Key benchmark indices logged strong gains, in tandem with world stocks, as concerns over trade tensions between between US and China ebbed. The barometer index, the S&P BSE Sensex, surged 577.73 points or 1.75% at 33,596.80, as per the provisional closing data. The Nifty 50 index jumped 196.75 points or 1.94% at 10,325.15, as per the provisional closing data. The Reserve Bank of India (RBI) maintained status quo in its first bi-monthly monetary policy meeting today, 5 April 2018.
On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6%. Consequently, the reverse repo rate under the LAF remains at 5.75%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25%. The decision of the MPC is consistent with the neutral stance of monetary policy 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 RBI said.
The RBI raised growth outlook as several factors are expected to accelerate the pace of economic activity in 2018-19. There are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production and still rising imports, albeit at a slower pace than in January. Global demand has been improving, which should encourage exports and boost fresh investment. On the whole, GDP growth is projected to strengthen from 6.6% in 2017-18 to 7.4% in 2018-19.
Domestic stocks saw a gap-up opening tracking firm Asian stocks. Key benchmark indices extended gains in morning trade. After holding firm till mid-afternoon trade, key benchmark indices extended gains in late trade after the RBI maintained status quo on interest rates.
The S&P BSE Mid-Cap index provisionally rose 1.88%. The S&P BSE Small-Cap index provisionally gained 1.87%. Both these indices outperformed the Sensex.
The broad market depicted strength. There were over three gainers against every loser on BSE. 2,073 shares rose and 629 shares fell. A total of 133 shares were unchanged.
Metal and mining stocks were in demand as concerns about a trade war between the world's two largest economies eased after the US and China signaled room for talks. China is the world's largest consumer of steel, copper and aluminum.
Vedanta (up 5.47%), JSW Steel (up 3.98%), Tata Steel (up 3.59%), Steel Authority of India (Sail) (up 3.73%), National Aluminium Company (up 3%), Hindustan Zinc (up 2.18%), Jindal Steel & Power (up 6.81%), Hindalco Industries (up 6.4%), NMDC (up 1.6%) and Hindustan Copper (up 3.4%) edged higher.
Copper edged higher in the global commodities market. High Grade Copper for March 2018 delivery was currently up 1.51% at $3.0560 per pound on the COMEX.
Axis Bank rose 2.65%. In clarification to reports titled "RBI drops Axis Bank from list of bullion importers," Axis Bank said that the Reserve Bank of India had informed the bank that its request for renewal of the authorization for import of gold for the financial year 2018-19 cannot be acceded. This does not have material impact on the bank. The announcement was made after market hours yesterday, 4 April 2018.
L&T advanced 2.37% after the company said that its construction arm L&T Construction has won orders worth Rs 3376 crore. The announcement was made during market hours today, 5 April 2018.
In a separate announcement made during trading hours today, 5 April 2018, L&T said that its wholly owned subsidiary, L&T Hydrocarbon Engineering (LTHE), announced an award for three gas production deck modules by Saudi Aramco. This is the fourth award for the consortium of LTHE with Subsea 7. There are three offshore contracts currently under execution by the Consortium for Saudi Aramco under the long term agreement.
India's services activity rebounded in March, driven by a marginal rise in new businesses, data released today, 5 April 2018 showed. The seasonally adjusted Nikkei India Services Business Activity Index rose to 50.3 in March from 47.8 in February. A reading above 50 indicates economic expansion, while a reading below 50 signals contraction.
Overseas, Asian and European stocks gained as investors bought back into risky assets as concerns over trade tensions between between US and China ebbed. Representatives from China and the US left the door open for a negotiated solution to avoid tariff proposals that wouldn't take effect for months. Markets in mainland China, Hong Kong and Taiwan were closed for holidays.
China's tariffs would place 25% duties on major US exports to China including airplanes, autos and soybeans, covering 106 categories of products and affecting $50 billion of goods. The announcement followed plans by the Trump administration to impose tariffs of 25% on Chinese products worth $50 billion, on top of levies introduced on steel and aluminum last month. Retaliatory Chinese levies on US pork and fruit came into effect early this week.
US stocks closed sharply higher yesterday, 4 April 2018 amid heavy intraday volatility as investors turned their focus to earnings and away from a trade conflict between the United States and China.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
