 "Markets remain flat, key rates unchanged")
Benchmark indices continue to remain flat post the announcement of RBI’s first quarter review of Monetary Policy. The central bank has maintained status quo policy, by keeping the CRR, repo rate unchanged.
The RBI left interest rates unchanged on Tuesday as it supports a battered rupee but said it will roll back recent liquidity tightening measures when stability returns to the currency market, enabling it to resume supporting growth.
As expected, the Reserve Bank of India left its policy repo rate at 7.25% but took a dovish tone as it cut its growth forecast for Asia's third-largest economy to 5.5% for the fiscal year, from 5.7% previously.
By 11:20, the Sensex was lower by 8 points at 19,585 and the Nifty was flat at 5,839 levels.
EXPERT'S VIEW POST POLICY
Shubhada Rao, chief economist, YES Bank, Mumbai,
"Our sense is 58-59/$1 level will broadly be seen as comfort level for rupee. And, any trading above 60/$1 would once again get RBI in a cautious mode. As such, we may have to wait beyond a few weeks to see the rollback of these measures. In terms of a rate cut, I don't think there is any clear signal for a rate cut, I think status quo is likely.”
Sujan Hajra, chief economist, Anand Rathi, Mumbai
"The policy statement is slightly more dovish than what we had expected. The Reserve Bank of India has clearly stated that the cash tightening steps will be reversed in a calibrated manner. Supporting growth is a priority for the RBI.
"We expect that within two months, the cash tightening steps will be faded out, and monetary easing will resume. We are expecting another 50 basis points cut in the repo rate in 2013."
GLOBAL MARKETS
On the global front, Asian stocks rose on Tuesday after China's central bank injected funds into money markets for the first time since February, while the dollar index edged up from a five-week low as investors positioned for the Federal Reserve's policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan erased early losses and eked out a slight gain. A weaker yen helped Tokyo's Nikkei share average push into positive territory, and a spate of mixed Japanese economic data also contained some bright spots.
SECTORS & STOCKS
Financial shares like HDFC and ICICI Bank have gained between 0.4-1%.
Other notable gainers are JSPL, L&T, Wipro, Infosys, TCS, Sun Pharma and Cipla.
Jindal Steel and Power (JSPL) is trading higher by 3.5% at Rs 206, extending its previous day’s 5% rally, on reports that the company has emerged as a frontrunner to acquire the Indian assets of London-based Stemcor Holdings.
On the losing side, GAIL, Hindalco, Bajaj Auto, HUL, Bharti Airtel, Sterlite and Hero Moto have declined between 1-3%.
Among other shares, Jaypee Infratech is trading lower by 5% to Rs 19.60 after reporting a sharp 61% year-on-year (yoy) decline in its standalone net profit at Rs 81 crore for the quarter ended June 30, 2013 (Q1) due to higher finance cost. The infrastructure development company had profit of Rs 210 crore in year ago quarter.
The market breadth in BSE remains weak with 1,069 shares declining and 672 shares advancing.
The RBI left interest rates unchanged on Tuesday as it supports a battered rupee but said it will roll back recent liquidity tightening measures when stability returns to the currency market, enabling it to resume supporting growth.
As expected, the Reserve Bank of India left its policy repo rate at 7.25% but took a dovish tone as it cut its growth forecast for Asia's third-largest economy to 5.5% for the fiscal year, from 5.7% previously.
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It held the cash reserve ratio at 4%. The reverse repo rate also stands at 6.25%.
By 11:20, the Sensex was lower by 8 points at 19,585 and the Nifty was flat at 5,839 levels.
EXPERT'S VIEW POST POLICY
Shubhada Rao, chief economist, YES Bank, Mumbai,
"Our sense is 58-59/$1 level will broadly be seen as comfort level for rupee. And, any trading above 60/$1 would once again get RBI in a cautious mode. As such, we may have to wait beyond a few weeks to see the rollback of these measures. In terms of a rate cut, I don't think there is any clear signal for a rate cut, I think status quo is likely.”
Sujan Hajra, chief economist, Anand Rathi, Mumbai
"The policy statement is slightly more dovish than what we had expected. The Reserve Bank of India has clearly stated that the cash tightening steps will be reversed in a calibrated manner. Supporting growth is a priority for the RBI.
"We expect that within two months, the cash tightening steps will be faded out, and monetary easing will resume. We are expecting another 50 basis points cut in the repo rate in 2013."
GLOBAL MARKETS
On the global front, Asian stocks rose on Tuesday after China's central bank injected funds into money markets for the first time since February, while the dollar index edged up from a five-week low as investors positioned for the Federal Reserve's policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan erased early losses and eked out a slight gain. A weaker yen helped Tokyo's Nikkei share average push into positive territory, and a spate of mixed Japanese economic data also contained some bright spots.
SECTORS & STOCKS
Financial shares like HDFC and ICICI Bank have gained between 0.4-1%.
Other notable gainers are JSPL, L&T, Wipro, Infosys, TCS, Sun Pharma and Cipla.
Jindal Steel and Power (JSPL) is trading higher by 3.5% at Rs 206, extending its previous day’s 5% rally, on reports that the company has emerged as a frontrunner to acquire the Indian assets of London-based Stemcor Holdings.
On the losing side, GAIL, Hindalco, Bajaj Auto, HUL, Bharti Airtel, Sterlite and Hero Moto have declined between 1-3%.
Among other shares, Jaypee Infratech is trading lower by 5% to Rs 19.60 after reporting a sharp 61% year-on-year (yoy) decline in its standalone net profit at Rs 81 crore for the quarter ended June 30, 2013 (Q1) due to higher finance cost. The infrastructure development company had profit of Rs 210 crore in year ago quarter.
The market breadth in BSE remains weak with 1,069 shares declining and 672 shares advancing.