Nifty below 15,700; Bharat Forge up 5% after Q4 results

The benchmark indices came off the day's low in early afternoon trade trade. At 12:23 IST, the barometer index, the S&P BSE Sensex, was down 98.26 points or 0.19% to 52,134.17. The Nifty 50 index lost 19 points or 0.12% to 15,670.55. The Nifty hit a record high of 15,733.60 in morning trade.

In broader market, the S&P BSE Mid-Cap index gained 0.37% while the S&P BSE Small-Cap index rose 0.65%.

The market breadth was positive. On the BSE, 1755 shares rose and 1241 shares fell. A total of 153 shares were unchanged.

RBI Policy 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.

RBI's MPC began its bi-monthly monetary policy deliberations on Wednesday, 2 June. On the basis of an assessment of the current and evolving macroeconomic situation, the MPC at its meeting today (June 4, 2021) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4%. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35% and the marginal standing facility (MSF) rate and the Bank Rate at 4.25%.

The MPC also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

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.

CPI inflation is projected at 5.1% during 2021-22: 5.2% in Q1; 5.4% in Q2; 4.7% in Q3; and 5.3% in Q4:2021-22; with risks broadly balanced. Real GDP growth is projected at 9.5% in 2021-22, consisting of 18.5% in Q1; 7.9% in Q2; 7.2% in Q3; and 6.6% in Q4:2021-22.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 2.11% to 16.08. The Nifty 24 June 2021 futures were trading at 15,693.50, at a premium of 22.15 points as compared with the spot at 15,670.55.

The Nifty option chain for 24 June 2021 expiry showed maximum Call OI of 25.2 lakh contracts at the 16,000 strike price. Maximum Put OI of 31.4 lakh contracts was seen at 15,000 strike price.

Buzzing Index:

The Nifty Auto index rose 0.37 % to 10,687. The index had ended flat yesterday.

Hero MotoCorp (up 0.82%), Mahindra & Mahindra (up 0.48%), Tata Motors (up 0.29%), Ashok Leyland (up 0.24%) and Maruti Suzuki (up 0.11%) advanced.

Bajaj Auto (down 0.53%), TVS Motor Company (down 0.34%) and Eicher Motors (down 0.40%) declined.

Earnings Impact:

Bharat Forge jumped 5% to Rs 730.65 after the company posted a standalone net profit of Rs 205.5 crore in Q4 FY21 as compared to a net loss of Rs 73.2 crore registered in Q4 FY20. Total revenue increased by 48.3% to Rs 1,307.4 crore in Q4 FY21 from Rs 881.2 crore posted in Q4 FY20. Surge in revenue was on the back of a strong 42.9% growth in export revenues and 9.6% growth in domestic revenues.

Quess Corp fell 1.65% to Rs 702.05. On a consolidated basis, the company posted a net loss of Rs 58 crore in Q4 FY21 as compared to a net loss of Rs 630 crore registered in Q4 FY20. net sales rose 0.3% YoY to Rs 3,004 crore in Q4 FY21. EBITDA margin slipped to 1.26% in Q4 FY21 from 5.37% in Q4 FY20.

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