Sensex sinks 294 pts as RBI keeps repo rate unchanged, Nifty nears 18,600

CLOSING BELL, JUNE 8, 2023: Sun Pharma, Kotak Bank, Tech M, M&M, Axis Bank, HUL, Tata Motors, TCS, Nestle India, and Bajaj twins dropped between 1 per cent and 3 per cent

1:47 PM

Expert on RBI Policy: Rates may be reduced after Diwali

>> RBI maintains its realistic approach of balancing growth and inflation dynamics and decoupling from the global economy. Moreover, inflation over the past two months CPI is below the RBI's tolerance level, which encourages the RBI to keep the repo rate and the exchange rate unchanged.

 

>> The sharp change in the spread between WPI and CPI from positive 880 basis points in May 22 to negative 560 basis points in April 23 will benefit the gross margins of the consumer-related sectors.

 

>> Although, as expected, the interest rate decision and the MPC rate represent a pause and a withdrawal of accommodation, respectively, the Governor's comment can be interpreted as positive. The central bank's projection for inflation in FY24 CPI is 5.1%, lower than the 5.2% forecast at the last meeting.

 

>> This suggests that the MPC has reached the end of the rate hike cycle. If the monsoon turns out to be normal and the global scenario is favourable, the MPC could consider a rate cut in late CY2023 or early 2024.

 

>> From an equity market perspective, this is positive. The Governor's comment that "India's economic and financial sectors remain resilient amid global turmoil" reflects India's strong and improving fundamentals.

 

Views expressed by Sooraj Singh Gurjar Founder and MD, Get Together Finance (GTF)

1:39 PM

Aether Industries soars 10% on inking pact with US-based Oil Field Services firm

The company executed Letter of Intent (LoI) with USA based leading global Oil Field Services Company for strategic supplier and contract manufacturing partnership. READ MORE

1:27 PM

Expert on RBI Policy: Rates may be reduced after Diwali

>> As we can see, the RBI maintains its current stance, despite Canada raising interest rates yesterday. This will encourage additional investment in banking stocks. Inflation TGT is still higher than projected owing to the El Nino impact, but we believe that after Diwali policy interest rates will be reduced, and the market will go in a favourable path from here.

 

Views expressed by Ravi Singhal, CEO, GCL Broking

 

1:20 PM

Asian Market Update:: Nikkei, Taiwan slip up to 1%; Shanghai bucks trend

Source: Yahoo Finance

1:12 PM

Expert on RBI Policy: Any rate cut hopes in 2023 built by markets will be pushed forward

>> A status quo policy delivered by the central bank today, keeping both the policy rate and stance unchanged. The RBI continued to be rather upbeat on growth, revising up its Q1 growth forecast to 8%, while retaining its annual forecast at 6.5% -- which is higher than our estimate of 6-6.2%. On inflation, the central bank recognised the near-term easing in inflationary pressures while being cautious about the future trajectory.

 

>> The central bank lowered its inflation forecast only marginally to 5.1% and seems to be building in a buffer for any food prices spikes due to weather related disturbances during the monsoon season. If indeed these risks do not pan out, inflation could be lower than the RBI’s projections leading to subsequent communications becoming more dovish.

 

>> Today’s policy decision does little to move the needle in the bond market as it was broadly in line with expectations. Any rate cut expectations in 2023 that was being built up in the market are likely to be pushed forward for now.

Views expressed by Abheek Barua, Chief Economist, HDFC Bank

 

 

1:02 PM

Expert on RBI Policy: Sustained moderation in inflation may prompt shift from hawkish to neutral stance

>> The RBI MPC left the repo rates unchanged at its meet on June 8 in line with street expectations. MPC members were in a sweet spot in the backdrop of higher than expected GDP numbers and moderating headline and core inflation print.

 

>> The MPC continued with the ‘withdrawal of accommodation’ stance (with 5:1 majority), as liquidity has turned into significant surplus mode further increased by the impact of withdrawal of Rs 2,000 notes. A sustained moderation in inflation going forward may prompt the shift from “withdrawal of accommodation” to “neutral” stance.

 

>> India’s economic activity has continued to demonstrate resilience. RBI retained its GDP forecast at 6.5% in FY24.

 

>> Given the uncertainties around the impact of El-Nino conditions leading to sub-par monsoon in 2023, RBI remained cautious and revised the inflation projection by only 10bps to 5.1% for FY24. RBI Governor stressed on moving towards the primary target of 4% inflation. In this backdrop, expectation of rate cut in this calendar year seems to be faded. We expect the first rate cut perhaps in Feb 2024.

Views expressed by Dhiraj Relli, MD & CEO, HDFC Securities

12:50 PM

Expert on RBI Policy: MPC outcome turned out to be non-event, retain positive bias on markets

>> The MPC has retained the status quo on policy rates and the monetary stance of “withdrawal of accommodation” also remains unchanged which is in line with expectations. Certain sections of the market participants looking for dovish comments were disappointed with RBI maintaing a hawkish undertone. And rightly so, the Q4 GDP growth surprised on the upside, the inflation remains over 4% level and the possibility of weak monsoons could provide upward pressure on inflation.

>> Additionally, the global scenario also remains challenging and uncertain. So essentially the policy meet has turned out to be a non-event though the consensus expectations of rate cut timelines seem to have extended now. We retain our positive bias on the equity markets in the medium term.

 

>> In terms of sectors, we continue to focus on banks & financials, engineering, infra, building material and select consumer companies to play the multi-year economic upcycle in India. In the near term, we believe that the liquidity conditions could remain comfortable with flow of money into banks due to phasing out of Rs 2,000 notes. Also, this could boost consumption in short term in the run up to festive season in August and September.

Views expressed by Gaurav Dua, Head Capital Market Strategy, Sharekhan by BNP Paribas

12:41 PM

RBI Presser LIVE: Recent MSP hikes to impact inflation by 10-12 bps, says deputy Guv Patra

>> This impact will be over and above our projections. 
>> This was already built in our projection. 

12:33 PM

RBI Presser LIVE: We want to ensure CPI aligns with 4% target on a durable basis

>> Our efforst is to ensure that CPI headline inflation aligns with our target on a durable basis
>> Primary target of MPC is 4%. 
>> We earlier operated withint the tolerance band at times of Covid.
>> Now, there is greater certainty that overall path looks much clearer, so we are now targrting 4%. 

12:28 PM

RBI Presser LIVE: Our policy primarily dictated by domestic factors, not global central banks action, says Das

12:24 PM

RBI Presser LIVE: Guv Das reiterates that this rate pause is not a pivot

12:19 PM

RBI Presser LIVE: CBDC should have 1 mn customers by June end, says deputy Guv

12:12 PM

RBI Presser LIVE: About 85% of Rs 1.8 trillion 2,000 rupees notes deposited in bank accounts, says Guv Das

12:11 PM

RBI Presser LIVE: So far about Rs 1.8 lakh crore of Rs 2000 notes are back in system

>> These are 50% of the notes that were in circulation till March, says Das.

12:06 PM

RBI Presser LIVE: Future rate action to depend on evolving data, says Das

>> Rate action this time is a pause but future action to depend on evolving data.
>> MPC remains focussed on 4% inflation target
>> Indian economy resilient
>> Prospects of growth becoming broad based
>> External sector viable as reflected in CAD, forex reserves, stable rupee
>> RBI liquidty action to be nimble and 2 sided.