetary Policy Committee (MPC) at its meeting today (30 September 2022) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.90% with immediate effect. The decision was on the expected lines.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.65% and the marginal standing facility (MSF) rate and the Bank Rate to 6.15%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The MPC projected that while inflation will average 6.7% in 2022-23, it will head lower in the next financial year.

Inflation is projected at 6.7% in 2022-23, with Q2 at 7.1%; Q3 at 6.5%; and Q4 at 5.8%, and risks are evenly balanced. CPI inflation for Q1:2023-24 is projected at 5%.

FY23 real GDP growth is seen at 7% from 7.2% earlier. Real GDP growth for Q2 2022-23 is projected at 6.3%; Q3 at 4.6%; and Q4 at 4.6%, and risks broadly balanced. For Q1:2023-24, it is projected at 7.2%.

The next meeting of the MPC is scheduled during 5-7 December 2022.

Numbers to Track:

The yield on India's 10-year benchmark federal paper declined to 7.338 as compared with 7.340 at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 81.21, compared with its close of 81.7350 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement rose 0.83% to Rs 50,410.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.53% to 111.65.

The United States 10-year bond yield declined 0.88% to 3.714.

In the commodities market, Brent crude for November 2022 settlement gained $1.03 or 1.16% at $89.52 a barrel.

Buzzing Index:

The Nifty Metal index gained 2.86% to 5,807.15. The index advanced 3.37% in two trading sessions.

Hindalco Industries (up 5.98%), National Aluminium Company (up 5.02%), Jindal Stainless (up 4.92%), Hindustan Copper (up 3.93%), Vedanta (up 3.87%), Steel Authority of India (up 3.65%), APL Apollo Tubes (up 3.36%), Tata Steel (up 3.25%), Jindal Steel & Power (up 2.88%) and JSW Steel (up 2.21%) jumped.

On the other hand, Welspun Corp (down 0.93%), Ratnamani Metals & Tubes (down 0.67%) and Hindustan Zinc (down 0.11%) declined.

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