 "Nifty hovers around 7,950 post RBI policy; auto shares weak")
Markets continue to trade in a narrow range post the announcement of fifth bi-monthly monetary policy by the Reserve Bank of India.
As expected by most market players, the Reserve Bank of India has kept the repo rate steady at 6.75%. Raghuram Rajan said that the uptick in retail inflation in the last two months, especially in non-food items, warrants vigilance.
According to Jyoti Vaswani, Chief Investment Officer, Future Generali Life Insurance, " “RBI maintained status quo in key policy rates as expected after a 50 bps cut in the last policy. However, the accommodative stance still remains while keeping an eye on the slight uptick in core CPI inflation and focusing on transmission of earlier rate cuts by lenders. In spite of expected 7th Pay Commission hike, inflation is targeted to be at 5% by March 2017 while growth outlook is positive with a GDP growth estimate of 7.4% in FY2016.”
She further adds, “Overall, today’s policy action should be neutral for both Equity and Bond markets especially with key global events like US Fed rate decision ahead of us. Markets would also be watching out for RBI’s methodology for determining base rate which could have implications on profitability of lenders and borrowers going ahead.”
By 14:55 pm, the Sensex gained 34 points at 26,180 and the Nifty inched up by 20 points at 7,955. The broader markets are outperforming- BSE Midcap and Smallcap indices are up 0.4-0.6%.
S&P Small-cap index continued its rally on Tuesday, and is edged higher for the eight straight trading session.
"Markets are trading flat, Europe’s stock-index futures rose amid better-than-forecast Chinese manufacturing data and expectations for further central-bank stimulus. RBI to use Space for further easing when available - RBI leaves benchmark repurchase rate unchanged at 6.75%, we believe market in a range of 7,800 to 8,000 level." adds Rahul Shah, VP- Equity Advisory, MOSL.
In overseas stock markets, Asian shares edged higher amid speculation that the European Central Bank will announce a round of fresh measures to boost the eurozone economy at its regular monetary policy review scheduled later this week.
Back home, rate sensitive shares are trading mixed with BSE Auto and Bankex indices down between 0.2-0.5% each while the BSE Realty index is up by 0.4%.
Banking shares are trading mixed after the Reserve Bank of India (RBI) has kept key policy rates unchanged.
Axis Bank, Yes Bank, Bank of Baroda, Bank of India and Punjab National Bank from the Nifty Bank index are down less than 1%, while State Bank of India, IndusInd Bank, ICICI Bank and HDFC Bank are trading flat on the National Stock Exchange (NSE).
Most auto shares are trading weak as the monthly sales numbers are witnessing negative trend. Tata Motors, Hero Moto, Bajaj Auto, Maruti Suzuki and M&M are down between 0.1-1.4%.
Maruti Suzuki has reported an increase of more than 10% in domestic sales during November on the back of higher demand due to Diwali.
Bharti Airtel has dipped nearly 4% to Rs 322, extending its previous day’s 2% decline on the BSE, after the company announced that it plans to invest Rs 60,000 crore over the next three years to expand its network.
Among other shares, Jubilant Life Sciences has moved higher to its lifetime high of Rs 452, up 10% after the company said it has received approval Paroxetine tablets, the generic version of Paxil tablets, which is used as an antidepressant.
Eicher Motors has dipped 3% at Rs 16,205 on the National Stock Exchange (NSE) after 2/3 wheeler maker said it has reported 48% year on year (YoY) growth in total sales at 40,769 units during the month of November 2015.
As expected by most market players, the Reserve Bank of India has kept the repo rate steady at 6.75%. Raghuram Rajan said that the uptick in retail inflation in the last two months, especially in non-food items, warrants vigilance.
ALSO READ: 5 key takeaways from RBI's policy review
According to Jyoti Vaswani, Chief Investment Officer, Future Generali Life Insurance, " “RBI maintained status quo in key policy rates as expected after a 50 bps cut in the last policy. However, the accommodative stance still remains while keeping an eye on the slight uptick in core CPI inflation and focusing on transmission of earlier rate cuts by lenders. In spite of expected 7th Pay Commission hike, inflation is targeted to be at 5% by March 2017 while growth outlook is positive with a GDP growth estimate of 7.4% in FY2016.”
She further adds, “Overall, today’s policy action should be neutral for both Equity and Bond markets especially with key global events like US Fed rate decision ahead of us. Markets would also be watching out for RBI’s methodology for determining base rate which could have implications on profitability of lenders and borrowers going ahead.”
By 14:55 pm, the Sensex gained 34 points at 26,180 and the Nifty inched up by 20 points at 7,955. The broader markets are outperforming- BSE Midcap and Smallcap indices are up 0.4-0.6%.
S&P Small-cap index continued its rally on Tuesday, and is edged higher for the eight straight trading session.
"Markets are trading flat, Europe’s stock-index futures rose amid better-than-forecast Chinese manufacturing data and expectations for further central-bank stimulus. RBI to use Space for further easing when available - RBI leaves benchmark repurchase rate unchanged at 6.75%, we believe market in a range of 7,800 to 8,000 level." adds Rahul Shah, VP- Equity Advisory, MOSL.
In overseas stock markets, Asian shares edged higher amid speculation that the European Central Bank will announce a round of fresh measures to boost the eurozone economy at its regular monetary policy review scheduled later this week.
Back home, rate sensitive shares are trading mixed with BSE Auto and Bankex indices down between 0.2-0.5% each while the BSE Realty index is up by 0.4%.
Banking shares are trading mixed after the Reserve Bank of India (RBI) has kept key policy rates unchanged.
Axis Bank, Yes Bank, Bank of Baroda, Bank of India and Punjab National Bank from the Nifty Bank index are down less than 1%, while State Bank of India, IndusInd Bank, ICICI Bank and HDFC Bank are trading flat on the National Stock Exchange (NSE).
Most auto shares are trading weak as the monthly sales numbers are witnessing negative trend. Tata Motors, Hero Moto, Bajaj Auto, Maruti Suzuki and M&M are down between 0.1-1.4%.
Maruti Suzuki has reported an increase of more than 10% in domestic sales during November on the back of higher demand due to Diwali.
Bharti Airtel has dipped nearly 4% to Rs 322, extending its previous day’s 2% decline on the BSE, after the company announced that it plans to invest Rs 60,000 crore over the next three years to expand its network.
Among other shares, Jubilant Life Sciences has moved higher to its lifetime high of Rs 452, up 10% after the company said it has received approval Paroxetine tablets, the generic version of Paxil tablets, which is used as an antidepressant.
Eicher Motors has dipped 3% at Rs 16,205 on the National Stock Exchange (NSE) after 2/3 wheeler maker said it has reported 48% year on year (YoY) growth in total sales at 40,769 units during the month of November 2015.