Sensex dips 132 pts as RBI cuts FY22 GDP growth; Nifty ends below 15,700

Topics MARKET WRAP | Markets | Sensex

Stock market updates: Benchmark indices succumbed to profit booking, even as healthy buying continued in the broader market space, after the Reserve Bank of India (RBI) kept repo rate unchanged for the sixth consecutive time at 4 per cent and maintained the policy stance as Accommodative.

The six-member monetary policy committee (MPC), however, revised the growth projection downward to 9.5 per cent from 10.5 per cent for the current financial year and revised the inflation projection upward to 5.1 per cent.

Furthermore, it announced the third tranche of bond buying worth Rs 40,000 crore under G-SAP 1.0. It also announced G-SAP 2.0, under which it will buy bonds worth Rs 1.2 trillion. The central bank will also buy bonds issued by state governments, unlike G-SAP 1.0 that was only for central government securities.

Post the announcement, 10-year government bond yields hardened by 0.4 per cent to top 6 per cent-mark while the equity markets gave up their gains.

The benchmark S&P BSE Sensex tumbled 436 points from the day's high and hit a low of 51,953. It, however, trimmed losses marginally to settle the day at 52,100 levels, down 132 points or 0.25 per cent.

On the NSE, the Nifty50 index dropped 64 points from the record high level of 15,734, touched earlier in the day, to close at 15,670 levels. 

The benchmark indices were dragged down largely by banking and FMCG counters such as Nestle India, SBI, ICICI Bank, HDFC Bank, HUL, Axis Bank, and Titan. 

Overall, the Nifty Bank index ended 1 per cent lower, followed by the Nifty Private Bank and FMCG indices, down 0.8 per cent and 0.4 per cent, respectively. On the upside, the Nifty Metal and Realty indices clocked gains up to 1.3 per cent.

That said, market participants continued to buy stocks in the broader markets after the RBI announced a special, Rs 15,000 crore-liquidity window for sectors like travel and toursim, tour operators, hotels, restaurants, aviation and related companies, spa clinics and beauty parlours.

The BSE MidCap index advanced 0.63 per cent while the BSE SmallCap index added 0.78 per cent. Both the indices hit record peak levels of 22,540 and 24,280, respectively in intra-day trade.

Among individual stocks, the stock of Indian Hotels hit a fresh 52-week high of Rs 143.75, up 6 per cent on the BSE on the back of nearly two-fold jump in trading volumes. Royal Orchid Hotels surged 10 per cent to Rs 92.70, followed by Taj GVK Hotels & Resorts (8 per cent), EIH (up 7 per cent) and Lemon Tree Hotels (up 5 per cent).

Meanwhile, liquor stocks like, United Breweries Globus Spirits, United Spirits, IFB Agro Industries, and Radico Khaitan surged between 1 per cent and 8 per cent.

Global markets
European stocks inched higher on Friday in cautious trading ahead of US jobs data with the pan-European STOXX 600 index was up 0.1 per cent. 

Earlier in Asia, Japan's Nikkei and South Korea's Kospi had slipped 0.4 per cent and 0.2 per cent, respectively. China's Shanghai Composite and Australia's ASX200 index, meanwhile, gained 0.2 per cent and 0.5 per cent, respectively.


Investment strategy :: Gaurav Dua of Sharekhan lists out trading bets from medium-term perspective

The central bank reaffirmed its commitment to support economic growth as long as necessary while ensuring inflation remain within the 2-6% target range. The moderation in real GDP estimate to 9.5% from 10.5% to factor in the impact of wave-2 of pandemic is also in line with expectations. No wonder, the bond yields have not reacted materially. The liquidity support to MSME and contact intensive sectors is a welcome step.

With quarterly results and RBI policy behind us, the focus would shift to pace of unlocking and vaccination domestically and global cues. We remain constructive on equities over the medium term and believe that cyclicals offer interesting investment opportunities from here on

Gaurav Dua is SVP, Head - Capital Market Strategy at Sharekhan by BNP Paribas

TECH VIEW :: Nifty forms bullish candle for the third straight week

The Nifty50 index closed the week at 15,670 with gains of 1.5% and has formed a bullish candle on the weekly chart for the third consecutive week. Going forward, 15,600-15,500 will act as a good support and any dip near these level will be a buying opportunity. Meanwhile,15,800 zone will be an immediate hurdle zone on the higher side. Any decisive close above 15,800 zone can quickly push index towards 16,000-mark where short term traders can think of profit booking

Views by: Rohit Singre, Senior Technical Analyst at LKP Securities. 

Trade set-up for next week :: PSUs in focus, global cues to guide trajectory

Nity50 index has crossed the major rising channel support and is now trading around it. Market breadth also remained positive for most of the week but BankNifty is still a point of concern given that it is still trading below its previous resistance. The index might take its own time to catch up but it can also turn out to be a classic Dow Theory divergence where one index is making a new high but the other is making a lower high. Until we don't see any significant bearish evidence, we suggest traders maintain a mildly bullish outlook. The immediate support is now placed at 15350.

The coming weeks could see a number of PSU heavyweights including SAIL, NTPC, Coal India etc. in focus as they come out with their numbers. Further, key developments on the disinvestment story could also keep the PSU stocks on radar. Investors should therefore place trades cautiously on PSUs to buffer from any unforeseen shocks owing to such announcements. Meanwhile, Indian markets could continue to mimic the movement across global commodities and equities. Nifty50 closed the week at 15,670.25, up by 1.52%.

Views by: Nirali Shah, Head of Equity Research, Samco Securities.

With RBI policy behind us, what will drive the markets next week?

Markets traded volatile in a range and ended flat as participants preferred to book some profit at higher levels. The MPC’s monetary policy outcome came in line with street expectations thus failed to trigger any major reaction. Amongst the sectoral indices, a mixed trend was witnessed as Banking, Consumer Durables and FMCG ended with losses whereas Oil &Gas, Capital Goods and Auto ended with decent gains. At the same time, the action continued on the broader front and both the indices ended with decent gains. On the benchmark front, Nifty settled marginally lower to close at 15,650 levels.
With no major domestic event, the focus would shift to global indices for cues. Besides, as new COVID cases have seen a considerable decline, all eyes would be on state governments for further easing of the restrictions. We may see some profit-taking or consolidation in the benchmark early next week however the trend would remain positive. Traders should maintain their focus on identifying the right stocks and utilize the dips to accumulate.  

Views by: Ajit Mishra, VP - Research, Religare Broking

MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services

The market had opened with mild positivity but pared the gains post announcement of RBI monetary policy. Factoring the impact of second-wave, RBI reduced the FY22 GDP forecast from 10.5% to 9.5% and trimmed the inflation forecast from 5.2% to 5.1%. As expected, RBI kept its policy rates unchanged and reiterated its accommodative stance. G-Sec buying and liquidity support to MSMEs and affected sectors will help to overcome the pandemic hit economy

MARKET RECAP :: S Ranganathan, Head of Research at LKP Securities

As Markets warmed up to Biden’s Tax proposal amidst encouraging payroll data, all eyes were set on the RBI Policy today morning which, as expected, held status quo and maintained its accommodative stance.

The Sensex, however, flirted around the 52K-mark even as the broader market witnessed selective buying interest in Unlock Themes with several states beginning to ease restrictions. Housing & Micro Finance entities were seen buzzing around amidst hectic activity in today's trade

BSE Snapshot :: Overall market breadth supports advances

Aviation stocks end mixed; SpiceJet up 2%, IndiGo down 0.4%

Weekend cheer for liquor stocks!

>> Investors lap up liquor stocks on hopes of liquidity support to restaurants and hotels

BUZZING :: Investors checked-into hotel stocks as RBI announces liquidity support

Broader market :: BSE SmallCap index hits record high of 24,280 intra-day

Broader market :: BSE MidCap index ends 0.6% higher

Index hit record high of 22,540 levels earlier today

NSE Snapshot :: Top gainers on the Nifty50 index today

Stocks that dragged the Sensex lower today

Sectoral trends on the NSE :: Banks decline post RBI policy outcome; metals shine

Sensex Heatmap

Top gainers: Bajaj Finserv, ONGC, L&T

Top losers: Nestle India, SBI, HDFC Bank


The benchmark S&P BSE Sensex tumbled 436 points from the day's high and hit a low of 51,953. It, however, trimmed losses marrginally to settle the day at 52,100 levels, down 132 points or 0.25 per cent.
On the NSE, the Nifty50 index dropped 64 points from the record high level of 15,734, touched earlier in the day, to close at 15,670 levels. 

India's forex reserves may have exceeded $600 billion: RBI governor

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said India's forex reserves may have crossed record level of USD 600 billion on the back of robust capital flows.
As per the RBI's data issued on May 28, the country's foreign exchange reserves rose by USD 2.865 billion to a record high of USD 592.894 billion for the week ended May 21, boosted by gold and currency assets. READ MORE

50 listed companies 'missing' after raising money, exchange chases them

A number of listed companies are not to be found on their registered address. The stock exchange has also been unable to contact them through other means. These 50 companies had been suspended for violations for more than six months. The BSE had reached out to them with show cause notices in December 2020. READ MORE

Stocks that hit 52-week high on BSE today in an otherwise volatile market

Company PRICE(rs) 52 WK HIGH CHG(%)
Adani Enterp. 1693.35 1713.55 6.93
Adani Total Gas 1642.40 1680.00 1.21
Ambuja Cements 332.30 337.20 -0.34
Bajaj Finance 5995.95 6009.00 1.60
Bajaj Finserv 12141.30 12170.00 2.71
» More on 52 Week High

AMC rides stock roller-coaster after $587-mn share sale to cut debt load

It’s been quite a week for AMC, a company that’s become the king of meme stocks. The stock’s surge has enabled the movie-theater chain to sell equity on more than one occasion to shore up a depleted balance sheet that left AMC staring at potential bankruptcy only a few months ago in the face of the pandemic and brutal competition from streaming services. READ MORE

BUZZING STOCK:: Indiabulls Housing Finance surges 10%

HDFC Bank, ICICI Bank, and RIL contribute the most to Sensex's 200-point fall today

MARKET UPDATE:: S&P BSE MidCap index extends gain

RBI Policy Reaction :: Subodh Rai, Chief Ratings Officer & Senior Director, CRISIL Ratings

The on-tap liquidity window of Rs 15,000 crore for contact-intensive sectors is a material liquidity boost to companies operating in the hospitality, travel and tourism, and aviation ancillary services sectors, which have been hit hard by the second wave of the Covid-19 pandemic. It is timely because companies in these sectors have been reeling under a demand shock – the current quarter could see a contraction of 30-50% sequentially. They also have high leverage of more than 2.5 times, which reduces their ability to withstand such jolts to demand. This move, and the expanded ECLGS will go a long way in supporting liquidity for contact-intensive sectors.

Continuing to lend a calming hand, RBI has its job cut out from here on

The RBI’s monetary policy was on expected lines – not merely with respect to the headline policy rates, but also the enablers that the Reserve Bank of India (RBI) has consistently tried to build as a response to the pandemic – that of providing adequate liquidity, managing the government security yields and push credit to segments that are starved of funds. The RBI finds itself in a bit of a challenging situation now whereby the second COVID-19 wave has worsened the growth prospects and once again truncated the recovery process that was evolving during Q3 and Q4 of FY21. READ MORE

MARKET STRATEGY :: Indices volatile post policy announcement; how to trade ahead?

The June Policy had no surprises in terms of focus, which continues to be revival of sustainable growth conditions. Inflation will play second fiddle for now, till it remains within tolerance levels.
Any extreme views on market direction need to be avoided. Our overall portfolio allocation would reflect a neutral bias on rates. The core portfolios of most open-ended debt schemes will operate slightly below the mid points of their duration mandates. The huge steepness in the yield curve along with some select exposures to structured high grade assets will sustain and cushion overall returns in this uncertain environment.
We would recommend continued discipline in investor allocations, driven primarily by their holding period considerations. This will ensure that investors capture the curve steepness without getting negatively impacted by interim market volatility. Moderate duration allocations can form the core for now. Rolldown strategies across the yield curve can be considered, but with a clear understanding on required holding periods.

Views by: Amit Triphati,CIO- Fixed Income, Nippon India Mutual Fund

What does RBI policy announcement mean for the bond market?

There is no doubt in our mind that the RBI wishes to see bond yields trending down. The RBI Governor’s comments during the speech that “We do expect the market to respond appropriately to this announcement of G-SAP 2.0” highlights that point, in our opinion.
We believe that the RBI will continue in its efforts of some sort of yield curve control until there are clear signs of revival of economic growth while seeing through recent increase in supply-side inflationary pressures. This could result in some reduction in term premiums on the long end of the sovereign yield curve and potential price appreciation in the medium-term.
The RBI has also noted tightening of credit spreads across the high-quality corporate bond yield curve in FYTD22. This can be attributed to sharp increase in demand for quality bonds and decline in supply due to reduction in economic activities and distribution of credit flows. We expect credit spreads to remain tight until H2FY22 when we expect economic activities to normalize.

-- Edelweiss AMC

RBI policy: No explicit time frame for continuation of accommodative stance

The Committee has kept the repo rate unchanged at 4 per cent in its second policy review for FY22, in line with the primary mandate of ensuring that the CPI inflation remains within a band of 2-6 per cent, while supporting growth. It has also decided to maintain the accommodative stance, for as long as necessary to durably revive and sustain growth and mitigate the economic impact of the pandemic, while ensuring the CPI inflation remains within the target. READ MORE
Aditi Nayar, Principal economist ICRA

BoI posts Q4 profit of Rs 250 cr versus Rs 3,571 cr loss a year ago

Public sector lender Bank of India (BOI) posted a net profit of Rs 250 crore in the fourth quarter ended March 2021 (Q4FY21) on a rise in other income and dip in provisions for bad loans.
It had posted a loss of Rs 3,571 crore in the quarter ended March 2020 (Q4FY20). For the full financial year FY21, it posted a net profit of Rs 2,160 crore, as against loss of Rs 2,957 crore in FY20. READ MORE

Analysts bet on larger players in travel & tourism space post RBI's support

The Reserve Bank of India (RBI), on Friday, announced a Rs 15,000-crore liquidity window for sectors hit hard by the Covid-19 pandemic, especially in the second wave, including travel, tourism, hotel, aviation, and salons. The move, analysts say, could be the first among the many steps that the central bank may announce. Following the development, shares of hotels, restaurants and its related business companies rallied up to 10 per cent on the BSE in intra-day trade. READ MORE

Adani Enterprises becomes second-most valuable Adani Group firm

Adani Enterprises has now become the second most valuable company among the Gautam Adani-led Adani Group of companies as the stock hit a new high of Rs 1,694 after rallying 7 per cent on the BSE on Friday in intra-day trade. The stock was trading higher for the fifth straight day and has rallied 30 per cent during the week, as compared to 1.5 per cent rise in the S&P BSE Sensex. READ MORE

MARKET UPDATE:: Sensex at day's low

Top losers on BSE at this hour

Company PRICE(rs) CHG(%)
Nilkamal Ltd 2346.15 -5.71
SIS 425.65 -3.93
RBL Bank 212.80 -2.70
Crompton Gr. Con 400.75 -2.24
IFB Industries 1124.90 -2.21
» More on Top Losers

Strong order book, improving cash flows positive for Motherson Sumi

The stock of India’s largest auto component maker shed 7 per cent on Thursday after brokerages downgraded it on higher valuations. A strong March quarter performance had seen the Motherson Sumi scrip jump about 13 per cent on Wednesday but the rally fizzled out.
Despite the stock volatility, the fundamentals have seen an improvement with gains including a robust order book, potential for margin gains, improvement in cash flows and debt reduction. READ MORE

IndiGo to report Q4 results tomorrow; Here's what analysts expect

Centrum Broking
Painting a grim picture, the brokerage expects IndiGo’s net loss to widen sequentially to Rs 743.3 crore from Rs 620.1 crore incurred in Q3FY21, mainly on account of 28.3 per cent QoQ rise in fuel prices. On a yearly basis, however, the loss may contract from Rs 870.8 crore reported in the March quarter of FY20 (Q4FY20). READ MORE

Bharat Forge surges 8%, hits 52-week high post March quarter results

Shares of Bharat Forge moved higher by 8 per cent to Rs 749, also its 52-week high on the BSE in intra-day trade on Friday after the company reported a consolidated profit after tax of Rs 212 crore for the March quarter (Q4FY21), on healthy sales income. The auto ancillary company had posted a loss of Rs 68.6 crore in Q4FY20. The stock had hit a record high of Rs 800 on March 1, 2018. READ MORE

RBI policy: Any weakness in rate sensitive stocks is an opportunity to buy

The Reserve Bank of India's on Friday kept the benchmark interest rate unchanged amid coronavirus uncertainty and fears over inflation. The repo rate (lending rate) will continue at 4 per cent and reverse repo rate (RBI’s borrowing rate) at 3.35 per cent. With this, the repo rate has remained unchanged for a sixth consecutive time. READ MORE

RBI Governor says

>> Have major concerns around cryptocurrencies; no change in our stance

RBI Governor

>> Have advised banks and NBFCs to push up capital buffers to protect themselves against the stress from the second wave
>> Our expectation is that NPAs will remain within our past estimates and will remain manageable

MARKET UPDATE:: Sensex turns positive in volatile trade

RBI GOVERNOR :: Closely monitoring growth revival, inflation dynamics

>> Focus on growth will continue; inflation well within 2-6% band

RBI Governor says

>> Surplus transfer is not a policy but an accounting issue

COMMENT :: Barclays on RBI policy

The measures unveiled today should be seen in context of the continuous liquidity pumping done by the central bank through the past year. Since the emergence of the pandemic, we estimate that the RBI has infused liquidity to the tune of Rs 15.8trn.
The RBI expects vaccinations to pick up pace in coming months, which may mitigate downside risks to growth, along with buoyant export demand. RBI’s current growth projections bring the central bank closer to Barclays estimate of 9.2% y/y for this fiscal.

COMMENT :: Dr M Govinda Rao, Chief Economic Advisor, Brickwork Ratings

MPC’s growth and inflation estimates seem credible with an upward bias in the former, and the assurance of continuation of accommodative stance to support and nurture the growth recovery, while assuring to keep the interest rate low.

NEWS ALERT :: RBI deputy guv Michael Patra says

>> Inflation is persistent only when demand is high

>> However, at the moment, there is no demand pressure in the economy. Therefore, we are not concerned about elevated inflation.

>> If at all demand pressures begin to creep in, the RBI will take appropriate steps.

RBI Deputy Governor Patra

>> Forward FX rate is a market outcome
>> Stand ready to take action to cool forwards as necessary

RBI Governor: Not thinking at the moment about normalising policy stance

>> Hike in CPI inflation forecast not significant

NEWS ALERT :: RBI Governor says

>> Covid-19 cases have come down sharply over the past 2 weeks

>> Expect demand situation to improve from Q2FY22 onwards

RBI GOVERNOR :: We remain focussed on orderly evolution of bond yield

>> Gilt yield curve inverted due to abundant liquidity

>> Bond yields haven't really gone up
>> Inflation print gives scope to step up on liquidity operations

NEWS ALERT | Nothing sacrosanct about 6% 10-year yield: RBI Governor

-- We are focused on the entire yield curve across maturities, not just 10-year: RBI Guv

-- G-Sap auctions included bonds of several maturity profiles: RBI Guv

Q4 results :: Bharat Forge

> Revenue at Rs 1307.4 cr vs Rs 881.2 cr YoY
> EBIDTA at Rs 333.2 cr vs Rs 148.2 cr YoY
> PAT at Rs 205.5 cr vs Rs loss of Rs 73.2 cr YoY

COMMENT :: Madhavi Arora, Lead Economist, Emkay Global

While we do not see any action on the policy rate front in the coming months, we are poised to see a more accountable and action oriented RBI ahead. We reckon even as yields may inch up gradually and orderly, the RBI will continue to strive fixing skewed yield and maintain its preference for curve flattening (with GSAPs and OMOs). We see net OMO + GSAP purchases to the tune of Rs4.5-5tn in FY22

COMMENT :: Dr. Aurodeep Nandi, India Economist & Vice President at Nomura

Monetary policy hand-eye coordination is getting increasingly complicated, as the second wave is impacting growth comes at a time of rising inflationary pressures. The RBI’s policy actions today were largely on expected lines — keeping all three levers — rates, stance and forward guidance unchanged and dovish, while relying on G-SAP as a tool to deliver further accommodation and to prevent any premature tightening of financial conditions.

For now, we expect the RBI to remain accommodative for the foreseeable future, and the timing of the RBI’s ‘policy pivot’ towards normalization will remain crucially contingent on the economy’s ‘vaccine pivot’ towards sustainable growth recovery

COMMENT :: Suvodeep Rakshit, V-P & Senior Economist, Kotak Institutional Equities

Markets could be slightly disappointed with the last tranche of GSAP 1.0  including SDL within the Rs400 bn limit, especially, after the announcement of a possible Rs1.58 tn borrowing by center as back-to-back loans to the states. However, this would be a policy that is in line with market’s expectations. GDP growth estimate for FY2022 was revised down to 9.5%, again broadly in line with  consensus estimates. We expect GDP growth at 9%. Estimate for average inflation was marginally revised higher to 5.1%. We estimate average CPI inflation at 4.9%.

COMMENT :: Aditi Nayar, vice-president and principal economist, ICRA

While the MPC's real GDP growth projection of 9.5% is in line with the upper end of our own forecast range of 8-9.5%, we believe that accelerated vaccine availability, resulting in a back-ended surge in domestic demand, is central to this outcome. Such a resurgence in demand may however be inconsistent with an average CPI inflation of 5.1% in FY2022, unless taxes on fuels undergo an appreciable reduction.
The inclusion of SDL in the last tranche of GSAP 1.0 is likely to temporarily moderate the 10 year G-sec-SDL spread below the prevailing 80 bps. Nevertheless, a sustenance of lower spreads may require continued purchases of SDL by the Central Bank through GSAP or regular OMO.

Aditi Nayar, principal economist, ICRA

RBI Policy Reaction

With growth slowing and rise in inflationary pressures, RBI expectedly kept a status quo on the policy rates and maintained accommodative stance, signalling continuation of easy financial conditions. Downward revision in FY22 GDP growth projection to 9.5% was quite expected, but seems little optimistic when compared with consensus estimates. Nevertheless, RBI pursued its broad intent of plugging weak spots in the economy by providing on tap liquidity with additional lending to distressed and contact-sensitive sectors.
On inflation, the CPI projection of an average of 5.1% for FY22 looks credible as higher oil and commodity prices is leading to elevated price pressure. Though healthy monsoon and higher crop output may somewhat contain food inflation. Announcement of another round of G-SAP and devolvement of various bond auctions clearly convey RBI’s stance on interest rates and government borrowing costs.  
On the repo rate, we have hit the floor, with further rate cut completely ruled out given the prevalent negative real interest rates. With the space for traditional monetary policy being constricted, we expect the RBI to continue to use its balance sheet to keep financial market conditions easy.

-- Amar Ambani, Senior President and Head of Research – Institutional Equities, YES Securities

Hotel, liquor shares gain post RBI policy; Indian Hotels hits 52-wk high

“In order to mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors, a separate liquidity window of Rs 15,000 crore is being opened till March 31, 2022 with tenors of up to three years at the repo rate,” RBI Governor Shaktikanta Das said in the monetary policy statement. READ MORE

NEWS ALERT | The global economic recovery has been gaining momentum: RBI

-- This has been driven mainly by major advanced economies (AEs) and powered by massive vaccination programmes and stimulus packages

-- Activity remains uneven in major emerging market economies, with downside risks from renewed waves of infections

RBI Policy Reaction | Deepthi Mathew, Economist at Geojit Financial Services

In an expected move, RBI maintained the status quo in policy rates. To support and revive the economy, RBI would continue with the accommodative stance as long as it is needed. The Governor cautioned about the factors that could put upward pressure on inflation. The announcement of G-SAP 2.0 at INR 1.2 lakh crore for Q2FY22 shows RBI’s commitment to keeping the bond yields in check. The inclusion of SDL on G-SAP would support state government borrowings from the market.

Rate sensitive shares mixed after RBI maintains status quo on repo rate

Shares of rate sensitive sectors were trading mixed with banks largely lower after the Reserve Bank of India (RBI) maintained 'status quo' on interest rates during the bi-monthly monetary policy decision. While, automobiles, real estate, select non-banking financial companies (NBFCs) and housing finance companies stocks were trading up to 1 per cent higher, the benchmark Nifty50 index was down 0.06 per cent at 10:38 am. READ MORE

MARKET UPDATE:: Broader indices outperform benchmarks

RBI Policy Reaction :: Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Monetary policy came completely on expected lines: no change in policy rates, a continuation of the accommodative policy stance and 1% downward revision in FY22 GDP growth rate by 100bp. Governor Das has reiterated that the central bank's priority now is to support growth. That's why the MPC has stated that "the accommodative stance will continue as long as necessary" even while raising the CPI inflation forecast to 5.1% for FY 22. The announcement of G-SAP  2.0 to the tune of Rs 1.2 lakh crores will ensure adequate liquidity in the system. On tap liquidity window for contact intensive sectors is an unconventional measure to mitigate the sufferings of segments like hotels, restaurants, tourism, bus operators, beauty parlours, saloons etc. Upward revision of inflation rate will raise bond yields marginally in the short run"

Sector Watch :: PSBs in the red

Market Check :: Sensex slips into the red post RBI policy outcome

RBI Policy Reaction | Thomas Cooks hits 5% upper circuit on liquidity window announcement

RBI POLICY OUTCOME :: Shaktikanta Das says

>> Special liquidity facility of Rs 16,000 crore to Sidbi to support MSMEs extended


Resolution Framework 2.0: Coverage of Covid 2.0 recast scheme from Rs 25 crore to Rs 50 crore to cover more MSMEs and small businesses

Aviation stocks mixed post RBI's liquidity support announcement

RBI Policy Reaction | Hotel stocks zoom on liquidity support

RBI POLICY OUTCOME :: Special liquidity window opened for tourism, hotels, aviation sector

>> On-tap liquidity window of Rs 15,000 cr being opened till May 31, 2022

>> Fresh lending support to restaurants, tour operators, conference organisers, spas, beauty parlours, etc. Banks to provide loans at RBI's repo rate

Bond Market Alert

>> Benchmark bond yield remain little changed at 5.99% post RBI's GSAP announcement

RBI POLICY OUTCOME :: FY22 GDP growth forecast revised downwards

>> Q1FY22 GDP growth rate now seen at 18.5% vs 26.2% earlier

>> Q2 at 7.9%; Q3 at 7.2% & Q4 at 6.6%

RBI POLICY OUTCOME :: RBI to conduct next leg of G-SAP worth Rs 40,000 crore on June 17

>> Of this, Rs 10,000 crore would be part of SDL (State Development Loans)

>> Further, bonds worth Rs 1.20 trillion would be auctions under G-SAP 2.0

>> To undertake G-SAP 2.0 in Q2FY22

RBI POLICY OUTCOME :: Shaktikanta Das says

>> Going forward, RBI will continue to conduct regular operations for liquidity management

RBI POLICY OUTCOME :: The intensity of Covid second wave more severe, says Shaktikanta Das

With this, the MPC's focus is shifting from systematic liquidity to its equitable distribution

RBI POLICY OUTCOME :: Shaktikanta Das says

>> CPI inflation is projected at 5.1% in FY22

>> 5.2% in Q1; 5.4% in Q2; 4.7% in Q3; and 5.3% in Q4 with risks broadly balanced

RBI POLICY OUTCOME :: Shaktikanta Das says

>> Upside risks to inflation persist from second wave, restriction in activity

RBI POLICY OUTCOME :: Shaktikanta Das says

>> With external demand strengthening, a rebound in global trade is taking hold
>> This should support India's export sector

RBI POLICY OUTCOME :: FY22 real GDP seen at 9.5%, says Shaktikanta Das

>> Rural demand is expected to remain strong going-forward on the back of a normal monsoon

RBI POLICY OUTCOME :: Shaktikanta Das says

>> 2nd Covid wave associated with a higher morbidity rate
>> Unlike in the first wave, impact on economic activity relatively contained in Wave II
>> People and businesses are adapting to pandemic related restrictions

MARKET CHECK :: Sensex hits day's high

RBI MPC meet LIVE :: Shaktikanta Das says

>> To maintain accommodative stance as long as necessary to revive and sustain growth 

RBI POLICY OUTCOME :: Shaktikanta Das says

>> Forecast of normal monsoon, the resilience of farm economy, gathering global economic recovery can provide tailwind to the domestic economy as COVID 2.0 recedes

RBI MPC meet LIVE :: Shaktikanta Das says

>> Data suggests India's FY21 GDP contracted 7.3%

>> The spread of Covid infections in rural areas and dent of consumption demand in urban areas post downside risk

>> The rising crude prices is worsening economic conditions

RBI MPC meet LIVE :: Shaktikanta Das says

>> MPC keeps repo rate unchanged at 4%

>> MPC continues with 'accommodative' stance 

Larsen & Toubro rallies 15% in a month, nears record high

Shares of Larsen & Toubro (L&T) were up 2 per cent at Rs 1,538 on the BSE in intra-day trade on Friday in an otherwise range-bound market. The stock of the construction & engineering major was trading at its highest level since March 12, 2021. It was hovering close to its all-time high level of Rs 1,593 touched on February 2, 2021. The S&P BSE Sensex was up 0.10 per cent at 52,282 points at 09:25 am. READ MORE

Sector Watch :: Nifty Bank flat ahead of RBI outcome

MORNING MARKET COMMENTARY :: Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Two features of the market rally this year stand out: One, the rally has been steady with surprising lack of volatility; two, the broader market has been outperforming significantly. While the Nifty is up 12.22% YTD the Nifty Mid & Small-cap indices are up by 26.48% & 33.20% YTD respectively. The spectacular performance of many mid-small-cap firms in Q4 FY21 and positive commentaries by managements have created lot of interest in these segments. Active retail participation in the broader market also is a significant factor contributing to the exuberance. A disturbing aspect in this broader market rally is the retail investors buying low-grade small-cap stocks driven by the FOMO (Fear Of Missing Out) factor. Investors have to exercise caution.
Today's monetary policy announcement is unlikely to impact markets since it is likely to keep repo rate unchanged while continuing with the accommodative stance. However, some unconventional policy initiatives can be expected.
Market moving data is likely to come from the US job numbers expected today. US jobs data has implications for inflation, bond yields, Fed's likely policy moves and hence for financial markets globally

NEWS ALERT :: RailTel bags new order worth Rs 120 crore

RailTel Corporation of India Ltd has received the work order of total amount of Rs. 119.72 crore (Including GST) from Bharat Coking Coal Limited (BCCL), for Implementation of MPLS-VPN services alongwith Miscellaneous services at 340 locations of BCCL for the period of 60 months (5 years).

Nifty hits record high ahead of RBI policy outcome

>> Index touches new peal of 15,724

NEWS ALERT :: Religare board to meet on June 8 to mull fund raising, suggests report

>> Religare Enterprises may raise Rs 300-400 crore 
>> Marquee investors, including existing investors considering infusing funds
>> Religare studying contours of insurance arm Care Health IPO

(Source: TV News) 

Muthoot Finance extends post-result rally

Titan takes a breather post a 7% rally on Thursday

>> The stock hit fresh record high of Rs 1,710 earlier today

ALERT :: Sensex gains momentum, reclaims 52,300

BUZZING :: Aditya Birla Fashion leaps 5%

Coromandel International jumps 4% on F&O inclusion

The National Stock Exchange, on Thursday, added Coromandel International, Aditya Birla Fashion, Metropolis Healthcare and The India Hotels for trading in the futures and options segment. Their derivative contracts will be available to traders for trading from June 25.

M&M up 1% on new order win

Ministry of Defence signed a contract with Mahindra Telephonics Integrated Systems for procurement of 11 Airport Surveillance Radars with Monopulse Secondary Surveillance Radar for Indian Navy and Indian Coast Guard. The procurement will be made under the ‘Buy & Make’ category and will cost MoD Rs 323.47 crore.

BUZZING :: Kalyan Jewellers trades above listing price

Telecom equipment manufacturers gain; ITI up over 4%

The Department of Telecom issued guidelines on implementation of production-linked incentive (PLI) schemes for equipment manufacturers in the sector.

Result Reaction :: Gujarat State Petronet rallies 4.6%

The company reported a higher consolidated profit at Rs 577.5 crore for the quarter ended March 2021 as against Rs 497.67 crore in the same quarter last fiscal.

APL Apollo Tubes up 1% post Q4 results

NEWS IMPACT :: TBZ soars over 8% on report US suspends tariffs on Indian jewellery import

Sectoral trends on the NSE :: Defensives on backfoot, realty stocks surge

Sensex Heatmap :: ONGC gains 3%, Nestle down 1%

Opening Bell :: Nifty trades flat

Opening Bell :: Sensex off morning lows

Commodity Heatmap

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

Pre-open session

Pre-open session

Citi downgrades Motherson Sumi to Sell

Downgrades to Sell from Neutral | Target: Rs 215/share

>> Strong stock performance appears to price in SMRPBV margin improvement 

>> SMRPBV margins have peaked in Q4 

>> Uncertainty continues on India business post restructuring

>> At 35/29x FY22/23 PE, risk-reward appears unfavorable

Citi bullish on L&T on comfortable valuation

Maintains BUY | Target: Rs 1,685/share

>> Covid second wave's impact on execution is much lower than first

>> Confident of maintaining margins in FY22E despite increased margin in FY21 

>> Ordering prospect at Rs 9.06 trillion is up 8.5% YoY

>> Working on FY22-FY27 strategic plan and details will be shared in 3Q/4QFY21

>> Valuation at 16x core FY23E EPS is reasonable, in our view.

Jefferies maintains Buy on HEG

Maintains BUY | Target: Rs 3,065/share

>> Optimistic Outlook; Capacity Utilization at +85%

>> Operational cycle appears to be turning favourable for Graphite Electrodes

>> HEG's capacity utilization improved from 45% in Q1 to 85% in Q4FY21

>> Electrode prices have risen by ~20% YTD

>> Bulk of higher- cost needle coke inventory was liquidated by HEG in Q4

ALERT :: Jewellery stocks in focus

>> US suspends tariff on Jewellery imports from India.
>> Alert: USA is India’s major export market for gem and jewellery products.  Exports of around $9.3 billion ie 25.6% of total gem & Jewellery export goes to the US

Source: TV flashes

Fuel price update

ALERT :: Glenmark in focus

>> Glenmark Pharma gets final US FDA nod for Theophylline Extended Release Tablets.

>> Co is eligible for 180-day of CGT exclusivity for the drug

Click here for more details

Top stocks to watch today

Earnings Today: PNB, Bank of India, Bharat Forge, Jubilant Pharmova and NIIT are among 34 companies slated to post their quarterly numbers today.
Rate sensitive stocks: Rate sensitive stocks will be in focus as the RBI is scheduled to announce its decision in interest rates. Experts told PTI the central bank is likely to keep the benchmark interest rate unchanged given COVID-19 uncertainty and fears over inflation.
Telecom stocks: The Department of Telecom issued guidelines on implementation of production-linked incentive (PLI) schemes for equipment manufacturers in the sector. READ MORE

RBI will reiterate the need for right policy mix, says expert

Since the RBI’s first Monetary Policy Committee (MPC) meeting for FY22 in April, the global and domestic economic scenes have changed significantly. The outlook for major economies, especially the US and China, has brightened and commodity prices have escalated on demand optimism.
There is a growing concern this may make their central banks rethink their accommodative policy stance, sooner than later. READ MORE

RBI monetary policy: Bond market expects minimum Rs 1 trn of G-SAP in Q2

The bond market is eagerly waiting for the Reserve Bank of India (RBI) to announce how much it plans to buy in the second quarter under its government securities acquisition programme (G-SAP), and if the second tranche would bring in any conditions. The central bank has plans to buy Rs 1 trillion of bonds under the G-SAP in the first quarter, of which it has already bought Rs 60,000 crore of bonds. READ MORE

Growth forecast, rates: 5 key things to look for in RBI monetary policy

The Reserve Bank of India (RBI) is expected on Friday to hold interest rates after a three-day meeting of its Monetary Policy Committee (MPC). The policy will likely maintain an accommodative stance, as helping economic growth remains priority. Here are key decisions to look from the review meeting: Growth forecast likely to be trimmed The market will look out for RBI’s GDP growth forecast for the financial year. READ MORE

Osho recommends Escorts, Godrej Properties. Time to buy and hold

GODREJPROP has witnessed an Inverted Head & Shoulder pattern breakout on daily chart post taking support near its long-term exponential moving average, indicating bullish sentiment in the counter. Also, the stock is placed well above all its major moving averages on daily time frame and even on the oscillator front, 14 period RSI has seen positive crossover and is aggressively heading northwards, affirming the bullish stance in the counter in near future. READ MORE

Bull Spread Strategy on Bajaj Finance

Bull spread Strategy on BAJAJ FINANCE
Buy BAJAJ FINANCE JUNE 6000 CALL at Rs 164 & simultaneously sell 6300 CALL at Rs 70
Lot Size: 125
Cost of the strategy: Rs 94 (Rs 11750 per strategy) READ MORE

Bulk deals on the BSE as on Thursday

Bulk deals on the NSE as on Thursday

FII turned net buyers on Thursday

Rupee check

Source: Bloomberg

Oil check :: Brent hovers near $71/bbl-mark

SGX Nifty alert :: Indices cautious ahead of RBI policy outcome

>> At 8:16 AM, the SGX Nifty index was at 15,692 levels, down 3 points

Asian stocks follow Wall Street cues

Asian stocks followed Wall Street lower. Japan's Nikkei fell 0.8% early in the Asian session, while MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.3%. Chinese blue chips slipped about 0.1% at the open.

Wall Street on Thursday

US stocks ended lower in the overnight session, with tech shares dragging on the S&P 500 and Nasdaq, as investors balanced concerns about inflation and the Federal Reserve reining in stimulus with relief about corporate tax hikes.
The Dow Jones Industrial Average 0.07%, the S&P 500 lost 0.36% and the Nasdaq Composite dropped 1.03%.

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