At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 630.39 points or 2.01% at 31,957.61. The Nifty 50 index was up 191.75 points or 2.09% at 9,346.15.
In the broader market, the S&P BSE Mid-Cap index was up 1.3%. The S&P BSE Small-Cap index was up 1.15%. Both these indices underperformed the Sensex.
The market breadth was strong. On the BSE, 1282 shares rose and 723 shares fell. A total of 159 shares were unchanged. In Nifty 50 index, 48 stocks advanced and 2 stocks declined.
Buzzing Index:
The Nifty Financial Services index gained 2.74% to 9,689.85 after the Reserve Bank of India (RBI) announced Rs 50,000 crore special liquidity facility for mutual funds (SLF-MF) to deal with liquidity crisis.
Nippon Life Asset Management (up 12.07%), Manappuram Finance (up 7.84%), Mahindra & Mahindra Financial Services (up 6.19%), Cholamandalam Investment and Finance Company (up 5.46%), Bajaj Finance (up 5.13%), Bajaj Finserv (up 4.33%), HDFC AMC (up 4.32%), Muthoot Finance (up 3.16%), LIC Housing Finance (up 2.19%) and Shriram Transport Finance Company (up 0.99%), advanced.
RBI on Monday (27 April) decided to open a special liquidity facility for mutual funds (SLF-MF) of Rs 50,000 crore. RBI will conduct repo operations of 90 days tenor at the fixed repo rate. SLF-MF is on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday (excluding holidays). The scheme is available from 27 April to 11 May 2020 or up to utilization of the allocated amount, whichever is earlier. RBI will review the timeline and amount, depending upon market conditions.
Funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs by extending loans, and undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial papers (CPs), debentures and certificates of deposit (CDs) held by MFs.
Liquidity support availed under the SLF-MF would be eligible to be classified as held to maturity (HTM) even in excess of 25% of total investment permitted to be included in the HTM portfolio. Exposures under this facility will not be reckoned under the Large Exposure Framework (LEF). The face value of securities acquired under the SLF-MF and kept in the HTM category will not be reckoned for computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. Support extended to MFs under the SLF-MF shall be exempted from banks' capital market exposure limits.
Asset management companies faced fears of increased redemption pressure after Franklin Templeton Mutual Fund last week announced winding up six of its debt schemes amid sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy. The six yield-oriented schemes in which investments have been stopped from Thursday (23 April) include Franklin India Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund.
Stocks in Spotlight:
IRB Infrastructure Developers surged 2.4% to Rs 74.8 after the company said its board approved fund raising of up to Rs 2,500 crore. The fund raising is done to meet ongoing and planned capex requirements and cash flow mismatches of the company as well as for the general corporate purposes, in wake of COVID-19 arising from the lockdown impact.
NCL Industries was up 2.76% to Rs 67. The company's cement production fell 10% to 519,339 MT in Q4 March 2020 from 575,984 MT in Q4 March 2019. Cement dispatches declined 12% to 508,392 MT in Q4 March 2020 as compared to 579,295 MT in Q4 March 2019. Cement board production rose 5% to 18,765 MT, while cement board dispatches contracted 14% to 15,567 MT during the period under review.
BEML advanced 5.08% after the company bagged an order worth Rs 398 crore from Coal India. BEML said the order the scope of the order is supply of 7 units of 150-T Dumpers and 8 Nos of 190-T Dumpers under trial cum sale along with 8 years spare parts contract.
Global Markets:
Asian markets bounced as the Bank of Japan (BOJ) announced more stimulus steps to help cushion the economic impact of the coronavirus, while oil took another spill as the world ran short of space to store it all. BoJ matched market speculation by pledging to buy unlimited amounts of government bonds, removing its previous target of 80 trillion yen per year.
In US, stock indexes closed higher on Friday as investors digested economic data, mixed corporate results, and the latest economic aid package from Congress to combat the COVID-19 pandemic.
Investors were encouraged Friday by President Trump signing into law the much-awaited $484 billion coronavirus aid package that includes a second round of funding for small businesses under the Paycheck Protection Plan, or PPP. The measure contains another $320 billion to help small businesses. It also has about $75 billion for hospitals, $25 billion for coronavirus testing and $60 billion for the Small Business Administration's Economic Injury Disaster Loan program.
In economic data, a final reading on consumer sentiment from the University of Michigan for April came in at 71.8 from 89.1 in March.
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