Sensex, Nifty Fall For Fourth Day As RBI Hints At More Rate Hikes To Tackle Inflation
India's stock benchmarks fell for fourth day in a volatile session after RBI raised repo rate by 50bps to rein in inflation
Rupee Closes At A New Low
Indian currency fell 8bps to 77.79 against the dollar, during the opening minutes. The Rupee was just 1 paisa shy of hitting a fresh low.
The Rupee erased losses to close at 77.74, a new closing low. The Rupee had closed at 77.73 on May 19, the previous closing low.
Source: Bloomberg
10-Year Bond Yield Eases Off Three-Year High
Yield on the 10-year bond rose 4bps to 7.6%, a three-year high, ahead of RBI's rate decision.
The yield reversed gains to close at 7.49%, lowest close in this week so far.
Source: Bloomberg
Closing Bell: Sensex, Nifty Fall For Fourth Day As RBI Hints At More Rate Hikes To Tackle Inflation
India's stock benchmarks fell for the fourth day in a row in a volatile session after RBI raised repo rate by 50bps to rein in inflation. India's central bank also said that it would withdraw pandemic-era monetary stimulus and hinted at further rate hikes, in the upcoming months. This is the longest losing streak for Sensex and Nifty in nearly four weeks since May 13.
The Sensex fell 0.39% (over 200 points) to 54,892.49. The 30-stock gauge rose to an intraday high of 55,423.97 before falling in a volatile session. The Nifty also declined by similar magnitude to 16,356.25. Today 22 of Nifty 50 stocks rose and 28 fell.
The S&P BSE MidCap outperformed its larger peers losing 0.15% while SmallCap index almost mirrored Sensex and Nifty. Fourteen of the 19 sectoral indices compiled by BSE Ltd. declined with Telecom index losing over 1.6%. On the flipside, the realty gauge gained nearly 2%.
The market breadth is skewed in the favour of bears. About 1,555 stocks advanced, 1,767 fell and 111 remained unchanged.
TV18 Broadcast Jumps Most In Four Months As Media Stocks Gain In Weak Market
Shares of TV18 Broadcast rose nearly 12%, and led the gains in media stocks in a weak market. This is the most the stock has gained in four months.
Trading volume on the stock is 1.5 times the 30-day average. The scrip is little changed for the year so far compared to 5% loss for Sensex.
The stock is the top gainer in Nifty Media index, followed by Network 18 and Sun TV.
Source: Bloomberg
BLS International Erases Gains After Announcing Plans To Acquire Zero Mass
Shares of outsourcing firm BLS International erased gains after the company announced plans to acquire 100% equity stake of Zero Mass Pvt at an equity valuation of Rs 120 crore.
BLS E-Services, the company's subsidiary, has already entered into a share purchase agreement to acquire 88.26% equity shares of Zero Mass Private from Rs 105.91 crore. The acquisition will be completed within 60 days.
Zero Mass has been operating as the largest business correspondent network for SBI with around 11,500 activer customer service points. The company has pan-India presence with customer service points located across all states and union territories.
The company reported revenue of Rs 161 crore, Rs 173 crore and Rs 134 crore, in FY2021-22, FY2020-21 and FY2019-20 respectively.
Source: Exchange filing
ICICI Lombard Leads The Losses In Insurance Firms
CII President Sanjiv Bajaj On MPC Decision
Fintech Firm Mobikwik To Raise $100 Million After Deferring IPO
Power Index Erases Gains After Air Quality Panel Bans Use Of Coal In Delhi-NCR From January 1, 2023
Shares of power companies fell, while S&P BSE Power index declined after Commission for Air Quality Management issued directions to ban the use of coal in industrial, domestic and other miscellaneous applications in the entire Delhi-NCR region from January 1, 2023.
However the use of low-sulphur coal in thermal power plants has been exempted from the ban, according to a PTI report.
Of the 12 companies constituting S&P BSE Power index, five gained while seven fell. Adani Power lost over 2.5%, the most in the power gauge.
Source: PTI, Bloomberg
Ujjivan Small Finance Bank Approves Raising Up To Rs 1,500 Crore Through Debt
Ujjivan Small Finance Bank has approved the proposal to raise funds up to Rs 1,500 crore by way is issuance of non-convertible debt securities on a private placement basis, within one year from the date of seeking shareholders' approval.
The company will seek shareholders' approval through a postal ballot. The notice to shareholders will be sent in due course.
Shares of Ujjivan SFB fell nearly 2%, the most in nearly two weeks. The stock has slipped nearly 12% in 2022 so far compared to 5% decline for Sensex.
Five analysts raised the target price in the last month while two revised the target price lower.
Of the 16 analysts tracking the company, 11 maintain 'buy', two suggest 'hold' and three recommend 'sell'. The return potential of the stock is 29.2%.
Source: Exchange filing, Bloomberg
Experts Analyse RBI Rate Decision
European Markets Decline
European markets open lower as investors tread with caution ahead of key inflation data from the U.S. on Friday.
Credit Suisse loses over 5% after the company hinted at potential group-wide loss for the quarter-ending June.
The European Central Bank will announce its rate decision on Wednesday.
Source: Bloomberg
Realty Firms Gain As RBI Doubles Threshold For Cooperative Banks To Lend To Individuals For Buying Homes
Shares of realty companies gained after RBI doubled the threshold that cooperative banks can lend to individuals for buying homes.
In his statement, RBI governor Shaktikanta Das said 'The limits for individual housing loans being extended by urban cooperative banks and district cooperative banks are being revised by over 100%'. The move is done to ensure better flow of credit to the housing sector.
Rural cooperative banks have been permitted to extend finance to commercial real estate-residential housing, with in the existing housing finance limit of 5% of total assets.
Realty index jumped after the announcement with most of the constituents in the Nifty Realty index logging gains.
Source: RBI, Bloomberg
Yes Bank Gains After Board Revamp Plan
Yes Bank initiates process to set up alternate board.
Having achieved significant progress in implementation of reconstruction scheme, board of directors, appointed under the scheme, have recommended setting up of alternate board.
Alternate board to operate under applicable laws and regulations as opposed to current board which operates under the ambit of the reconstruction scheme.
Annual General Meeting on July 15 to consider relevant resolutions.
Source: Yes Bank Release
Rupee Depreciates Against Dollar
Rupee fell 0.10% to 77.79, just one paisa shy of record low 77.80 against the dollar.
Source: Bloomberg
Lupin Gains After Receiving Tentative Nod From U.S. FDA To Market Ivacaftor Tablets
Shares of Lupin advanced after the company received tentative approval from U.S. FDA to market Ivacaftor Tablets, 150 mg.
The drug is a generic equivalent of Kalydeco tablets, 150 mg of Vertex Pharmaceuticals.
Ivacaftor is used to treat specific types of cystic fibrosis, a hereditary disease that causes problems with breathing, digestion and reproduction in adults.
The drug will be manufactured at Nagpur facility. Ivacaftor tablets had estimated annual sales of $109 million in the U.S., according to IQVIA.
Of the 43 analysts tracking the company, 13 maintain 'buy', 15 suggest 'hold' and 15 recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 12.5%.
Source: Exchange filing, Bloomberg
Mid-Day Market Update: Sensex, Nifty Rise; HDFC Bank Leads Advance
India's stock benchmarks overcame a volatile start and advanced after RBI's rate-setting committee hiked repo rate by 50bps as the central bank intensifies efforts to tackle inflation. Gains in metal, realty and banking stocks aided the rally.
The Sensex added nearly 200 points (0.33%) to 55,290.08. The 30-stock gauge lost over 400 points to an intraday low of 54,683.30, immediately after RBI's decision before reversing the losses. The Nifty also advanced by similar magnitude to 16,469.45.
The MidCap gauge outperformed its larger peers gaining 0.5% while the SmallCap index almost mirrored Sensex and Nifty. Sixteen of the 19 sectoral indices compiled by BSE Ltd. advanced, with Realty index rising over 2% and Metal and Finance indices added 1%.
The market breadth is skewed in the favour of bulls. About 1,897 stocks advanced, 1,267 declined and 128 remained unchanged.
Energy Stocks Gain As Oil Prices Rise
Shares of Energy-related firms like HPCL, BPCL and ONGC gained amid rise in oil prices on expectations of demand recovery.
WTI crude is hovering around $120 per barrel, as on Wednesday while Brent crude rose above $120 per barrel.
Source: Bloomberg
Nifty Bank Rises After RBI's Rate Decision; All Constituents Gain
Key Takeaways From RBI Governor's Post-Policy Press Conference
75% Inflation forecast raised due to food inflation.
Spike in food inflation is linked to the war in Europe.
Expect inflation to come down and economic recovery to continue.
Rate actions are calibrated to inflation-growth dynamic.
Dropped the word 'remain accommodative' for more clarity.
Surplus liquidity is higher than pre-covid level.
Liquidity withdrawal will be calibrated and measured.
RBI is not bound by any stereotypes and conjectures.
Rate action, going forward, will depend on evolving inflation-growth dynamic.
Plans to introduce CBDC this year, but gradually.
- Shaktikanta Das, RBI Governor
Ramkrishna Forgings Erases Losses On Rs 115 Crore Export Order Win
Shares of Ramkrishna Forgings erased losses after it received an export order worth Rs 115 crore over the period of four years from a European Tier 1 supplier.
The order pertains to new differential housing case business.
Four of the five analysts tracking the company maintain 'buy' and one recommends 'sell'. The return potential of the stock is at 44.3%.
Source: Exchange filing, Bloomberg
10-Year Bond Yield Eases Off Three-Year High
10-year bond yield rose 4bps to a three-year high of 7.56% during the session.
The yield on the 10-year bond eased to 7.43% after RBI governor assured to support government's record-borrowing plan.
The 9bps fall on Wednesday is the steepest decline for 10-year bond yield in three weeks.
Source: Bloomberg
LIC Slips To Fresh Low; Market Capitalisation Falls To Rs 4.69 Lakh Crore
Shares of LIC fell 1.99% to a fresh low of Rs 738.05 apiece. India's largest life insurer has slumped 22% over issue price ahead of June 10 limit when the regulatory lock-in on shares allotted to anchor investors in the IPO ends.
This is the third continuous day in which the stock has hit record low.
LIC's market capitalisation has fallen to Rs 4.69 lakh crore.
The relative strength index of the stock is 17, suggesting it may be oversold.
Source: Bloomberg
Paytm Gains As RBI Governors Proposes To Allow Linking Credit Cards On UPI Platform
Shares of One 97 Communication (Paytm) rose after RBI governor proposed to allow linking credit cards on UPI platform. Shaktikanta Das said that RuPay credit cards will be linked to UPI, to begin with.
Paytm gained 3.5%, the most in a week, while Axis Bank which owns FreeCharge gained over 1%.
Source: RBI, Bloomberg
ITD Cementation India Gains Most In Two Weeks
Shares of construction firm ITD Cementation India gained nearly 7%, the most in over two weeks.
The rise comes after the company received Letter of Intent and notice to proceed for execution of civil and associated works on EPC basis to construct six lane Greenfield Expressway in Uttar Pradesh.
The project is valued at Rs 4,850 crore along with taxes.
Of the seven analysts tracking the company, five maintain 'buy', two suggest 'hold'. The return potential of the stock is at 51.6%.
Source: Exchange filing, Bloomberg
Inflation Is Now Projected At 6.7% In FY2022-23, Says RBI Governor
Inflation is now projected at 6.7% in FY23, says RBI governor.
Inflation seen at 7.5% in Q1FY23, 7.4% in Q2, 6.2% in Q3, and 5.8% in Q4, with risks evenly balanced.
Systemic liquidity has moderated in recent period, says RBI governor.
Overhang of excess liquidity has resulted in overnight money market rates on average trading below repo rate
'RBI Survey After Excise Duty Cuts On Auto Fuels Shows Significant Moderation In Inflation Expectations'
RBI surveys after excise duty cuts on auto fuels shows significant moderation in inflation expectations of urban households, says Shaktikanta Das.
190-basis point drop in 3-month ahead inflation expectations, 90 basis point fall in one-year-ahead expectations
Further reductions in state VAT on auto fuels can contribute to softening inflationary pressures as well as inflation expectations
Real GDP Growth Forecast For FY23 Retained At 7.2%, Says RBI Governor
Real GDP growth forecast for FY23 retained at 7.2%, says RBI governor.
Q1FY23 GDP growth seen at 16.2%, Q2 at 6.2%, Q3 at 4.1%, Q4 at 4%, with risks broadly balanced.
Investment Activity Expected To Strengthen, Says RBI Governor
Investment activity expected to strengthen, driven by rising capacity utilisation, government capex, and deleveraged corporate balance sheets, says RBI governor.
Real GDP is expected to broadly evolve on the lines of April MPC resolution
RBI surveys suggest further improvement in consumer confidence and household optimism about year-ahead
Inflation To Remain Above MPC’s Upper Tolerance Band Through First Three Quarters Of FY23, Says RBI Governor
Sustained high inflation could unhinge inflation expectations and trigger second-round effects
MPC judged that further monetary policy measures are necessary to anchor inflation expectations
Stock Benchmarks Fall As MPC Hikes Repo Rate By 50bps
10-Year Bond Yield Rises To 7.56%
Repo Rate Raised By 50 Basis Points, Says RBI Governor Shaktikanta Das
MPC voted unanimously to remain focused on withdrawal of accommodation.
SDF rate stands adjusted to 4.65%, MSF rate adjusted to 5.15%, says RBI governor.
RBI will continue to be proactive and decisive in mitigating impact of geopolitical crisis on India’s economy
Commitment to move towards normal monetary conditions in calibrated manner
Remain focused on bringing down inflation closer to target
Food, Energy, Commodity Prices Remain Elevated, Says RBI Governor
Indian economy has remained resilient, supported by strong macroeconomic fundamentals and buffers
FMCG Stocks Fall Amid Rise In Covid Cases, Surge In Oil Prices
Assessing Impact Of MPC Decison On Markets
Up to 50 bps rate hike by the RBI is already discounted by the market and, therefore , the central bank's guidance on inflation and rates will be more important. Inflation for FY23 is likely to be around 6.8% forcing the RBI to sound hawkish.For the market, more important than today's policy announcement would be the US inflation data to be released on Friday. If the US inflation print comes higher than expected, markets will start discounting a more aggressive Fed and this can cause sharp market correction. On the other hand, if the data indicate inflation peaking and potentially drifting down, the US market will bounce back providing a lift up for global markets. One predictable trend in India is that FPIs will continue to sell on every rally.VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services
MRPL Gains Over 30% In Four Days Amid Surge In Crude Prices
Shares of Mangalore Refinery & Petrochemicals gained 9.66% in intraday trade to 52-week high of Rs 118.6. The stock has gained in each of the last four sessions, adding over 30% in the period.
The rise comes amid surge in crude prices as well as the Singapore GRMs, which is an Asian benchmark.
Trading volume is more than quadruple the 30-day average. The relative strength index is 79, suggesting the stock may be overbought. Of the five analysts tracking the company, three maintain 'buy', one suggests 'hold' and one recommends 'sell'. The overall consensus price of analysts tracked by Bloomberg implies a downside of 38%.
Source: Bloomberg
Hindustan Oil Jumps Most In Over A Week
Shares of Hindustan Oil Exploration jumped over 15%, the most in over a week to Rs 224.95 apiece.
Trading volume is 16-times the 30-day average volume.
The rise comes after the company announced that both wells D1 and D2 from its B-80 block in Gujarat have been brought online for production after addressing issues faced during pre-commissioning operations.
Gas sales to GSPC commenced from ONGC's gas processing terminal at Hazira.
Hindustan Oil Exploration started producing oil from one of the wells in the block, but is operating at lower rate for safe stabilisation.
Gas produced from D2 was processed to meet the specifications and packed into ONGC pipeline from May 31 onwards. HOEC and ONGC executed gas transportation agreement on June 3, as well.
Source: Exchange filing, Bloomberg
Opening Bell: Sensex, Nifty Open Higher; ONGC, Banking Stocks Gain
India's stock benchmarks opened higher ahead of RBI's MPC decision, aided by gains in metals, banking, power stocks.
The S&P BSE Sensex rose 0.43% to 55,078.62 before erasing the gains in the opening minutes. The NSE Nifty also opened 0.4% higher at 16,474.95. Today 21 stocks rose, 28 fell and one remained unchanged.
The broader indices almost mirrored their larger peers. Ten of the 19 sectoral indices compiled by BSE Ltd. advanced with metal index gaining 0.5%.
The market breadth is skewed in the favour of bulls. About 1,246 stocks advanced, 904 declined and 84 remained unchanged.
FPIs Withdraw Money From Stocks For Eighth Month As Longest Selling Streak Extends
Rupee Opens Little Changed
Indian currency opened at 77.70 against the dollar, ahead of MPC decision.
Source: Bloomberg
10-Year Bond Yield Little Changed
Yield on the 10-year bond opened at 7.52% ahead of RBI's rate decision.
10-year bond yield rose to 7.54% on Tuesday, highest since 2019.
Source: Bloomberg
MPC Decision: What To Watch Out For
Hindustan Oil: Oil Output & Gas Sales Commences From ONGC Terminal At Hazira
Hindustan Oil Exploration Company announced that both wells D1 and D2 from its B-80 block in Gujarat have been brought online for production after addressing issued faced during pre-commissioning operations.
Gas sales to GSPC commenced from ONGC's gas processing terminal at Hazira.
Hindustan Oil Exploration started producing oil from one of the wells in the block, but is operating at lower rate for safe stabilisation.
Gas produced from D2 was processed to meet the specifications and packed into ONGC pipeline from May 31 onwards. HOEC and ONGC executed gas transportation agreement on June 3, as well.
Source: Exchange filing
In Focus: Energy-Linked Stocks As Oil Prices Rise On Hopes Of Demand Recovery
Shares of energy-related companies rise after crude oil extended gains. The rise in crude prices comes amid hopes of demand recovery as U.S. summer driving season ramps up and China emerges from crippling virus lockdowns.
In Focus: Reliance Industries, HPCL, BPCL, ONGC, Oil India
Source: Bloomberg
Trade Setup For Wednesday
Page Industries' CFO Shares Growth Outlook For FY23: Talking Point
State Of The Economy With ICICI Bank's B Prasanna
Stocks To Watch
Adani Power: The company signed share purchase agreement to acquire infrastructure development companies Support Properties and Eternus Real Estate for Rs 280.1 crore and Rs 329.3 crore, respectively.
State Bank of India: The bank appointed Alok Kumar Choudhary as the Managing Director with effect from June 7. As the new MD, he will be handling Retail Business and Operations. It also appointed Saloni Narayan, Deputy Managing Director (Retail business), as Deputy Managing Director (Finance).
Punjab National Bank: The bank approved Rs 500 crore investment in PNB Housing Finance’s rights issue. Investment in rights issue will help PNB maintain its stake at 30% or below, but above 26%. It will also retain promoter status at PNB Housing Finance.
RITES: The company signed a memorandum of understanding with Grands Trains DU Senegal, a railroad company of Senegal, on technical cooperation in the railway sector.
PNB Housing Finance: The company will consider raising Rs 2,000 crore via non-convertible debentures on June 14.
Wockhardt: The company appointed Deepak Madnani as the Chief Financial Officer from immediate effect.
Hindustan Copper: The company has resumed its mine operation at Surda mine in Jharkhand upon renewal of lease by the state government and obtaining required environment clearance.
India Pesticides: The company launched first phase of our backward integration for Pretilachlor Technical, a herbicide for rice plantation, of 2000 TPA. This will be manufactured in the existing facility at Sandila Plant, which will further safeguard the company from any supply chain challenge of the intermediate which is largely imported. It plans to expand it further in the FY 2022-23.
Sensex, Nifty Set To Gain; SBI, PNB, Adani Power, Wockhardt, Hindustan Copper In Focus
Stocks in Asia gained on Wednesday after rise in U.S. equities and a pullback in bond yields which provided some respite for investors.
Benchmarks rose in Japan, Australia and South Korea. U.S. futures slipped after the S&P 500 erased last week’s losses with two day of gains.
The Singapore-traded SGX Nifty, an early barometer of India's benchmark Nifty 50, rose 0.4% to 16,488 points as of 6:40 a.m.
The World Bank cut its forecast for global economic expansion in 2022 further, warning that several years of above-average inflation and below-average growth lie ahead.
Elsewhere, West Texas Intermediate crude rose 0.2% to $119.67 a barrel. Bitcoin rose above $30,500.
