The Nifty50 index settled above the 11,900-mark at 11,914, up 80 points, or 0.67 per cent. (Photo: Kamlesh Pednekar)
Continuing their gaining streak for the seventh session in a row, the benchmark indices ended nearly a per cent higher on Friday after the monetary policy committee (MPC) of the RBI left the repo rate unchanged at 4 per cent but announced a slew of liquidity measures to support the economy.
Further, RBI Governor Shaktikanta Das said the stance of the policy would remain “accommodative,” for “as long as necessary – at least during the current financial year and into the next year – to revive growth. READ MORE
The S&P BSE Sensex today ended 327 points, or 0.81 per cent higher at 40,509 levels while the Nifty50 index settled above the 11,900-mark at 11,914, up 80 points, or 0.67 per cent. On a weekly basis, Sensex rallied 4.6 per cent and Nifty gained 4.3 per cent.
ICICI Bank and Axis Bank (both up 3.64 per cent) were the top Sensex gainers, followed by SBI, and HDFC Bank (both up 3.5 per cent).
The Nifty sectoral indices were mixed. While Nifty Bank gained nearly 3 per cent to 23,847 levels, Nifty Pharma ended as the biggest loser - down over 1.3 per cent.
In the broader market, the S&P BSE MidCap index slipped 0.42 per cent while the S&P BSE SmallCap ended 0.29 per cent lower at 14,966 levels.
World shares pushed on from one-month highs, with Asian stocks closing in on two-and-a-half-year highs, as expectations grew of a Democratic victory in US elections next month, reviving hopes for more US stimulus.
The pan-European STOXX 600 index rose 0.3 per cent, set for its second straight week of gains. Wall Street futures were up 0.4 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent, inching closer to its August 31 peak, which was its highest level since March 2018. China's CSI300 index gained 2 per cent after the Golden Week holidays.
In commodities, oil prices fell, erasing earlier gains but still leaving both benchmarks on track for their biggest weekly gains since early June on the back of supply cuts caused by a storm in the Gulf of Mexico and a strike of offshore workers in Norway.
MARKET AT CLOSE | Gainers and losers on the S&P BSE Sensex
The S&P BSE Sensex soared 327 points, or 0.81 per cent to settle at 40,509 while NSE's Nifty ended at 11,914, up 80 points, or 0.67 per cent.
BSE Midcap index trades flat
Majesco hits new high, trades above proposed buyback price of Rs 845
Shares of Majesco hit a fresh record high of Rs 889, up 5 per cent on the BSE in intra-day trade on Friday. The shares were trading above the proposed buyback price of Rs 845 per share. The stock surpassed its previous high of Rs 884.85, touched on Wednesday, October 7. At 02:34 pm, the stock was trading 4 per cent higher at Rs 880, against a 0.75 per cent rise in the S&P BSE Sensex. READ MORE
Australia's largest investment funds plan entry into India, meet NIIF
Australia’s largest investment funds, collectively managing assets of more than A$736 billion (Rs 38 trillion) on Thursday met National Investment and Infrastructure Fund (NIIF) on Thursday to explore investment opportunities in India. READ MORE
Heatmap: S&P BSE Sensex gainers and losers at this hour
As per the latest data available at exchanges, total 127.86 crores shares have been offered at different prices, with maximum bids happening in between Rs 145 - Rs 160 as compared to floor price of Rs 87.25. We expect that the discovered price may end up being much higher than the floor price and there could be a possibility of the promoters coming out with a counter offer. Currently the promoters own 50.14% of the shares in the company and will need to increase their holdings to at least 90% for successful delisting. The Reverse Book building process for price discovery is currently under progress and today is the last day for bidding. We believe that It would be prudent for retail shareholders to participate in the Reverse book building process.
(Source: Angel Broking)
COMMENT:: Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life
“As expected, the RBI kept policy rates unchanged, but said that it will maintain accommodative stance in current and next fiscal year—indicating a dovish undertone. The central bank announced various liquidity measures and other measures to help improve credit growth esp. for certain segments. The bond markets have therefore reacted positively with yields falling post the policy announcement, and for the equity markets--sectors like banking, NBFCs (esp home loan providers) have reacted most positively. Overall the monetary policy has been very supportive of growth with ample liquidity measures. We also believe that the worst is behind and that the economy is on the recovery path.”
UPDATE :: Nifty Bank at day's high
RBI announces a mix of unconventional steps to check borrowing costs
While the Monetary Policy Committee retained the repurchase rate at 4% and kept its accommodative stance, Reserve Bank of India Governor Shaktikanta Das used a generous mix of tools to assure the bond market that the central bank will keep yields under control despite the government’s record debt program, and also help banks lower lending rates. READ MORE
Rupee ends higher at 73.13 per US dollar vs Thursday's close of 73.24/$
Larsen & Toubro up 4% after sinking 11% in 7 wks; Jefferies maintains 'Buy'
Analysts at Jefferies said an early recovery in macro investment cycle should see a sharp pick-up in the company's order flow and valuations. The Middle East (ME) margin contraction factored-in does not come through in case of better margin order flow. READ MORE
Top losers on the BSE at this hour
COMMENT:: Navneet Munot, CIO, SBI Mutual Fund
"The RBI left the rates unchanged and yet delivered an extremely dovish monetary policy by taking measures to keep the risk free rate low and providing on-tap liquidity. Looking through the transient inflationary hump and supporting growth was a clear message sent out in today’s policy. Overall, the forward guidance was extremely favourable as there was an explicit message to keep policy accommodative at least until FY 2022."
NEWS ALERT :: HAL employee arrested for supplying fighter aircraft info to Pakistan's ISI: Maharashtra police
COMMENT :: Sunil Kumar Sinha, Principal Economist, India Ratings and Research
As expected, RBI’s monetary policy committee kept the policy rate unchanged at 4% and decided to continue with the accommodative stance in its October 2020 review. The articulation to continue with the accommodative stance in the next financial year clearly indicates that despite uneasiness due to the elevated retail inflation, it is in no hurry to reverse rate cycle. On the contrary, it suggests that RBI is willing to wait longer for retail inflation to correct and if incoming data is going to be favourable then another round of rate cut is possible. RBI’s optimism on the inflation front is based on – (i) easing of supply side disruption, (ii) weak demand conditions and (iii) bumper Kharif harvest as it expects the retail inflation to decline to 4.3% in 1QFY22. India Ratings and Research believes, in the interim, a long pause on the policy rate looks like the most likely outcome since the impact of past rate cuts is still playing out.
On the liquidity front, RBI stated that it will maintain comfortable liquidity conditions and will continue to conduct market operations in the form of outright and special open market operations. Inclusion of SDLs as a special case for doing OMOs during the current financial year is welcome move. This will not only reduce SDL spread bur help states to raise resources at more competitive/reduced rate to finance their fiscal deceit.
RBI keeps policy rates unchanged, stance accommodative: What experts think
The Reserve Bank of India Monetary Policy Committee on Friday voted to keep key rates unchanged and maintained an accommodative stance, announced Governor Shaktikanta Das. With this repo rate stays at 4.0 per cent while reverse repo rate stays at 3.35 per cent The development comes amid signs of recovery in the economy badly battered by the coronavirus pandemic. READ MORE
COMMENT:: Jimeet Modi, Founder & CEO, Samco Group
The RBI MPC has continued its accommodative stance and maintained the status quo on repo rates. The outcome was as per expectations but it was the good commentary on GDP outlook and the liquidity measures announced that cheered D-Street. Real estate, the largest share in terms of gross domestic wealth is expected to benefit the most as the RBI has allowed flexibility in home loans which will give more freedom to HFCs to lend aggressively which will also mean reduced rates for home buyers as the competition to lend intensifies. The on-tap TLTRO will also nudge credit pickup as raising money will become easier for smaller players. If that wasn’t all, digitisation has also been given a boost; RBI has announced around-the-clock availability of RTGS from December 2020 which will reduce costs and encourage digital transactions. All these proactive measures undertaken by the Indian central bank to revive growth and stimulate the economy will go down well with capital markets.
Sector Watch :: Pharma stocks decline in trade
European indices trade higher in early deals
COMMENT :: Bekxy Kuriakose, Head – Fixed Income, Principal Asset Management on RBI policy
The rate cutting spree of last five months had lulled most market participants into thinking that perhaps RBI will continue to push the pedal. However by a unanimous vote RBI prudently decided to keep rates unchanged with accommodative stance. No doubt the recent spikes in CPI inflation (April to June) due to cost push pressures was the most important factor to consider. RBI expects that supply chain disruptions will likely remain elevated in the next few months to come.
Relief in the form of developmental measures is being given to MSME borrowers with restructuring being allowed for accounts which were standard as on 1st March 2020. Relief is also being given for households and individuals who wish to borrow against gold with permissible LTV being hiked to 90% from 75% earlier.
Outlook: We think the possibility of further rate cuts is not ruled out but for that to happen CPI inflation needs to show meaningful downward trend closer to 4% which may happen towards latter part of FY 2021. Meanwhile RBI will continue with other measures to aid credit flow to needy sectors and ensure monetary transmission. While a calendar or quantum of further OMOs was not mentioned we expect OMO purchases to continue while being episodic in nature. The disappointment of no rate cut may lead to a selloff of 5 to 10 bps in the near term. We advise investors to maintain a balanced asset allocation within debt funds with short term debt funds being the preferred category.
Gold ETFs continues to see inflows for sixth straight month in September
The Gold ETF category continued to receive net inflows for the sixth straight month in September. The category received inflows of Rs 597 crore in September, taking its year-to-date total to Rs 5,957 crore, data from Association of Mutual Funds in India show. Gold prices came-off its all-time high of about Rs 56,200 it hit in August, after witnessing almost an uninterrupted rally this year. READ MORE
COMMENT :: Anagha Deodhar – Economist, ICICI Securities on the RBI Monetary policy
The unanimous vote to keep repo rate unchanged is in line with our expectation, given high inflation and expected inflation trajectory. Despite no rate cut, the policy is extremely dovish due to the liquidity and regulatory measures announced today. More specifically, we believe ‘on tap TLTRO’, OMOs in state development loans, extension of HTM limits till Mar ‘22, and rationalisation of risk weights on housing loans are very important measures and are likely to ease financial conditions further and provide support to key sectors of the economy.
The committee also gave forecasts on growth and inflation.
After the sharp 24% contraction in Q1FY21, the MPC expects growth to come in at -9.8% in Q2, -5.6% in Q3 and 0.5% in Q4. We agree with the committee’s assessment that manufacturing sector is likely to drive the recovery while relatively more contact-intensive services sector could take a while to recovery.
On the inflation front, the governor noted that the recent pick-up in inflation is due to supply disruption and higher markups during lockdown. Going forward, as supply chains are restored inflation could ease to 4.5-5.4% in H2FY21.
Views on RBI policy by Abheek Barua, Chief Economist, HDFC Bank
Today’s monetary policy was as aggressively accommodative as possible without cutting the policy rate. The decision to remain accommodative for an extended period and to look through “transient humps” in inflation reveals an appreciation for the basic principles of economics –that a GDP contraction of 9.5 per cent is simply not compatible with demand side inflation pressures. If inflation has persisted over the RBI’s target limit, it has been driven by persistent supply side problems. Persistence itself cannot transform a supply driven problem to a demand side concern amenable to monetary policy driven containment. Given the stance, there is a significant probability of a rate cut in February, if not in December itself as inflation, as we expect, moderates.
Havells India gains 3% on hopes of improvement in operational performance
In the past five days, the stock has rallied 7 per cent, after the company said it has decided to shift its switchgears production capacity from Guwahati location to its existing facilities at Baddi location in order to have benefits of synergy. Last month, on September 24, a leading fast‐moving electrical goods (FMEG) company -- Lloyd -- announced its entry into the refrigerator segment under its consumer durable brand. The refrigerators will be available in capacities ranging from 190 litres to 587 litres, and at an introductory offer price range from Rs 10,000 to Rs 84,990, it said. READ MORE
RBI to conduct on-tap TLTRO worth Rs 1 trillion to nudge credit growth
The liquidity availed under the scheme can also be used to extend bank loans and advances to these sectors. The TLTRO will be for tenors of up to three years and for a total amount of up to Rs 1 trillion at a floating rate linked to the policy repo rate for banks. READ MORE
Top gainers on the BSE at this hour
Views on RBI policy by Naveen Kulkarni, CIO, Axis Securities
"The RBI October 2020 policy, while being on expected lines of pause in rate cuts and maintaining an accommodative stance, has addressed the continuation of liquidity support for the sector. On-tap TLTROs and OMO purchases lowering bond yields will ease liquidity. Aligning risk-weights for individual housing loans to Loan to Value (LTVs) will help home lenders, in turn, also driving demand for the stressed real-estate sector. Macro outlook for FY21 looks muted with a decline forecast in GDP by 9.5%, but buoyancy in rural demand and sector-specific improvement could lead to a gradual recovery."
Views on RBI policy by Anuj Puri, Chairman – ANAROCK Property Consultants
With real estate demand gradually seeing some green shoots of revival, especially in the wake of reduced stamp duty charges (in Maharashtra) and developers discounts and freebies, reduced repo rates would have given an added boost just before the upcoming festive season. But with consumer inflation still trending at the upper end of the apex bank’s band, and the policy repo rate also being substantially reduced by 140 basis points in 2020, today’s move was expected.
On a positive note, RBI’s move to rationalise risk weightage on home loans and linking housing loans risks only to loan-to-value is a welcome move. This announcement thus will definitely encourage banks to lend more to individual homebuyers without feeling the stress on their balance sheets.
Shares of banks and non-bank finance companies, including housing finance, gained ground on Friday after the after the Reserve Bank of India (RBI) announced liquidity boositing measures while keeping the key rates unchanged. LIC Housing Finance, Mahindra & Mahindra Financial Services, Indiabulls Housing Finance, PNB Housing Finance, Housing Development Finance Corporation (HDFC) and Repo Home Finance were up 4 per cent to 9 per cent in intra-day trade today. READ MORE
ASSOCHAM'S view on RBI policy announcement
The Reserve Bank of India's Governor Shaktikanta Das announcement of keeping the repo rates unchanged while forecasting a 9.5 per cent contraction in FY21 was on expected lines stated ASSOCHAM president, Dr. Niranjan Hiranandani.
The RBI’s decision to keep key rates unchanged was also much anticipated. “Further reduction in key interest rates was not a possibility at this juncture. The RBI’s decision to extend the scheme for co-lending to all NBFCs, HFC in respect of all eligible priority sector loans will allow greater operational flexibility to the lending institutions and is much welcomed,” he said.
MARKET UPDATE:: Broader indices underperform benchmarks
InterGlobe Aviation advances 5%, hits over seven-month high
Shares of InterGlobe Aviation (IndiGo) moved higher by 5 per cent, hitting an over seven-month high of Rs 1,393 on the BSE in intra-day trade on Friday. The stock of the airline company was trading at its highest level since February 26, 2020. In the medium-to-long term, once the Covid-related crisis is over, the demand outlook for aviation remains very strong in India, largely driven by under-penetration, rise in the working population, and expansion of the middle class, the company said in its annual report. READ MORE
Quote on RBI policy by Abhimanyu Sofat, Head of Research, IIFL Securities
“Despite not cutting benchmark interest rate, RBI has announced a significantly dovish monetary policy will slew of measures. Doubling of the size of open market operations to Rs 20,000 crore, RBI participation in state development loans, allowing co-origination of loans by HFCs are combined big-ticket announcements for both bond market and financial sector stocks. Housing finance companies, small NBFCs are likely to outperform as a result of these announcements. RBI is expecting a significant fall in inflation in H2 which has been higher due to supply chain challenges to justify its dovish stance. Extension of HTM limits by an additional one year, on tap TLTRO, are going to provide significant relief to the bond market. Investors can increase their allocation to the BFSI space as we see more availability of money at a lower cost to help in a strong rebound in the sector.”
Quote on RBI policy by Dr. Joseph Thomas, Head of Research - Emkay Wealth
“The RBI policy is on expected lines, as it keeps the base rate unchanged and the policy stance accommodative. The probability of RBI cutting rates in the near future remains quite low in view of the higher inflationary pressures. RBI views the current spike in prices a "transient hump", as price level may moderate in Q4. But, with a huge government borrowing program ahead, the RBI will continue with the liquidity support. It is actually the liquidity that has been helping both the debt and the equity markets. There is always a constituency of market participants who want rate cuts. They will be certainly disappointed. The reports which had come up last June that the rate cut cycle is coming to an end may gain more prominence now. In our view, it is not the rate cuts but the liquidity provision that matters today, when the market rates on short term bank and corporate papers have touched low single digits. The positioning of portfolios should continue on the same lines with an accent on the short and mid sector. The expected GDP contraction for FY 21 is placed at 9.50%, which is also quite close to most of the market estimates, with the Q4 number must likely turning positive number.”
Quote on RBI policy by Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research
"In the context of increased concerns on higher bond yields and higher government borrowings, RBI has given out a strong message that it will manage yields in an aggressive manner through larger OMOs which will also cover SDLs. This along with an expectation of moderation in inflation over the next few months is expected to keep 10 yr. gsec yields at sub 6% levels and also facilitates higher borrowings by the states in the near term. Further, significant steps have been taken to ensure liquidity in the financial markets and also the availability of debt to specific sectors with the “on tap TLTRO” of another Rs 1 Lakh Cr up to March 2021. Additionally, several regulatory measures such as tweaks on risk weights for home loans with higher equity contribution, an increase of exposure limits to individual retail and small business loans, and extension of co-origination models to cover all NBFCs and HFCs will help to incentivise higher lending to retail and SME sectors, thereby pushing the currently low credit growth.”
Views on RBI policy by Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
"Though the policy rate remains unchanged, this is a very dovish policy announcement. The rationalisation of risk weightage of home finance companies is an innovative initiative that will bring home loan rates down. This will be a boost to the real estate sector & housing companies. Proposed OMOs for State Development Loans will boost liquidity for SDLs. This will be beneficial for funds starved states. The new MPC's first policy announcement is a fine example of being dovish without cutting rates. The positive response of the bond market with a sharp cut in yields is a reflection of the success of the policy."
MADAN SABNAVIS | RBI's focus has been on liquidity provision in the right areas
Three important messages given by the Governor are positive for the market. The first is the assurance that the government borrowing programmes will be managed to ensure no liquidity issues arise. Second, open market operations (OMOs) are to be announced for state development loans (SDLs), which will provide more liquidity to the market and help to temper the yields that have increased sharply over G-Secs. Third, having on-tap TLTROs for Rs 1 trillion would be largely beneficial for various sectors. READ MORE
Nifty Bank up over 1.5% post RBI policy announcement
MARKET UPDATE:: Sensex at day's high
Policy Impact :: LIC Housing Finance soars 8%
NBFCs gain in trade as RBI announces measures for housing loans
Sectoral trends :: Nifty Bank up 1%
NEWS ALERT :: HTM limit will remain 22% for banks till March 2022
NEWS ALERT :: RBI rationalises risk-weights, links them to LTV for new housing loans
>> To be done till March 31, 2022
NEWS ALERT :: RBI announces on-tap TLTRO
>> Will conduct TLTRO with tenors of 3 yrs
>> The amount for TLTRO is Rs 1 trillion
>> This will be floating interest rate (linked to policy rate)
>> Liquidity so raised will have to be invested in corporate bonds
NEWS ALERT :: RBI enhances special OMO auction limit to Rs 20,000 cr
>> Special OMO auctions to take place next week
Key sectoral indices turn negative ahead of the RBI policy announcement
Lakshmi Vilas Bank gains 16% on receiving non-binding offer from Clix Group
Shares of Lakshmi Vilas Bank (LVB) surged 16 per cent to Rs 20.60 on the BSE on Friday after the private sector lender said that it had received an indicative non-binding offer from the Clix Group. The offer suggests the private equity firm comprising Clix Capital Services Private Limited, Clix Finance India Private Limited and Clix Housing Finance Private Limited would be amalgamated with LVB. READ MORE
Brokerages expect V-shaped recovery in corporate earnings in second qtr
Led by a big positive swing in Bharti Airtel’s net profits, brokerages expect V-shaped recovery in the combined earnings of Nifty50 companies in the July-September quarter (second quarter, or Q2) of 2020-21 (FY21). READ MORE
Vedanta snaps losing streak, trades 2% higher
>> Vedanta's delisting offer will close today. According to media reports, the company's promoters need around 60 crore more shares to be tendered for the delisting to succeed.
Solar Industries leaps 7% on new order win
>> Solar Industries: The company has received orders from Singareni Collieries Company Limited (SCCL) for supply of Explosives and Initiating Systems worth Rs 447 crore, to be delivered over a period of two years.
Adani Enterprises trades in the green
>> Adani Enterprises on Thursday said it has raised Rs 125 crore through allotment of non-convertible debentures on a private placement basis.
GOCL gains around 4.5%
>> In a regulatory filing, the company informed that IDL Explosives Limited (IDLEL), a wholly-owned subsidiary of the Company, has bagged an order from Singareni Collieries Company, worth Rs 186.78 crore
Lakshmi Vilas Bank zooms over 13%
>> Chennai-headquartered Lakshmi Vilas Bank (LVB), where shareholders had recently voted against the appointment of seven directors including the chief executive and managing director, said on Thursday that it had received an indicative non-binding offer from the Clix Group.
Infosys trades higher on hiring plans
>> Infosys co-founder and Non-Executive Chairman Nandan Nilekani on Thursday said the company is looking at doubling its headcount in Canada to over 4,000 employees in the next 12-18 months. The company is scheduled to release its September quarter numbers on October 14.
Tata Consultancy Services dips on profit booking
Sectoral trends :: Metals rally on positive global cues
Sensex Heatmap at Open
Opening Bell :: Indices open flat ahead of RBI policy
Here's a Bull Spread Strategy on Lupin
Bull Spread strategy on Lupin
Buy Lupin Oct 1060 CALL at Rs 42.5 & simultaneously sell 1100 Call at Rs 27.5
Lot Size 850.
Breakeven Point Rs 1075
Long build up is seen in the Lupin Futures’ where we have seen 4%(Prov) rise in the Open Interest with Price rising by 2%. READ MORE
Stock recommendations by Nilesh Jain of Anand Rathi
The stock is making a higher top and higher top formation on the daily chart. It has also provided breakout from a downward sloping trend line. Recently, it surpassed its short term 21-DMA and long term 200-DMA which is placed at Rs 16,000 levels. The momentum indicators and oscillators are in the buy mode on the daily scales which hints of further positive momentum in the counter. READ MORE
Top gainers and losers on the S&P BSE Sensex at Pre-open
Markets at Pre-open
Markets at Pre-open
Stocks to watch today
TCS: Tata Consultancy Services (TCS) on Thursday became the most-valuable information technology (IT) company globally, surpassing rival Accenture for the first time. At the last closing price of Rs 2,825, TCS was valued at $144.73 billion (Rs 10.6 trillion). Accenture is currently valued at $142.4 billion. That apart, the company also announced the launch of 10 new Threat Management Centers across the globe, that will focus on providing cybersecurity services to its enterprise customers.READ MORE
RBI policy review: New MPC may opt for interest rate pause, says BS poll
Economists and bond traders are anticipating a pause in policy rates on Friday (today), expecting the monetary policy committee (MPC) of the Reserve Bank of India (RBI) to wait for more rate transmission. All 10 economists and bond traders polled by Business Standard expect the status quo to continue on rates. The MPC was originally scheduled to meet on September 29, September 30, and October 1, but the new members were not named then. READ MORE