 "Rate-sensitive shares mixed as RBI maintains status quo")
Markets have turned flat in the afternoon trades as the central bank announced is fifth bi-monthly policy on the expected lines. The RBI has maintained status quo on key benchmark rates.
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%
At 1:45 PM, the Sensex was at 26,152, up by 7 points while Nifty was at 7,946, up by 10 points.
The top gainers on the Sensex are Vedanta, Tata Steel, Hindalco, HUL, and Dr Reddy’s, up between 2-3% each.
The biggest losers on the Sensex are Hero Motocorp, Tata Motors, Gail, Axis Bank, Bharti Airtel down between 1-3.5% each
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(updated 11:30 AM)
Markets have given a lukewarm response to the central bank’s stance on its fifth bi-monthly monetary policy in which the Reserve Bank of India maintained a status quo on key benchmark rates. The repo rate remained unchanged at 6.75% while the CRR remained unaltered at 4%.
Most analysts and economists had expected the central bank to keep key rates unchanged as the Governor would like to hold on to the horses until the US Federal Reserve provides a significant direction on the US monetary policy.
Also, the lackadaisical economic data – the creeping rise in consumer inflation and the slowdown in factory output- has weighed on the sentiment.
At 11:30 AM, the Sensex was at 26,189, up by 42 points while Nifty was at 7,956, up by 20 points.
“Overall, the RBI Policy was in line with expectations. There were no expectations of any action in the policy rates and the RBI has acted in line. One positive commentary was the urgency to link the final base rate to the marginal cost of funds. Effective implementation of the same shall result in faster transmission of rate cuts to the end borrowers. The markets and the RBI will keep a close watch on the FOMC and that shall be a key determinant of future policy action. Indian markets will largely track global market movements until January-end when the expectations shall getting build for the Budget, "said Jimeet Modi, CEO, SAMCO Securities
He further said, "Only key trigger could be the possible passage of the GST bill in the winter session of the parliament. Failure of passage of the GST could dampen the mood and could result in the markets going into a downward spiral to test the recent lows of 7,500 levels. We expect the markets to consolidate in a narrow sideways range due to the lack of any meaningful triggers in December.”
Further, according to Nikkei purchasing managers' index (PMI), manufacturing activities fell 25-month low in November due to slower increase in new work and output. PMI fell to 50.3 points in November, as against 50.7 in October. However, the official data released by the government showed a record growth in the manufacturing sector.
Meanwhile, S&P Small-cap index continued its rally and has edged higher for the eight straight trading sessions. The S&P BSE Small-cap index was up 0.4% at 11,681 points, as compared to 0.18% rise in the S&P BSE Sensex. It hit an intra-day high of 11,713, its highest level since August 19, 2015.
Munjal Auto Industries, Tree House Education & Accessories, Vimta Labs, Kanoria Chemicals, Ucal Fuel Systems, Saregama India, Avanti Feeds and Suzlon Energy were trading higher more than 5% each.
STOCKS IN FOCUS
Sectorally, the rate-sensitive sectors are trading mixed. BSE Bankex, Realty indices are up between 0.1-0.4% each while BSE Auto index is down by 0.2%
From the banking and financial space, SBI, HDFC twins, ICICI bank have gained between 0.1-0.6% each while Axis Bank has dropped 0.7%
The automobile companies will release their November sales figures from today, which has put the auto stocks under pressure. M&M, Hero Motocorp, Bajaj Auto, Maruti Suzuki have all skid between 0.1-0.5%
Among other notable gainers on the Sensex are Tata Steel, Vedanta, Dr Reddy’s, Wipro, Hindalco all up between 1.5-2.5% each
