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

That said, market participants continued to buy stocks in the broader markets after the RBI announced a special, Rs 15,000 crore-liquidity window

MARKET LIVE: Sensex falls 150 pts, tests 52k; Indiabulls Housing surges 15%

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.

(With inputs from Reuters)

5:12 PM

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

4:59 PM

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.

4:44 PM

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.

4:32 PM

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

4:20 PM

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

4:06 PM

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

4:03 PM