RBI rate cut fails to cheer markets; Nifty ends below 10,100 mark

All that happened in Wednesday's trade

2:45 PM

RBI POLICY: Focus on inflation

 

The MPC noted that some of the upside risks to inflation have either reduced or not materialised - (i) the baseline path of headline inflation excluding the HRA impact has fallen below the projection made in June to a little above 4 per cent by Q4; (ii) inflation excluding food and fuel has fallen significantly over the past three months; and, (iii) the roll-out of the GST has been smooth and the monsoon normal

2:44 PM

Nifty PSU Bank index rose the most led by gains in Punjab National Bank, Bank of Baroda, Syndicate Bank and Allahabad Bank, up between 0.5% to 1.5%

2:43 PM

Banking stocks erase losses to trade in green with Nifty Bank up 0.11%, Nifty PSU Bank advancing 0.54% and Nifty Pvt Bank index gaining 0.13%

2:43 PM

RBI on inflation

There are several factors contributing to uncertainty around this baseline inflation trajectory. Implementation of farm loan waivers by States may result in possible fiscal slippages and undermine the quality of public spending, entailing inflationary spillovers. Moreover, the timing of the States’ implementation of the salary and allowances award is critical – it is not factored into the baseline projection in view of lack of information on their plans. 

If States choose to implement salary and allowance increases similar to the Centre in the current financial year, headline inflation could rise by an additional estimated 100 basis points above the baseline over 18-24 months. Also, high frequency indicators suggest that price pressures are building up in vegetables and animal proteins in the near months. 

2:41 PM

All sectoral indices were trading in red post RBI policy outcome

Source: NSE

2:40 PM

Four MPC members voted in favour of 25 bps rate cut. 

2:39 PM

RBI maintains 'neutral' policy stance with a focus on 4% CPI

2:38 PM

The RBI maintains FY18 GVA projection at 7.3%

2:38 PM

Market check

Benchmark Indices extendedfalls after RBI cut repo rate by 25 bps to 6% and adjusted the reverse repo rate to 5.75%.

At 2:38 pm, the S&P BSE Sensex was trading at 32,515, down 59 points while the broader Nifty50 index was ruling at 10,083, down 31 points.

2:34 PM

Reverse repo rate adjusted to 5.75% from 6% earlier. 

2:32 PM

RBI cuts repo rate by 25 bps

 

RBI cut repo rate by 25 basis points (bps) to 6%, the lowest since November 2010. Repo rate is the rate at which the RBI lends money to commercial banks.  

Photo: Shutterstock

2:09 PM

Volatility index inches up for 3rd day

 

At 1:05 pm, India VIX was up 0.2% to 11.93. It hit a high of 12.10 in intraday trade. 

Source: NSE

 

1:40 PM

NTPC (up 4% at Rs 172) led gains on the Sensex. After successfully commissioning two charging stations for electric vehicles (EVs) in Delhi, state-run NTPC is planning to add 20 more soon. CLICK HERE FOR FULL REPORT

1:16 PM

HDFC Securities on Bajaj Auto

 

Bajaj Auto’s volumes were disappointing with domestic volumes falling by 6% to 186.5k units. Export also dipped by 8% YoY to 121.2k units. Motorcycle sales were also down by 7% YoY and 3W sales fell by 4%.

 

Although the company has shown dismal performance in July, 2017, we expect volumes to improve in H2FY18 led by festive demand. We are positive on Bajaj Auto, based on 1) Strong product portfolio and increasing portion of premium segment models (KTM, Pulsar, Avenger, Dominar etc) in overall volumes 2) revival in export volumes (management is confident of achieving double-digit growth in FY18, and 3) 3W sales will be boosted by a pick-up in rural demand, and new permits from Maharashtra, Bangalore and Delhi.

At 1:15 pm, the stock was trading 1% lower at Rs 2,790. 

12:57 PM

Market Check

 

At 12:55 pm, the S&P BSE Sensex was trading at 32,534, down 40 points while Nifty50 index was ruling at 10,096 down 18 points.

 

In braoder markets, the BSE Midcap underperformed the benchmark indices, down 0.4% while the BSE Smallcap was a little changed.