The domestic equity barometers came off the day's high in early afternoon trade. The Nifty traded below the 16,500 mark. Realty stocks witnessed some bit of bargain buying. The bourses witnessed bouts of volatility after the Reserve Bank of India (RBI) announced a hike in the key repo rate by 50 basis points to 4.90%.
At 12:21 IST, the barometer index, the S&P BSE Sensex, was up 217.46 points or 0.39% to 55,324.80. The Nifty 50 index added 67.80 points or 0.41% to 16,484.15.
In the broader market, the S&P BSE Mid-Cap index rose 0.47% while the S&P BSE Small-Cap index gained 0.36%.
Buyers outpaced sellers. On the BSE, 1,878 shares rose and 1,270 shares fell. A total of 135 shares were unchanged.
Derivatives:
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, fell 3.23% to 19.77. The Nifty 30 June 2022 futures were trading at 16,495.60 at a premium of 11.45 points as compared with the spot at 16,484.15.
The Nifty option chain for the 30 June 2022 expiry showed maximum Call OI of 24.1 lakh contracts at the 17,000 strike price. Maximum Put OI of 38.9 lakh contracts was seen at 16,000 strike price.
RBI Policy Action:
RBI's Monetary Policy Committee (MPC) met on 6th, 7th and 8th June 2022. Based on an assessment of the macroeconomic situation and the outlook, the MPC voted unanimously to increase the policy repo rate by 50 basis points to 4.90%, with immediate effect.
Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.65%; and the marginal standing facility (MSF) rate and the Bank Rate to 5.15%. The MPC also decided unanimously to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
With the assumption of a normal monsoon in 2022 and average crude oil price (Indian basket) of $105 per barrel, inflation is now projected at 6.7% in 2022-23, with Q1 at 7.5%; Q2 at 7.4%; Q3 at 6.2%; and Q4 at 5.8%, with risks evenly balanced.
Around 75% of the increase in inflation projections can be attributed to the food group. Further, the baseline inflation projection of 6.7% for 2022-23 does not take into account the impact of monetary policy actions taken today.
Buzzing Index:
The Nifty Realty index rose 2.21% to 405.50. The index fell 3.42% in the past three sessions.
Among the index constituents, Macrotech Developers (up 5.27%), DLF (up 3.17%), Sobha (up 2.56%), Oberoi Realty (up 2.4%) and Godrej Properties (up 2.1%) advanced.
Further, Brigade Enterprises (up 1.84%), Indiabulls Real Estate (up 1.46%) and Phoenix Mills (up 1.21%) edged higher.
Stocks in Spotlight:
Ramkrishna Forgings rose 0.12%. The company has received an export order worth Rs 115 crore over the period of 4 years from a European Tier 1 supplier for a new differential housing case business.
Hindustan Copper advanced 0.43%. The company said that the Surda mine located at Ghatshila, Jharkhand, has resumed its mine operations from 7 June 2022. The operations have been resumed post renewal of lease by the Government of Jharkhand and after obtaining the required environment clearance (EC) from the Ministry of Environment, Forest and Climate Change, Government of India.
ITD Cementation India zoomed 8.24%. The civil construction company has received a letter of intent (LoI) cum notice to proceed for the execution of civil and associated works on EPC basis to construct a six-lane greenfield expressway in Uttar Pradesh valued at Rs 4,850 crore.
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