Nifty holds 17,850; Paytm spurts over 15%; VIX slides 3.75%

The domestic equity benchmarks ended with strong gains on Wednesday, post RBI policy outcome. The Nifty settled above the 17,850 mark after hitting day's low of 17,744.15 in early trade. All the sectoral indices on the NSE ended in the green with metal, IT and healthcare shares gaining the most.

As per closing provisional data, the barometer index, the S&P BSE Sensex advanced 377.75 points or 0.63% to 60,663.79. The Nifty 50 index added 150.20 points or 0.85% to 17,871.70.

In the broader market, the S&P BSE Mid-Cap index rose 1% while the S&P BSE Small-Cap index gained 0.76%.

The market breadth was positive. On the BSE, 2,001 shares rose, and 1,490 shares fell. A total of 140 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, slipped 3.75% to 13.60.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) raised the key policy repo rate by 25 basis points and said it remained focused on the withdrawal of accomodation.

On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (8 February 2023) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50% with immediate effect.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.25% and the marginal standing facility (MSF) rate and the Bank Rate to 6.75%.

The MPC also decided by a majority of 4 out of 6 members 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 outlook for inflation is mixed. Inflation is projected to be at 6.5% in 2022-23, with Q4 at 5.7%. On the assumption of a normal monsoon, CPI inflation is projected at 5.3% for 2023-24, with Q1 at 5%, Q2 at 5.4%, Q3 at 5.4% and Q4 at 5.6%, and risks evenly balanced.

Real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%, and risks broadly balanced.

"The global economic outlook does not look as grim now as it did a few months ago. Growth prospects in major economies have improved, while inflation is on a descent, though it still remains well above the target in major economies," RBI Governor Shaktikanta Das said in his statement.

"Inflation is expected to average 5.6% in Q4:2023-24," he added.

Stocks in Spotlight:

Bharti Airtel declined 1.32%. The telecom major's consolidated net income surged 91.5% to Rs 1,588 crore on 19.9% increase in total revenues to Rs 35,804 crore in Q3 December 2022 over Q3 December 2021. On a consolidated basis, profit before tax jumped 67.6% year-on-year to Rs 4,359 crore in Q3 December 2022.

Hero MotoCorp fell 1.42%. The company reported net profit of Rs 711 crore in Q3 FY23, compared to net profit of Rs 686 crore posted in Q3 FY22. Revenue from operations rose 1.9% to Rs 8031 crore. The company declared interim dividend of Rs. 65 per equity share.

Adani Green Energy (AGEL) tumbled 4.87%. The renewable energy company's consolidated net profit zoomed 110.2% to Rs 103 crore in Q3 FY23 from Rs 49 crore reported in Q3 FY22. Revenue from operations stood at Rs 1,959 crore in the quarter ended 31 December 2022, registering a growth of 40.8% as against Rs 1,391 crore posted in Q3 FY22.

NHPC was down 0.50%. The power generation company's consolidated net profit declined 17.4% to Rs 671.67 crore in Q3 FY23 from Rs 813.21 crore recorded in Q3 FY22. Revenue from operations was at Rs 2,582.76 crore in the quarter ended 31 December 2022 as against Rs 2,156.72 crore posted in Q3 FY22, registering a growth of 19.8%.

Shree Cement fell 0.19% after the company's consolidated net profit tumbled 44% to Rs 276.77 crore in Q3 FY23 from as against Rs 491.99 crore posted in Q3 FY22. However, revenue from operations rose by 15% YoY to Rs 4,068.79 crore in the quarter ended 31 December 2022.

One 97 Communications (Paytm) surged 15.39% after the company's lending business witnesses a 327% year on year (YoY) growth in disbursements to Rs 3,928 ($480 million) in January 2023. The number of loans disbursed soared 103% (YoY) to 3.9 million as on 31 January 2023.

Deepak Nitrite gained 2.02% after the specialty chemical maker's consolidated net profit declined 13.8% to Rs 209.05 crore despite of a 15.6% rise in revenue from operations to Rs 1,991.06 crore in Q3 FY23 over Q3 FY22.

Navin Fluorine International shed 1.34%. The company's consolidated net profit surged 54.9% to Rs 106.56 crore in Q3 FY23 as against Rs 68.79 crore posted in Q3 FY22. Revenue from operations jumped 48.7% year on year to Rs 563.58 crore in the quarter ended 31 December 2022.

The Phoenix Mills slipped 4.40%. The company reported 78% jump in consolidated net profit to Rs 176.4 crore on a 66% increase in revenue from operations to Rs 683.8 crore in Q3 FY23 over Q3 FY22.

Global Markets:

European shares advanced while Asian stocks ended mixed on Wednesday, as Federal Reserve Chairman Jerome Powell overnight acknowledged that inflation is declining, a sign the central bank may soon pause its rate hikes.

US stocks advanced on Tuesday, but trade was choppy as investors digested comments from Federal Reserve Chair Jerome Powell about how long the central bank might need to tame inflation.

US inflation is starting to cool but the road ahead will likely be long and bumpy, Federal Reserve Chair Jerome Powell warned Tuesday, adding that stronger-than-expected economic data could bring more rate hikes.

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