The key equity barometers continued to trade with strong gains in early afternoon trade. The Nifty traded below the 17,850 level. IT shares edged higher after declining in the past two sessions.
At 12:26 IST, the barometer index, the S&P BSE Sensex, was up 317.74 points or 0.53% to 60,603.78. The Nifty 50 index added 117.80 points or 0.66% to 17,839.30.
In the broader market, the S&P BSE Mid-Cap index rose 0.54% while the S&P BSE Small-Cap index gained 0.44%.
The market breadth was positive. On the BSE, 1,828 shares rose, and 1,520 shares fell. A total of 145 shares were unchanged.
RBI Monetary Policy Outcome:
The Reserve Bank of India (RBI) raised the key policy repo rate by 25 basis points and said it remained focused on the withdrawal of accomodation.
On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (8 February 2023) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50% with immediate effect.
Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.25% and the marginal standing facility (MSF) rate and the Bank Rate to 6.75%.
The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.
The outlook for inflation is mixed. Inflation is projected to be at 6.5% in 2022-23, with Q4 at 5.7%. On the assumption of a normal monsoon, CPI inflation is projected at 5.3% for 2023-24, with Q1 at 5%, Q2 at 5.4%, Q3 at 5.4% and Q4 at 5.6%, and risks evenly balanced.
Real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%, and risks broadly balanced.
"The global economic outlook does not look as grim now as it did a few months ago. Growth prospects in major economies have improved, while inflation is on a descent, though it still remains well above the target in major economies," RBI Governor Shaktikanta Das said in his statement.
"Inflation is expected to average 5.6% in Q4:2023-24," he added.
The next meeting of the MPC is scheduled during 3rd, 5th and 6th April 2023.
Derivatives:
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, fell 2.77% to 13.73. The Nifty 23 February 2023 futures were trading at 17,881, at a premium of 41.7 points as compared with the spot at 17,839.30.
The Nifty option chain for the 23 February 2023 expiry showed maximum Call OI of 32 lakh contracts at the 18,000 strike price. Maximum Put OI of 37.2 lakh contracts were seen at 17,500 strike price.
Buzzing Index:
The Nifty IT index rose 1.78% to 30,850.75. The index had declined 0.94% in the past two sessions.
LTI Mindtree (up 2.32%), Coforge (up 2.31%), L&T Technology Services (up 2.28%), Infosys (up 2.27%) and Mphasis (up 2.14%) were the top gainers.
Among the other gainers were HCL Technologies (up 1.37%), Tata Consultancy Ltd (up 1.36%), Wipro (up 1.12%), Tech Mahindra (up 1.08%) and Persistent Systems (up 0.77%).
Stocks in Spotlight:
Navin Fluorine International fell 2.76%. The company's consolidated net profit surged 54.9% to Rs 106.56 crore in Q3 FY23 as against Rs 68.79 crore posted in Q3 FY22. Revenue from operations jumped 48.7% year on year to Rs 563.58 crore in the quarter ended 31 December 2022.
The Phoenix Mills declined 3.32%. The company reported 78% jump in consolidated net profit to Rs 176.4 crore on a 66% increase in revenue from operations to Rs 683.8 crore in Q3 FY23 over Q3 FY22.
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