MARKET WRAP: Sensex slips 71 pts as RBI holds repo rate; financials decline

Topics MARKET WRAP | Markets

(Photo: Kamlesh Pednekar)
Markets ended a volatile trading session in the negative territory on Thursday after the Reserve Bank of India (RBI) paused during the fifth bi-monthly monetray policy and kept the repo rate unchanged a 5.15 per cent. It, however, sharply revised the FY20 gross domestic product (GDP) forecast to 5 per cent from previously projected growth rate of 6.1 per cent on weak domestic and global demand. 

The RBI, in its policy statement, said it would maintain the 'accommodative' stance as long as it was necessary to revive growth, while ensuring that inflation remains within the target band of 4 per cent +/- 2 per cent. READ MORE

The benchmark S&P BSE Sensex closed at 40,780 level, down 71 points or 0.17 per cent. Information Technology stocks including TCS, Infosys and Tech Mahindra were among the top gainers among the Sensex pack after the domestic currency fell against the US dollar in the intra-day trade. On the downside, metal and financial counters were under pressure.

On the NSE, the Nifty50 index settled at 12,018 level, down 25 points or 0.21 per cent.

On the sectoral front, Nifty Media index ended as the top performer, up 3 per cent on NSE, while Nifty Metal index, down 2 per cent, was the worst performer.

In the broader market, the S&P BSE mid-cap index slipped 0.23 per cent to settle at 14,868.85. The S&P BSE small-cap index, however, ended 0.1 per cent higher at 13,468.89 level.

BUZZING STOCKS

Shares of rate sensitive sectors, mainly banking and automobiles, erased their early morning gains and were trading by up to 2 per cent, after the Reserve Bank of India (RBI) maintained status quo on repo rate at 5.15 per cent. READ MORE

Shares of Polycab India continued their upward journey, and hit a new high of Rs 1,090.8, up 9.8 per cent on the BSE on Thursday, on expectation of strong earnings going forward. The company was included in the MSCI Global Small Cap Index with effect from November 26, 2019. READ MORE

GLOBAL CUES

Stock markets in Asia inched up on Thursday on the possibility that China and the United States may soon seal a “phase one” deal to end their 17-month trade war, but conflicting messages from US President Donald Trump kept a lid on the advance.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 per cent, Japan's Nikkei stock index rose 0.7 per cent, and Australian shares were up 1.2 per cent.

(With inputs from Reuters)


3:45 PM IST

3:44 PM IST

3:33 PM IST -- The benchmark S&P BSE Sensex closed at 40,780 level, down 71 points or 0.17 per cent. -- On the NSE, the Nifty50 index settled at 12,011 level, down 33 points or 0.27 per cent.

2:58 PM IST Shares of Whirlpool of India continued their northward journey for the fourth straight day on Thursday and hit a new high of Rs 2,407, up 4 per cent, on the BSE on consistently strong financial performance. In the past four trading days, the stock has rallied 12 per cent, as compared to less than 1 per cent rise in the S&P BSE Sensex. A sharp gain in the market price has seen the consumer electronics company enter the list of top 100 companies with highest market capitalisation. READ MORE

2:56 PM IST

2:48 PM IST

2:40 PM IST COMPANY PRICE(rs) 52 WK HIGH CHG(rs) CHG(%) GUJARAT GAS 223.00 227.55 6.35 2.93 ICICI BANK 529.95 537.30 0.60 0.11 MAS FINANC SER 769.55 782.35 51.70 7.20 NESCO 644.40 666.30 34.55 5.67 POLYCAB INDIA 1057.25 1090.80 63.85 6.43 » More on 52 Week High

2:24 PM IST

2:23 PM IST

2:17 PM IST

2:07 PM IST The outcome of the MPC meet of the RBI indicates that the RBI is worried about the rising inflation which may not come down till atleast February 2020 and GDP may not rise materially till Q4FY20 as domestic and external demand conditions have remained weak. Hence it thought prudent not to cut rates at this juncture. Instead it has nudged the Govt to cut interest rates on small savings scheme so that interest rate transmission becomes faster. Capacity utilization that has touched a low of 68.9% in Q2FY20 needs to revive soon. It has also tightened norms for UCBs. Though the stock market participants could be disappointed by the no-repo-rate-cut action, we think that the participants are mature enough to understand the prudence of the Central Bank which means that the markets may not react downwards sharply due to this disappointment.  

LIVE UPDATES

Sectoral trends at NSE at close


Sensex heatmap at close


Closing Bell

-- The benchmark S&P BSE Sensex closed at 40,780 level, down 71 points or 0.17 per cent.

-- On the NSE, the Nifty50 index settled at 12,011 level, down 33 points or 0.27 per cent.

Whirlpool enters list of top 100 Indian firms by m-cap; stock hits new high

Shares of Whirlpool of India continued their northward journey for the fourth straight day on Thursday and hit a new high of Rs 2,407, up 4 per cent, on the BSE on consistently strong financial performance. In the past four trading days, the stock has rallied 12 per cent, as compared to less than 1 per cent rise in the S&P BSE Sensex. A sharp gain in the market price has seen the consumer electronics company enter the list of top 100 companies with highest market capitalisation. READ MORE

Sector watch | Metals lose shine; index trades over 2% lower


Market check | Sharp slide in Sensex


Stocks that hit 52-week high on BSE500 today

COMPANY PRICE(rs) 52 WK HIGH CHG(rs) CHG(%)
GUJARAT GAS 223.00 227.55 6.35 2.93
ICICI BANK 529.95 537.30 0.60 0.11
MAS FINANC SER 769.55 782.35 51.70 7.20
NESCO 644.40 666.30 34.55 5.67
POLYCAB INDIA 1057.25 1090.80 63.85 6.43
» More on 52 Week High

IT stocks under pressure


Market check


NEWS ALERT | Pennar Inds bags order worth Rs 302 cr


Expert Comment :: Dhiraj Relli, MD & CEO, HDFC Securities on RBI policy outcome

The outcome of the MPC meet of the RBI indicates that the RBI is worried about the rising inflation which may not come down till atleast February 2020 and GDP may not rise materially till Q4FY20 as domestic and external demand conditions have remained weak. Hence it thought prudent not to cut rates at this juncture. Instead it has nudged the Govt to cut interest rates on small savings scheme so that interest rate transmission becomes faster. Capacity utilization that has touched a low of 68.9% in Q2FY20 needs to revive soon. It has also tightened norms for UCBs. Though the stock market participants could be disappointed by the no-repo-rate-cut action, we think that the participants are mature enough to understand the prudence of the Central Bank which means that the markets may not react downwards sharply due to this disappointment.  

EXPERT COMMENT | Ravikant Bhat, Senior Analyst - BFSI, IndiaNivesh

‘’RBI MPC surprised with a unanimous preference for status quo on policy rates, despite observing there was room for a rate cut, due to, as Governor stated, slow transmission of earlier rate cuts. The onus clearly shifts to banks, which in our view, shall have to hasten transmission on non-repo linked loans’’.

EXPERT COMMENT | Nikhil Gupta, Chief Economist, Motilal Oswal Financial Services

As against almost unanimous expectation, the RBI has kept all policy interest rates unchanged. Repo and reverse repo rates stay at 5.15% and 4.90% respectively. Decision was taken with 6-0 vote. 2HFY20 real GDP growth forecast is cut from 6.6-7.2% to 4.9-5.5%. Growth forecast for 1HFY21 also revised down from 7.2% to ~6%. Inflation forecasts for Nov-Mar FY20 revised down from 3.5-3.7% earlier to 4.7-5.1% now and it is expected to be at 3.8-4.0% in 1HFY21. Overall, today's status quo increases the credibility of RBI's inflation mandate. We had always believed that today's cut would be the last rate cut in this cycle. We continue to maintain that there will be no more rate cuts now unless inflation falls back towards 4%. It implies that any rate cut is unlikely in the next one year.

S&P BSE Midcap index trade flat with negative bias


MARKET CHECK | India VIX jumps nearly 10%


Nov Auto Sales | Force Motors

-- Total sales come in 42% higher at 2,112 units in November vs 1,489 units in Nov '18


Brokerage views: RBI keeps rates steady, cuts GDP growth estimates

"Today’s status quo on repo rates came as a surprise as consensus was for a 25 bps rate cut. However RBI continues with its accommodative stance given its outlook for moderation in inflation below 4 per cent by H1 FY21. The concerns on relatively higher inflation (4.7-5.1 per cent) expected in the near term has led to the pause in rate cuts," said Arun Kumar, head of research at FundsIndia. 


NEWS ALERT | Won't hesitate to prevent collapse of any large NBFC: Shaktikanta Das

-- Have a fairly good idea as to which NBFCs are vulnerable

-- Top 50 NBFCs are being regularly monitored

Expert Comment :: Deepthi Mary Mathew, Economist at Geojit Financial Services on RBI policy decision

It was an unexpected move with the RBI keeping the repo rate unchanged at 5.15 percent, as the market expected 25 bps cut in repo rate. With the RBI following a inflation targeting regime, the Central Bank focused on maintaining the inflation rate within the target range The rising food inflation posed a challenge to the Central Bank in cutting the rates. However, by maintaining the accommodative stance, there is room for rate cuts in the future.

Market check | Sensex back in the green


RUPEE CHECK


NEWS ALERT | RBI, govt working in coordinated manner to revive the economy: Shaktikanta Das

-- Revival of growth is a national issue

MARKET CHECK


RBI surprise: Repo rate left unchanged; FY20 GDP forecast lowered to 5%

Springing a surprise, the monetary policy committee of the Reserve Bank of India (RBI) maintained the repo rate at 5.15 per cent points (bps) in its fifth bi-monthly monetary policy meeting of the financial year 2019-20 (FY20) on Thursday. The three-day rate-setting meet started on Tuesday (December 3). In its October meet, the RBI had cut interest rate by 25 bps to 5.15 per cent.
 
Repo rate is the rate at which the RBI lends money to commercial banks, in case of any shortfall of funds. Consequently, the reverse repo rate stands unchanged at 4.90 per cent READ MORE
Reserve Bank of India Governor Shaktikanta Das

EXPERT COMMENT | Jimeet Modi, Founder & CEO, SAMCO Securities on RBI policy decision

RBI has finally thrown the ball back in Government’s court to revive the economic engine which has further deteriorated since the last meet. Transmission of interest rates have not happened yet which could be one of the reasons RBI waited to cut rates and nudged the Government and banks to take efforts from their end. Additionally, slightly higher inflationary tendencies might have also led to the pause in rate cut. But, this is a negative for the markets as a rate cut was required to boost risk taking appetite in the economy. 

NEWS ALERT | Monetary transmission has been full and reasonably swift: RBI

 -- Transmission swift across various money market segments and the private corporate bond market

-- As against the cumulative reduction in the policy repo rate by 135 bps during February-October 2019, transmission to various money and corporate debt market segments ranged from 137 bps (overnight call money market) to 218 bps (3-month CPs of non-banking finance companies).

-- Transmission to the government securities market, however, has been partial at 113 bps (5-year government securities) and 89 bps (10-year government securities). 

NEWS ALERT | Overall liquidity in surplus in October and November 2019: RBI

-- This is despite an expansion of currency in circulation due to festival demand, notes RBI's MPC

NEWS ALERT | Households expect inflation to rise: RBI MPC

Households’ inflation expectations, measured by the Reserve Bank’s November 2019 round of the survey, increased by 120 basis points over the 3-month ahead horizon and 180 basis points over the 1-year ahead horizon as they adapted to the spike in food prices in recent months. 

Based on the Reserve Bank’s consumer confidence survey, spending on non-essential items of consumption has shrunk compared to a year ago; however,
consumers expect their overall spending to remain unchanged going forward largely due to an increase in prices.

RBI on GDP growth

Real GDP growth for 2019-20 in the October policy was projected at 6.1 per cent – 5.3 per cent in Q2:2019-20 and in the range of 6.6-7.2 per cent for H2:2019-20 – with risks evenly balanced; and 7.2 per cent for Q1:2020-21. GDP growth for Q2:2019-20 turned out to be significantly lower than projected

Six factors that influenced RBI's inflation forecast

1) The upsurge in prices of vegetables is likely to continue in immediate months; however, a pick-up in arrivals from the late kharif season along with measures taken by the Government to augment supply through imports should help soften vegetables prices by early February 2020.

2) incipient price pressures seen in other food items such as milk, pulses, and sugar are likely to be sustained, with implications for the trajectory of food inflation.

3) Both the 3-month and 1-year ahead inflation expectations of households polled by the Reserve Bank have risen and these latent sentiment upsides are being reflected in other surveys as well.

4) Domestic financial markets have exhibited volatility.

5) Domestic demand has slowed down, which is being reflected in the softening of inflation excluding food and fuel.

6) crude oil prices are expected to remain range bound, barring any supply disruptions due to geo-political tensions

(Source: Policy release)

All members vote in favour

All members of the MPC – Dr. Chetan Ghate, Dr. Pami Dua, Dr. Ravindra H. Dholakia, Dr. Michael Debabrata Patra, Shri Bibhu Prasad Kanungo and Shri Shaktikanta Das – voted in favour of the decision

GDP growth projection


Inflation projection


RBI on GDP growth

Real GDP growth for 2019-20 is revised downwards from 6.1 per cent in the October policy to 5.0 per cent – 4.9-5.5 per cent in H2 and 5.9-6.3 per cent for H1:2020-21

RBI on inflation

CPI inflation projection is revised upwards to 5.1-4.7 per cent for H2:2019-20 and 4.0-3.8 per cent for H1:2020-21, with risks broadly balanced

NEWS ALERT | Risks to inflation broadly balanced: RBI

-- Need to carefully monitor incoming data on CPI for clarity

Market check | PSBs slide


NEWS ALERT | April to Sept 2020 GDP seen at 5.9-6.3%: RBI

-- October to March GDP seen at 4.9-5.5%

Market check


Polycab India hits fresh record high; stock zooms 100% from August low

Shares of Polycab India continued their upward journey, and hit a new high of Rs 1,052, up 5 per cent on the BSE on Thursday, on expectation of strong earnings going forward. The company was included in the MSCI Global Small Cap Index with effect from November 26, 2019.
 
The stock of the fast moving electric goods (FMEG) company zoomed 100 per cent from its recent low of Rs 525, touched on August 22, 2019. It was trading at its highest level since its listing on April 16, 2019. The company issued shares at Rs 538 per share in the initial public offer. READ MORE

IndiGo slumps 4%


NIfty PSU Bank index trades in the green ahead of RBI monetary policy decision


Sensex inches higher


NEWS ALERT | Chief Eco Adviser recommends relaxing FSI to allow construction of higher buildings: CNBC TV18

-- Also, suggests to accelerate completion of 'Housing For All' scheme in urban area

Alert: FSI is Floor Space Index 

Gayatri Projects up 5% as subsidiary to sell stake in Sembcorp Energy

Shares of Gayatri Projects hit 5 per cent upper circuit at Rs 73.40 on the BSE on Thursday, after its subsidiary Gayatri Energy Ventures Pte Ltd (GEVPL) signed an agreement to sell the remaining 5.96 per cent stake in Sembcorp Energy India Limited (SEIL) to Sembcorp Utilities for Rs 406 crore.
 
According to Gayatri Projects' filing to exchanges, GEVPL will be entitled for future earn-outs "based on achievement of certain milestones by SEIL". READ HERE

Vodafone Idea slips in trade


RBI MPC meeting expectation :: Edelweiss Securities

The forthcoming monetary policy review comes against the backdrop of sharp deceleration in economic growth on one hand and rising inflation on the other. Nominal GDP hitting a low of 6% (below 10Y G-sec yield) spells trouble for tax collections, credit growth and debt-servicing.

We anticipate a 25–50 bps rate cut in the forthcoming policy with continued liquidity support. Transmission is beginning to improve and should continue to do so as the credit-deposit ratio eases further.

RBI MPC meeting expectation :: Nirmal Bang Institutional Equities

We expect the Monetary Policy Committee (MPC) to cut rates by 25bps and maintain its accommodative stance as growth takes precedence, particularly as GDP growth has slipped significantly below 5%. We believe a more aggressive cut is unlikely as headline inflation now stands at around 4.6%, above the RBI’s target mainly on account of higher food inflation. Consequently, we believe the terminal repo rate in this cycle may go as low as 4.5%.

Balrampur Chini trades near 52-week high; stock gains 6% in two days

The stock is trading close to its 52-week high of Rs 174, touched on September 25, 2019. Besides, it has outpaced the market by surging 15 per cent from its recent low of Rs 142, touched on November 22. In comparison, the S&P BSE Sensex was up 1 per cent during the same period. READ MORE

I-T crackdown: Brokers, investors come under scanner for fraudulent trades

According to sources, I-T officials on Wednesday conducted surveys and search operations at about 150 locations across the country, including Delhi, Mumbai, Hyderabad, and Kolkata. “We have launched a probe in the matter following information from the market regulator about irregularities in the equity derivative segment,” said a tax official privy to the development. The official added that this was a fresh probe based on the inspection of certain derivative contracts both on the BSE and the National Stock Exchange (NSE). READ MORE

Hudco slides 9% as two borrowing entities default on repayment dues

Shares of housing finance firm Housing and Urban Development Corporation Ltd (Hudco) were under pressure in the early trade, down 8.6 per cent to Rs 36.9 on the BSE on Thursday, after the company said two of its agencies have defaulted on payment worth Rs 87.46 crore, which has been classified as non-prforming asset (NPA). READ MORE

MARKET CHECK


Nifty Metal index is trading lower


ZEEL gains in early trade


Hero MotoCorp up 1%


BUZZING STOCK:: SML Isuzu up 7%


Sun Pharma slides 1%


Voda Idea dips 8%


Gayatri Projects gains 4%

-- ingapore-based Sembcorp Industries on Wednesday said it has signed an agreement to acquire the remaining near 6 per cent stake of its local partner Gayatri Energy Venture Pte Ltd in the Indian arm, Sembcrop Energy India Ltd (SEIL), for Rs 406 crore.


Tata Power trades mildly weaker

-- A joint venture of Tata Power and ICICI Bank on Wednesday acquired real estate baron Manoj Gaur''s biggest power plant at Prayagraj in Uttar Pradesh by agreeing to takeover Rs 6,000 crore of debt of the company.

InterGlobe Aviation trades over 1% lower


CSB Bank continues rally


Reliance Industries gains on tariff hike by Rel Jio


Bharti Airtel trades weaker


HDFC AMC down over 3%


ICICI Bank hits fresh record high


Hudco slips over 5% in first trade

-- Co says two entities with outstanding debt of Rs 869 crore have become NPA.


Sectoral trends at NSE during Opening trade


Top gainers and losers on S&P BSE Sensex during Opening trade


Market at Open


Market at Open


ICICI Bank business approach gets Street thumbs-up; stock at all-time high

The stock of ICICI Bank hit an all-time high of Rs 531.35 in intra-day trading on Wednesday, before ending the day with 4 per cent gains over previous close at Rs 529.35. This was a day after the lender presented its business perspective to analysts.
 
Among the key highlights of the analysts’ day event were ICICI Bank’s digital and technical initiatives, which should help it accelerate growth across all business verticals. The bank said it would focus on opportunities in the entire ecosystem, besides calibrating risk to propel operating profit through its approach of ‘One Bank One RoE’. A profitability indicator, RoE stands for return on equity. READ MORE

Top gainers and losers on S&P BSE Sensex during Pre-open


Market at Pre-open


Market at Pre-open


Rupee opening

Rupee opens higher at 71.48/$ vs Wednesday's close of 71.52 against the US dollar

Enter mid-caps segment with a longer-term horizon, invest through MF route

The Nifty50 index has moved up 11.71 per cent over the past three months. Even the mid-cap and the small-cap index have shown signs of revival. The Nifty Midcap 100 index is up 11.37 per cent and the Nifty Small cap 100 is up 7.89 per cent over this period.
 
Investors are wondering if this is a good time to enter these stocks. Valuation gap has narrowed: Mid- and small-cap indices were more expensive than the large-cap index in December 2017. READ MORE

RBI likely to cut rates for sixth time this year, try help growth

The Reserve Bank of India is set to deliver its sixth straight interest-rate cut Thursday, shrugging off a spike in inflation as it stays doggedly focused on supporting economic growth.
 
While all 34 economists surveyed by Bloomberg News as of Wednesday expect a reduction, the majority expect a quarter-point cut, with the rest expecting reductions of 15 basis points to 50 basis points. The RBI has cut borrowing costs by 135 basis points so far in 2019 to a nine-year low of 5.15%. READ MORE
RBI governor Shaktikanta Das

Stocks to watch

Bharti Airtel on Wednesday announced a $3-billion fund raising, including through qualified institutional placement (QIPs), mainly to pay dues linked to the adjusted gross revenue (AGR) as directed by the Supreme Court (SC) recently.
 
RIL: Goldman Sachs Equity Research has increased the 12-month target price of the shares of Reliance Industries to Rs 1,850 per share. The equity research firm also raised the earnings estimate for financial year 2021-22. READ MORE

Nifty outlook and top trading ideas by CapitalVia Global Research Limited

Wednesday’s tail end recovery brings optimism ahead of weekly expiry
 
In the first half of Wednesday's trading session, Nifty heavyweights Reliance Industries (RIL), Larsen & Toubro (L&T), and HDFC were gripped by bear. On the other hand, Tata Motors' share price gained 7 percent on after a double-digit growth in Land Rover lifted overall sales in the United States. Nifty closed with a positive bias after hovering through a wavy course ahead of the Reserve Bank's policy meet outcome. Sectoral perspective says that the action of optimism for fresh buys are visible in sectors like metals, consumer durables, IT and banking stocks. From Nifty option chain, we can see near next support level for Nifty will be at 12,000. READ MORE

Bulk deals on BSE as on Wednesday

Bulk deals on NSE as on Wednesday

FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee Check

Source: Bloomberg


Oil Check

At 8:22 AM, Brent Crude Futures were at $62.92 per barrel mark.

SGX Nifty

At 8:18 AM, the SGX Nifty was trading 23.5 points lower at 12,071 levels.

Asian Markets check


US Market check


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